Two degrees versus two percent How central bankers and members of the European Parliament developed a common pro-climate narrative

Abstract

The new ECB leadership made it its explicit priority to make ECB’s policies greener. Although doubt remains about the scale and effectiveness of the policies implemented since then, the idea that the ECB has a role to play in the fight against climate change has become widely accepted. The main narrative in support of this idea states that the ECB’s pro-climate engagement is part of its primary mandate–price stability. However, until not long ago, ECB’s primary mandate was rather used by those opposing the greening of central banking, while it was largely ignored by pro-climate advocates. How has this narrative emerged and gained traction? This paper argues that this narrative results from a process of coalition-building between pro-climate central bankers and pro-climate politicians in the European Parliament. Building on a multi-method text analysis of original datasets of accountability communications as well as in-depth interviews, this paper documents the mechanisms through which pro-climate central bankers and pro-climate MEPs co-constructed the pro-climate narrative, using accountability relationships as a coalition-building arena. The paper contributes to ongoing discussions on central banks’ accountability, politicisation and role in the green transition.