One of the world’s most influential central bankers warned Tuesday that climate change poses a massive threat to the world’s financial stability.
Speaking at an event at Lloyds of London, Governor of the Bank of England Mark Carney urged the audience to reflect on the upswing in weather-related disasters and a rise in financial costs. According to Carney, climate change will have a major impact on the worldwide insurance market and global finance.
In a dire prediction, Carney claimed that the threats from climate change at present “pale in significance compared with what might come.” Adding to the stream of pessimism, he noted that the current generation of voters and policy makers have little incentive to act to prevent future catastrophes.
He argued that effective action will only be taken to tackle the effects of climate change if there is an overwhelming financial interest.
Although he did not attribute many of the world’s extreme weather events to man-made carbon dioxide emissions, Carney argued the evidence that man plays a role in climate change is becoming increasingly strong. He warned of a host of policy areas that could be affected by a changing climate:
The far-sighted amongst you are anticipating broader global impacts on property, migration and political stability, as well as food and water security.
If global leaders want to limit temperature rises to two degrees, it would mean that the vast majority of fossil fuel reserves would be unburnable unless they are offset with a massive expansion of carbon capture technology, he added.
As well as his responsibilities as the Bank of England, Carney is head of the Financial Stability Board, which coordinates financial regulation with the G-20. The FSB is now actively considering recommending that the G-20 that should act to make companies disclose their “carbon intensity.”
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