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UK Policy Briefing

Macrofinancial policies for a green and caring economy

Feminist Green New Deal Policy Paper

Dr Maria Nikolaidi

UK Feminist Green New Deal Policy Papers

Macrofinancial policies for a green and caring economy

by Dr Maria Nikolaidi for the Women’s Budget Group

The transition to a green and caring economy necessitates fundamental changes to how our economies and societies are organised, produced and reproduced. A key component of these changes is the redesign of macroeconomic and financial policies. These policies determine how the public sector invests in physical and social infrastructure, how governments use taxes and subsidies to support or prevent specific types of economic activities, as well as how the financial system provides credit to the real economy. Macrofinancial policies have, therefore, significant implications for gender equality, our well-being and the environmental effects of our economies.

This report sets out our vision for transforming UK macrofinancial policies in line with the transition to a green and caring economy. The main messages and recommendations of the report are as follows:

  • Public investment and public sector jobs that support decarbonisation and care should be put at the core of the UK fiscal strategy, with targeted subsidies and taxation playing a supportive role in reducing the environmental footprint of the activities and investments of the private sector. Fiscal policies need to be conducive to the transformation of polluting activities (for example, through re-tooling and a reduction of their carbon intensity), the contraction of sectors that are inconsistent with the Paris Agreement targets (such as fossil fuels) and the expansion of sectors with a low environmental footprint that are conducive to a better quality of life (such as care).
  • Low-carbon transport, green social housing, caring activities and the creation of parks and green spaces should be the focus of a public investment strategy that will target both the decarbonisation of our physical infrastructure and the expansion of social infrastructure. The design of public investment projects, such as the construction of social housing units and the development of urban transport systems, should take explicitly into account everyday practice and facilitate caring responsibilities. But they should also be combined with interventions and regulatory initiatives that transform our consumption norms.
  • No one should be left behind because of the decarbonisation of our economies. Some workers might become unemployed due to the decline in high-carbon activities. To achieve a just transition for these workers, appropriate reskilling and upskilling are essential.
  • The funding and financing of public investment and public sector jobs can rely on a combination of tools: (i) progressive taxation, wealth-related taxes and energy windfall taxes, (ii) the purchase of government bonds by the Bank of England within a new fiscal-monetary policy coordination institutional framework, and (iii) the issuance of government bonds linked specifically to the green and caring economy. A potential increase in public debt should not be viewed as a barrier, in contrast to what has been argued in standard austerity narratives.
  • Public banking should be expanded and play a central core in the financing of green and caring activities.
  • The decarbonisation of the UK private financial system should include both the operations of the Bank of England and financial regulation and should rely on a ‘carrot and stick’ approach that encourages the financing of green activities and discourages the financing of dirty activities.

    The current financial system suffers from a gender bias and does not support activities that are essential for developing a caring economy. A diversity-based transformation of the UK financial system is, therefore, essential. Gender and diversity criteria should be introduced in the lending practices and operations of public banks, private banks and the Bank of England.

Read the full policy paper here.

About the Feminist Green New Deal project

The Feminist Green New Deal is bringing a gendered and intersectional approach/perspective to the Green economy/Green Recovery – ensuring that the voices of women, people of colour and other marginalised groups are heard during environmental and political debates.

Through a programme of nationwide grassroots workshops and policy roundtables a Feminist Green New Deal Manifesto will be created and launched at COP26 Glasgow Climate Talks.

This Project is a collaboration between Wen (Women’s Environmental Network) and the Women’s Budget Group (WBG).

Learn more about the project here.

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