Rising interest rates are hitting sustainable investments relatively hard. This threatens to slow down the energy transition. Meanwhile, the current high inflation is precisely caused by rising fossil energy prices. In this policy paper, Rens van Tilburg discusses what the ECB can do to counteract the unintended negative effect of current monetary policy on the energy transition. This is not only beneficial for the climate, but also for price stability, making the European economy less dependent on volatile fossil energy prices.

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