The goal of Financial Repression is to effectively reduce the financial burden of debt expanding faster than economic growth. Green Financial Repression takes a fundamentally different approach. Instead of trying to solve the problem through Monetary Policy and restrictive Fiscal Policy (including Taxation with their individual consequences) it uses the governments regulatory powers.
WHAT IS GOING ON HERE
Governments regulatory powers have always included broad ranges of Fees, Licenses, Toils and Assessments. The new approach uses Time & Level Assessments.
By setting Carbon Emission Levels and Time frames it forces compliance which can only be achieved through forced investment or in some cases de-investment. Additionally, it is using the policies of ESG in gaining investor approval to incentivize Voluntary Compliance and participation.
WHAT THIS GREEN EXPANDED FINANCIAL REPRESSION DELIVERS
Investment is expected to not only come in the form of Capital Investment but also to foster growth in the capital markets for tradable permits, rights and certificates for carbon emissions. Carbon Credits and Carbon Offsets therefore create taxable profits, but most importantly the massive Investments required is projected to materially expand Global GDP.
The Global GDP is presently ~ $84T/year. $150T over 30 Years is $5T. That is an annual increase of 6% which is dramatic when the global economic growth approximates 3% or less.
However, it is expected to be much larger than that because the $5T/year is only the planned amount of investment capital being raised. Additionally, it is expected to result in dramatically increasing competitive & regulatory driven Carbon pricing which will outstrip overall Inflation.
Remember, it is centrally Inflation and economic growth that Financial Repression is targeted at. What we have here is more appropriately termed “Regulatory Repression”. Instead of penalizing Savers with reduced purchasing power it penalizes Carbon Emitters & Users achieving the same end.
… at least that appears to be their plan?