Financing the transformation: a proposal for a credit scheme to finance the Paris Agreement

To achieve the goals of Paris Agreement, massive investments in real economy are needed. We propose providing long-term interest subsidized loans to companies investing sustainable projects with primary goal greenhouse gas neutrality. In detail, we linking loan rates EU Taxonomy and future CO2 prices. These links incentivize decarbonize. Furthermore, this link can hedge against volatile prices incentivizes make their business models more sustainable. Both elements support transformation process economy.Key policy insights By an rate discount investment’s alignment Taxonomy, incentivized invest climate-friendly even at low prices.By coupling prices, act as a hedge, which helps emission reducing activities when they need it most.Additionally, these set incentives for disclose signal exposure price risk, while helping governments commit goals.