G21-P005 Use Public and Central Banking to Address Public Emergencies and Build a Green Economy

Submitter Name

Guy Dauncey

Ratification Vote Results: Adopted

Proposal

The Green Party acknowledges the money-creating powers of public banking and central banking, to the benefit of all Canadians. A Green government will use these powers to help it tackle emergencies such as the affordable housing crisis, the climate emergency, and current and future pandemics.

Objective

The Green Party acknowledges the money-creating powers of public banking and central banking, to the benefit of all Canadians, and that a future Green government should use these powers.

Benefit

Zero interest public bank money can be used to finance home retrofits, solar and wind installations, affordable housing, and similar initiatives. Central bank money can be used in an emergency without risk of inflation to buy climate bonds, biodiversity bonds or affordable housing bonds off the government, giving the government the resources needed to tackle these emergencies.

Supporting Comments from Submitter

All banks create money by creating debt, limited by reserve requirements. Public banks create money for social purposes, as guided by their governments, charging low or zero interest.

In Germany, Sweden, Denmark, Italy, Spain and France, community and state-owned banks serve 64% of the banking market. Germany’s public Sparkassen banks have a return on capital that is several times greater than Germany’s private bank sector. As well as serving Germany’s small and medium-sized businesses, they provided 72% of the financing for Germany’s solar and wind installations.

In Germany, the publicly-owned Kreditanstalt fur Wiederaufbau (KfW) has been the main source of financing for building retrofits to tackle the climate crisis. Between 2006 and 2009, it issued 27 billion Euros in loans and grants, triggered 54 billion Euros in further investment and rehabilitated 9 million housing units to a high energy standard, saving a billion Euros a year in heating costs and generating 894,000 jobs that lasted for at least a year. In 2016, it provided €3.5 billion in below market rate loans for energy efficiency in small and medium-sized manufacturers.

https://www.kfw.de/PDF/Download-Center/Konzernthemen/KfW-im-Überblick/KfW-an-overview.pdf

In Bangladesh, the publicly-owned Infrastructure Development Company has provided the capital needed to install more than three million solar panels in rural areas.

Central banks created money to tackle the 2008 financial crisis, but in ways that caused inflation in stock markets and the housing market, rather than in socially-oriented ways to tackle the climate and affordable housing crises directly. They are creating money now to help tackle the Covid-19 crisis. Central banks can create money as zero-interest non-repayable loans, which can be used to tackle national emergencies, such as the climate, biodiversity, affordable housing and Covid-19 crises.

Green Value(s)

Ecological Wisdom, Sustainability, Participatory Democracy, Social Justice, Respect for Diversity.

Relation to Existing Policy

Add to current GPC policy.