A monetary plan for upgrading climate finance and support the low-carbon transition
Résumé
This article examines how carbon finance can be part of a general reform of the financial system. Climate policies can indeed stimulate a sustainable and inclusive climate finance, in line with the call of the Cancun Agreement for a paradigm shift in climate negotiations. The mechanism described in this article is based on the adoption by Parties to the negotiations of a social value of carbon to trigger a wave of low-carbon investments in the world. Central banks offer credit lines for commercial banks backed by this social value of carbon, which are then used to cut the risk to invest in low- carbon investments. A future agreement in Paris next year should support this type of mechanisms.