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I think this argument, I like to label the church argument, is at the heart of the problem: "in 50 years there will be hell. therefore everything can be justified in the name of zeitgeist"...Now, there is no disagreement at all, that climate change is "real" and "disastrous"..1/n https://twitter.com/schieritz/status/1313029704363003904">https://twitter.com/schieritz...
But it is intellectually a bit questionable to conclude that we can therefore allow the ECB to act on that. There are two parts to it: first, ECB is not accountable for their policies (as part of the German mistake to make them maximally independent). That is, to control 2/n
means fundamentally that voters can decide whether a price distortions between green and non-green bonds are an efficient tool to fight climate change. It also means I can vote down, at least indirectly, Mdm. Lagarde. ECB independence can only be changed with a new contract...3/n
on a European level making it practically impossible to vote them down. Accountability of bureaucratcs and the prevention of power is at the heart of any democratic process. The costs-benefits @schieirtz mentions has therefore only cost, no benefits 4/n
Why are there no benefits? Because on a second level, substantially less important, there is overwhelming scientific evidence on the right tools to fight climate change. If we agree on "scientific consensus" then we should aslo agree on scientific consensus what the dominant 5/n
tools are. Here are 3500 economists, 27 nobel laureates, 4 former chairs of the central bank, pointing to the main tool. https://clcouncil.org/economists-statement/">https://clcouncil.org/economist... There are of course many further policies that can support the goal. However ECB policies in pricedistorting bonds is typically not 6/n
one of them. Even if it were, there is a perfect substitute at least in the longer run. Every finance minister can subsidize or tax green bonds. A finance minister can be voted down in a democratic process. The ECB has no superiority in tools, maybe a coordination device and 7/n
balance sheet size, but that does not justify giving up democratic accountability. The @schieritz argument is common, thought through it is a justification for everything, I fundamentally agree on the goal to fight climate change, I disagree on the path and tools to achieve it /n
