When interest on money is charged, money in the future is worth less than money now. This has a major impact on investment choices. Interest promotes investments that are unsustainable and wasteful. If no interest was charged, sustainable investments would be more attractive.
For example: you want to build a house and you have the choice between a house of €100,000 with a yearly energy cost of €5,000 or a house of €200,000 with a yearly energy of €2,000. When the interest rate is 10 percent, the cost for a cheap house with high energy consumption is as follows: €10,000 plus interest €5,000 energy is €15,000 per year. The expensive house with low energy costs: €20,000 interest plus €2,000 energy is €22,000 per year. If you do not have to pay interest, the expensive house with low energy cost will be cheaper.
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