Imagine, successfully side-stepping an oncoming car only to be hit by a massive lorry. That is what will happen if policymakers try to recover our economy from the coronavirus pandemic without simultaneously tackling environmental breakdown. We simply cannot afford to address one crisis whilst ignoring – if not worsening – the other. This is why it is fundamental that the Bank of England’s (BoE) policies are aligned with the government’s environmental goals, not to mention consistent with its own policy rhetoric. Indeed, in response to a letter co-authored by NEF in February, BoE governor, Andrew Bailey suggested that aligning the Bank’s monetary policy portfolio with environmental goals is a ‘perfectly sensible thing to do’ and ‘will be made a priority’. All well and good, but new research published today by the New Economic Foundation in collaboration with University of Greenwich, SOAS and University of West England, shows that there is a considerable carbon bias in one the BoE’s main monetary policy operations – its £20bn corporate bond purchase scheme (CBPS), otherwise known as corporate QE.
New Economics Foundation 4th Aug 2020 read more »