Economic Toll of Climate Change: Axios

Substantial numbers of financiers and politicians are dismiss worries over climate change. Yet, “Top economists say the economic effects of climate change are just starting to be felt – and they're likely to start snowballing,” reports Courtenay Brown for Axios, who goes to explain how increasing wildfires, floods and natural disasters can disrupt the electrical grid, electronic payment and insurance systems. The US Federal Reserve has been slow compared with other central banks in addressing the financial challenge of climate change. Economists presented warnings at the Federal Reserve’s first climate change research conference: Global GDP per capita could fall by 7 percent before 2100, while meeting the terms of the Paris Climate Accord could limit the loss to 1 percent; worker productivity is expected to decline. The International Monetary Fund suggests that mitigation is essential in preparing for climate change and that central banks and the financial industry have a role. – YaleGlobal

Economic Toll of Climate Change: Axios

Climate change will reduce economic growth: Central banks and the financial industry have role in preparing societies – with many tools available
Courtenay Brown
Tuesday, November 12, 2019

Leaders Fiscal tools Carbon prices and taxes Sweden, California Public investment EU Infrastructure Investment Plan Public-private partnerships China Development Bank Public guarantees World Bank, European Investment Fund Financial policy tools Address underpricing, transparency Bank of England Reduce short-term bias Funds with ESG policies Support green securities People’s Bank of China green bonds Promote climate finance People’s Bank of China, Banque de Liban Monetary policy tools Include risks in portfolio management Bank of England, Bank of Japan, Bangladesh Bank, Norges Bank, DNB Collateral frameworks Credit allocation policies People’s Bank of China, Reserve Bank of India, Bangladesh BankRead the article from Axios about the US Federal Reserve considering its role in preparing for climate change.

Courtenay Brown is a Markets Reporter at Axios.

The International Monetary Fund urges the financial industry and central banks to prepare for climate change, and observations from the working paper on “Macroeconomic and Financial Policies for Climate Change Mitigation” follow:

The broad consensus in the literature is that expected damages caused by unmitigated climate change will be high and the probability of catastrophic tail-risk events is nonnegligible.

The appropriate response to climate change depends on whether a maximization or risk management approach is taken.

The lack of accounting for co-benefits of mitigation also implies that countries’ existing commitments may not go far enough.

The transition requires changes in relative prices as well as large scale public and private investments.

A set of market and governance failures prevent the required transition from taking place in time via the market.

Fiscal policy has a natural role to play in achieving climate mitigation, and a wide range of fiscal policy tools are available.

Political economy dimensions are critical to successful climate change mitigation.

Climate change mitigation can generate inequality within and between countries.

Climate change mitigation raises difficult problems of international policy coordination.

Climate mitigation policies could increase growth and development, and reduce poverty, if well designed and implemented.

The stakes of climate change mitigation are existential.

Axios
Related Links: 

“We’ll Be Watching You”: Thunberg’s UN Speech

Climate Change Underestimated: Scientific American

Climate Change Impacts on Power Systems

Rulebook for a Changing Climate

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