What is green monetary policy?

The ECB now clearly wants to encourage the euro zone’s energy transition. But what forms can a "green monetary policy" take? The ECB could decide to refinance green debt (bonds, loans) on more favourable terms than "brown" (not green) debt, by using the new European taxonomy for defining green, in order to lower the cost of "green" financing. However, this mechanism would be inconsistent with the ECB’s neutrality (it cannot favour certain issuers), and it would encroach on the prerogatives of governments and parliaments (which are normally the only ones able to decide to subsidise certain types of investment). The ECB could go even further and do "green helicopter money": creating money to finance investments in the energy transition; there would be even more of a problem of democracy: it is for governments and parliaments to choose public investments, not for the ECB. There would also be a risk for public finances that would be decided by the ECB: if a euro-zone central bank loses money on an investment, this loss would be passed on to the government since central banks’ profits are paid to the governments. The only reasonable possibility is then to downgrade the rating of "brown" companies for objective reasons: these companies will suffer capital losses (they will be unable to use part of their capital in the future, for example power plants using fossil fuels, oil reserves, plants producing ICE cars); these companies can be the subject of legal actions (on the recent example of companies in the tobacco sector). If the risk of "brown" companies is recognised objectively as being higher than that of "green" companies, then the conditions for refinancing their debt at the ECB will become more unfavourable .