Priniting Money to Combat a Changing Climate

In 2015, Combes, et al. produced an empirical paper on the tradeoffs for developing countries in substituting revenues from deforestation with those from seigniorage, revenues obtained from the printing of money. The importance of this study was to equip policy makers with the ability to mitigate deforestation and the resulting effects on the climate by advocating for the printing of more money. Calculations for seigniorage examined only the change in reserve money and not the full monetary base for each developing country. This paper expands the findings of Combes, et al. by using a calculation of seigniorage that uses the full monetary base of developing nations to further demonstrate how these two revenue streams are substitutable. Such a model provides more efficacy to the argument of using fiscal tools to stem global climate risks.