The Climate and the Global Economy are both in crisis. We can fix both.

There are two global crises unfolding. While students around the world are going on a global climate strike, there are fears that in 2020, there will be a global recession.

Even politicians and companies that want to address climate change feel they cannot because they just do not have the money. People who oppose action argue it will hurt the economy. Both are wrong because the economic ideas they are relying on are out of date.

We can address both at the same time through a “Green QE”: having central banks finance green investments and provide debt relief.

This will save the planet and the economy at the same time.

First, let us deal with the economic aspect. Eleven years ago, in 2008, there was a global financial crisis. It was caused by bad mortgages bundled into bad investments backed by bad insurance — and it nearly destroyed the global financial system.

What caused it? Household debt — the same thing that is undermining Canada’s economy right now. While unemployment is low, debt and housing costs are crushing people and choking the economy.

The average Canadian spends 43% of their income on housing. Canadian households owe more than 100% of GDP, and 170% of their annual incomes. 50% of Canadians are $200 a month away from insolvency. Many live in the suburbs and interest payments on debt may be equal to or outstrip taxes for which, at least, people get services.

Combined with austerity, stagnant wages and soaring housing prices, debt is driving extreme politics, desperation and exploitation of people and the environment alike.

Why are things not getting better? Because after 2008, governments and central banks fixed the wrong problem. While some governments cut and others spend, by far the largest amount of money was put toward “quantitative easing,” or QE. What this means is that the Bank of Canada and others printed billions, even trillions, of dollars and gave it to banks and investors. In Canada, it was $66-billion. Around the world, it was about $15-trillion.

What central banks and governments have been doing has not been working. Now, in Europe at least, fear of another recession is driving talk of a change. One such idea has been “helicopter money,” which means central banks will print money and give it directly to individuals to reduce debt. (This happened in Australia after 2008).

There is another option — Central Banks can also print money to finance government investments like infrastructure. This is what the Bank of Canada was created for and did for 40 years with great success. 15% of the cost of the U.S. war effort in WWII was paid for by the Federal Reserve buying US government bonds.

There is bound to be fearmongering about inflation, for which there is no evidence, and is based on a flawed assumption that no one has any debt. It should be clear that when funds are used to eliminate debt, it reduces costs.

What is required to save developed economies in Canada and Europe is debt relief — either directly or through better jobs.

What is required to save the environment is investment in green technology and environmental renewal.

A Green QE for the People is the answer, and any country with its own currency can act on its own.

The Bank of Canada and the Federal Government should:

→ Buy some of the debt of provincial Hydro companies in BC, Manitoba, Newfoundland, Ontario and elsewhere on the condition that they stay public. This would restore these Crowns to financial health and allow lower power rates for business and household customers.

→ Finance federal and provincial infrastructure projects of electrification, including renewing and expanding the national power grid and transportation.

→ Finance the development of sustainable carbon-neutral green fuels that people can use in existing vehicles so they don’t have to be junked.

→ Directly reduce Canadians’ debt burden based on a strict cut-off date so forgiveness can’t be gamed.

The other critical step is to work with nature, stop exploitive and destructive overharvesting and allow for a sustained period of natural regrowth and regeneration. The goal should be to maximize natural regrowth and expand natural ways to draw down CO2 from the atmosphere.

This includes:

→ Returning areas to wilderness and restoring ecosystems. This can include paying people, businesses, farmers and communities to do so. Examples include planting millions of new trees, forests, wetlands, and native grasslands, and encouraging carbon banking practices for farmers.

→ Regulate destructive resource extraction practices.

→ Ensure a fair transition for workers.

All of this would improve the economy while dealing effectively and immediately with the Climate Crisis. There will always be those who say it can’t be done. Perhaps these people can explain how central banks could find $15-trillion to save the global 1%, but we can’t find the money to deal with a climate crisis.

Dougald Lamont is the Leader of the Manitoba Liberal Party and MLA for St. Boniface.