Addressing current inflation levels through green energy technologies and techniques: recent developments

Ojo, Marianne (2024): Addressing current inflation levels through green energy technologies and techniques: recent developments. Forthcoming in: American Research Journals , Vol. 5, No. ARJHSS24005 (2024)

Abstract

The US Inflation Reduction Act 2022, was signed into law in August 2022. It aims amongst other objectives, “to lower energy costs for families and small businesses, accelerate private investment in clean energy solutions in every sector of the economy – as well as nationally, strengthen supply chains, and create good paying jobs and new economic opportunities for workers.”

According to the section, “Investing in Clean Hydrogen”, as provided for in the Inflation Reduction Act Guidebook (2023: see page 74 of 184), “Clean hydrogen constitutes a major component of President Biden’s plan to decarbonize the industrial sector. As well as providing $9.5 billion for clean hydrogen initiatives, through the Bipartisan Infrastructure Law, $1 billion was also set aside for a “Clean Hydrogen Electrolysis program”, to reduce the cost of hydrogen produced from clean electricity.” Further, $500 million was committed towards “Clean Hydrogen Manufacturing and Recycling/Initiatives” aimed at supporting equipment manufacturing and strong domestic supply chains for clean hydrogen.

Having experienced inflationary levels at unprecedented record highs – globally, in recent months, the possible impacts of recent accommodative monetary policies will be considered in this paper. The paper will aim to highlight why addressing current inflation levels – and particularly through green energy techniques and technologies – which incorporate and embrace the use of green hydrogen, constitute a much welcomed approach in addressing current inflationary levels.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inflation Reduction Act 2022; Green hydrogen; Green energy, green steel ; technologies; techniques; electrolysis
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F47 - Forecasting and Simulation: Models and Applications; F - International Economics > F6 - Economic Impacts of Globalization; F - International Economics > F6 - Economic Impacts of Globalization > F64 - Environment; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents; P - Economic Systems > P5 - Comparative Economic Systems

References

Agénor, P-R, E Kharroubi, L Gambacorta, G Lombardo and L A Pereira da Silva (2017): “The international dimensions of macroprudential policies”, BIS Working Papers, no 643, June.

Amiti, M and D Weinstein (2011): “Exports and financial shocks”, The Quarterly Journal of Economics, vol 126, no 4, pp 1841–77.

Armantier, O., Kosar, G., Pomerantz,R., Skandalis, D., Smith, K., Topa, G., & Van der Klaauw, W. (2021). How economic crises affect inflation beliefs: Evidence from the Covid-19 pandemic. Journal of Economic Behavior & Organization, 189, 443-469.-Victor, V., Karakunnel, J. J., Loganathan, S., & Meyer, D. F. (2021).

Avdjiev, S, L Gambacorta, L Goldberg and S Schiaffi (2017a). “The Shifting Drivers of Global Liquidity“, BIS Working Papers, no 644, June.

Avdjiev, S, R McCauley and P McGuire (2012). “Rapid Credit Growth and International Credit: Challenges for Asia”, BIS Working Papers, no 377, April. Bank for International Settlements (2019). G7 Working Group on Stable Coins, Committee on Payments and Markets Infrastructures "Investigating the Impact of Global Stable Coins October 2019 BIS (2019).

Bank of England, (2021). “Inflation Now and Then”, Remarks given by Jonathan Haskel, External Member of the Monetary Policy Committee, Bank of England, and Imperial College Business School, Imperial College, London Adam Smith Business School, University of Glasgow 23 November 2021

Borio, C., Drehmann, M., and Xia, D, “Predicting Recessions: Financial Cycle versus term spread” BIS Working Papers No 818 October 2019

Boivin, Jean, Michael T. Kiley, and Frederic S. Mishkin (2010). "How Has the Monetary Transmission Mechanism Evolved over Time?" in Benjamin M. Friedman and Michael Woodford, eds., Handbook of Monetary Economics, vol. 3. Amsterdam: Elsevier, pp. 369–422

Bullard, James (2018). "The Case of the Disappearing Phillips Curve," Speech delivered at the 2018 ECB Forum on Central Banking, Sintra, Portugal, June 19

Beau, D. (2019)."The Role of Cryptoassets in the Payment System " First deputy governor of the Bank of France at the Official Monetary and Financial Institutions Forum (OMFIF) Meeting, London, 15 October 2019

Bloomberg (2019). “Britain's Inverted Yield Curve Is Nothing Like America's” 15 August 2019 https://www.bloomberg.com/opinion/articles/2019-08-16/britain-s-yield-curve-is-nothing-likeamerica-s?srnd=premium-europe

Bloomberg (2019). “U.K.’s Johnson to Double Down on Brexit in Germany, France Trip” https://www.bloomberg.com/news/articles/2019-08-17/u-k-s-johnson-to-double-down-on-brexitin-germany-france-trip?srnd=premium-europe

Brainard, L.(2019) ."Digital Currencies, Stable Coins, and the Evolving Payments Landscape " Remarks at the Future of Money in the Digital Age, Sponsored by the Peterson Institute for International Economics and Princeton University's Bendheim Center for Finance,Washington D.C October 16 2019

CGFS-FSB, (2017). “FinTech credit: Market structure, business models and financial stability implications”, May 2017. Committee on the Global Financial System, “Unconventional Monetary Policy Tools: A Cross Country Analysis” CGFS Papers No 63 October 2019, Bank for International Settlements

Centre for Economic Policy Research (2022). “Rising Inflation is Worrisome: But Not for the Reasons You Think” D’Acunto, F. and Weber, M., January 4 2022

Coroneo, L. and S Pastorello (2017). “European Spreads at the Interest Rate Lower Bound” unpublished manuscript CPMI, (2017). “Distributed ledger technology in payment, clearing and settlement – an analytical framework”, February 2017.

Federal Reserve (2024). “Federal Reserve Board and Federal Open Market Committee Release Economic Projections from the March 19-20 FOMC Meeting” Accessed via https://www.federalreserve.gov/newsevents/pressreleases/monetary20240320b.htm

Federal Reserve (2024). “Federal Reserve Issues FOMC Statement”

Federal Reserve Bank of San Francisco, (2022). “This Time is Different Because We Are” Remarks by Mary C Daly, President of the Federal Reserve Bank of San Francisco, Los Angeles, CA, February 23, 2022

Fendel, R., N Mai, and O Mohr (2018). “Recession probabilities for the Eurozone at the Zero Lower Bound”, WHU Working Paper Series in Economics, no 18/04

Financial Stability Board (2019). "FSB Sets Out Work to Consider Regulatory Issues of Stable Coins" 18th October 2019 https://www.FSB.org/2019/ 10/fsb-sets-out-work-to-considerregulatory-issues-of-stable-coins/

Financial Stability Board (2018). “ Crypto Asset Markets: Potential Channels for Future Stability Implications, October 2018

Financial Times (2024). “U.K. Inflation Hits Lowest Rate Since 2021 at 3.4%” 20th April 2024. Accessed at https://www.ft.com/content/9f31261e-7d10-4963-b652-9b96822822bd

Financial Times (2023). “Breaking Stormont Impasse Requires Action by London, DUP warns” April 18th 2023

Financial Times (2023). “EU Will Miss its Green Hydrogen Targets, Executives Say” May 11 2023

Financial Times (2023). “ Steelmakers Explore Hydrogen to Power Energy Hungry Processes” July 15 2022

Financial Times (2023). “US and EU Launch New talks on Critical Minerals Trade in Green Tech Race” March 11 2023

Financial Times (2022). “Green Hydrogen Will be Price Competitive by 2030” July 15 2022

Forbes, K, D Reinhardt and T Wieladek (2016): “The spillovers, interactions, and (un)intended consequences of monetary and regulatory policies”, Journal of Monetary Economics, vol 85, pp 1–22.

Goodfriend M and M King (2015).“The Evolution of Monetary Policy: “Review of the Riksbank’s Monetary Policy 2010-2015” at page 21 ISSN 1653-0942 978-91-87541-39-1 Riksdagstryckeriet, Stockholm, 2015

Hofmann, B, I Shim and H S Shin (2016): “Sovereign yields and the risk-taking channel of currency appreciation”, BIS Working Papers, no 538, revised May 2017.

Korstanje, M. E., & George, B. (2021). “From a recession to the COVID-19 pandemic: Inflation–Unemployment Comparison between the UK and India”. Economies, 9(2), 73. Mobility and globalization in the aftermath of COVID-19: Emerging new geographies in a locked world. Basingstoke: Palgrave Macmillan.

Markets Committee, MC Compendium “Monetary Policy Frameworks and Central Bank Market Operations” October 2019, Bank for International Settlements

Markets Committee, “Large Central Bank Balance Sheets and Market Functioning” Report Prepared by Study Group Chaired by Lorie Logan (Fed Reserve Bank of New York) and Ulrich Bindsell (ECB), October 2019, Bank for International Settlements Publications

New York Times (2019). Economic Trouble Signs Hang Over Trump’s Trade War August 15 https://www.nytimes.com/2019/08/13/business/economy/donald-trump-jobsc

Quarles, R. K. (2019). ” The Financial Stability Board at 10 years : Looking Back and Looking Ahead”, Building a Positive Future for Europe, Vice Chair of the Board of Governors of the Federal Reserve System, 3 October 2019, Brussels

Rehn, O. (2019). "On Conventional and Unconventional Monetary Policies" http://www.bis.org/review/ r191011b.htm

Shin, S. H ( 2015). “Exchange rates and the transmission of global liquidity”, speech at the Bank of Korea– IMF conference on Leverage in Asia: lessons from the past, what’s new now, and where to watch out for, Seoul, 11 December 9999

Soederberg (2019). "The e krone now and in the future " Economic Commentaries No 8 Sveriges Riksbank

Svensson, Lars E.O. (2017). "Cost-benefit analysis of leaning against the wind " Journal of Monetary Economics 90, pp 193-213

Sveriges Riksbank (2017). "The Riksbank's e-krona project", Report 1 Sept 2017

Sveriges Riksbank (2018a). "Account of Monetary Policy 2018", Sveriges Riksbank Sveriges Riksbank (2018b), The Riksbank's e-krona project ", Report 2, Oct 2018 Sveriges Riksdag (2018). "Evaluation of monetary policy for the period 2016-22018, Committee on Finance Report 2018/ 19: FiU24

Randal K Quarles, (2019). ” The Financial Stability Board at 10 years : Looking Back and Looking Ahead”, Building a Positive Future for Europe, Vice Chair of the Board of Governors of the Federal Reserve System, 3 October 2019, Brussels

Rachel, Lukasz, and Thomas D. Smith (2017)."Are Low Real Interest Rates Here to Stay?" (PDF) International Journal of Central Banking, vol. 13 (September), pp. 1–42 RUSI (2019). “Data Analytics and Algorithmic Bias in Policing” The Royal United Services Institute (RUSI) Report 16 September 2019

Restoy, F.(2019). “What is Going On, and Where Are the Challenges?” Chairman, Financial Stability Institute, Bank for International Settlements, Washington DC, 16 October 2019

Rosengren, Eric S. (2015). "Changing Economic Relationships: Implications for monetary policy and simple monetary policy rules " Speech on 16 April, Federal Reserve Bank of Boston WSJ, (2019). “ECB Follows Fed in Signaling Fresh Stimulus” https://www.wsj.com/articles/ecb-officials-signal-intention-to-launch-fresh-stimulus11562847288?mod=itp_wsj&mod=&mod=djemITP_h www.wsj.com/articles/ecb-to-launch-new-stimulus-measures-11551963228?mod=article_inline

The Economist (2019). “Masters of the Universe: The Rise of Financial Machines” https://www.economist.com/leaders/2019/10/03/the-rise-of-the-financial-machines

WSJ, (2019). “ECB Signals Possible Rate Cut Prompting Trump Tweets” https://www.wsj.com/articles/ecb-signals-possible-rate-cut-bond-buying-extension11560849634?mod=article_inline WSJ (2019). “Computers Can Now Bluff Like a Poker Champ Better Actually” https://www.wsj.com/articles/computers-can-now-bluff-like-a-poker-champ-better-actually11562873541?mod=cxrecs_join#cxrecs_s

WSJ, (2019). “Fed’s Powell Says Facebook’s Libra Raises “Serious Concerns” https://city.wsj.com/articles/2f104ab0-3105-4111-94fe-7498cd6f4694

WSJ (2019). “Computers Can Now Bluff Like a Poker Champ Better Actually” https://www.wsj.com/articles/computers-can-now-bluff-like-a-poker-champ-better-actually11562873541?mod=cxrecs_join#cxrecs_s

White House.Gov (2023). “Building a Clean Energy Economy: A Guidebook to the Inflation Reduction Act’s Investments in Clean Energy and Climate Action” January 2023 version 2

Yellen, Janet (2015)."Inflation Dynamics and Monetary Policy," speech delivered at the Philip Gamble Memorial Lecture, University of Massachusetts, Amherst, September 24