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.
Kalinowski et al. (Mon,) studied this question.