In comparing climate policies, we first find that PBoC is the only central bank that conducts meaningful monetary policy that supports the green transition, such as through targeted green lending, green bonds in collateral frameworks, and differing interest rates on reserve requirements. Second, in comparing independence dynamics, we find that the initiative for green action originates in higher government bodies, which directly command the PBoC to act, while the PBoC retains a high degree of operational independence when executing these policies. On the other hand, legal independence, mandates, and other restricted avenues of government influence restrict the green action of the other central banks. As the literature on central banking develops, it has demonstrated that consensus on monetary policy moves in cycles, notably from a period of non-independence during the Great Inflationary period of the 1970s to the present state of independence following the Great Moderation (Best, 2025; Downey, 2024; Moschella, 2024).
Indeed, before contemporary views of independence were commonplace, non-independent central banking was common in the post-war years across both democratic and undemocratic countries (Best, 2025; Moschella, 2024). From this, we argue that the climate era requires revisiting central bank independence. As a first step in this effort, the insights from the PBoC suggest that central banks can address the climate crisis through a setup that embraces what we term ‘government directing with operational independence.’ This suggests that future research on the topic needs to both place greater emphasis on the case of PBoC and explore how nonindependence might work across the world.
