Evaluating the design choices

The current high interest rates slow down the energy transition, making the Eurozone more vulnerable to fossilflation. With a green interest rate programme, the ECB can offset this effect. In this paper we analyse the most relevant design choices for such a green interest rate programme, like how to define ‘green’ and the structure and size of such a programme. Using data from the 2023 Taxonomy-alignment reports of banks we find that a green rate can accelerate the energy transition throughout the Eurozone against modest costs. 

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