Climate acts vs central bank acts – the power of arm’s length distance

Climate policies are becoming increasingly politicized, and decisions often do not survive changes in governments 1 . This undermines the achievement of international agreements on climate change, because effective climate governance requires stability and predictability for businesses and other actors. Surveys show that a majority of the global population demands intensified political action on climate—and underestimate the willingness of their fellow citizens to act on climate change 2 . Even though support tends to drop with increasing costs 3 , this calls for a mechanism for overseeing that long-term climate policies are trustworthy and can be trusted to be honored by new governments. Such a stable arm’s length distance institutional structure has existed in most Western countries for many years, but in a different domain: monetary policy. Following Helm et al. 4 , we suggest that climate policy could benefit substantially from similar institutional structures. In this Commentary, we explore similarities and differences between monetary and climate management and suggest institutional options for reaching emission targets more efficiently. We argue that there are climate policy lessons to be learned from the central bank principle of arm’s length distance between policy management and politics. We focus on Sweden as a case study, but the arguments should be relevant for many other countries as well.