Climate & Debates

Green Credit: A Catalyst for Industrial Transition?

Published on 17 November 2023

By Axel Blanadet

JEL codes: L59;L15;Q51

Climate change is a pressing global challenge that demands urgent action to decarbonize the economy and in particular high-polluting and energy-intensive industries. This literature review aims to assess the role of green credit policies as a tool for such a transition. Green credit policies are designed to restrict the development of high-pollution and energy-intensive industries while simultaneously supporting the financing needs of low-carbon firms. These policies can manifest as financial penalties, restricted access to bank credit, exclusion from incentives… However, their negative impact on energy-intensive industries’ innovation raises concerns as it could hamper their ability to upgrade their processes, hindering the possibility of a more energy-efficient heavy industry.

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