Green Monetary Policy and the creation of new money for the green transition

In this article, we propose Green Monetary Policy (GMP) to systemically finance the green transition, moving beyond traditional redistributive mechanisms. We introduce two new tools: Green Quantitative Easing (GQE) and Green Digital Currencies (GDCs). These enable central banks to create new money explicitly for sustainable investments. By embedding sustainability into monetary creation, GMP reduces political resistance, minimizes regulatory complexity, and offers a proactive, inclusive framework for climate governance.