Government action combating so-called man-made global warming could potentially lead to another major worldwide financial collapse, according to one of the former heads of the Bank of England.
Paul Fisher, the former deputy head of the Bank Of England, said in an interview Monday that rules and regulations meant to address climate change are “potentially a systemic risk” to the economy. A sudden repricing of assets as a result of climate change “could be the trigger for the next financial crisis,” he added.
Fisher, who also formerly led the U.K.’s Prudential Regulation Authority, noted that the meltdown could be quick if businesses don’t react quickly to environmental regulations.
“You don’t need to believe in climate change, you don’t need to believe that it is man-made,” Fisher added. “You just need to believe that governments are going to do stuff and that is going to affect your business. And then it is a material risk.”
Fisher went on to draw a distinction between climate change’s effect on an economy and how Britain’s exit from the European Union supposedly resulted in a fall in the price of sterling.
“That is exactly the sort of event you might get with climate change,” the former financial regulator said about how government regulators may react to droughts or hurricanes.
Fisher’s warning is not an all together new phenomenon, as climate scientists have made similar predictions in the past.
Climate scientist Joe Romm, for instance, wrote an article in June arguing Brexit was driven by global warming.
There are some incidents where global warming may be unstoppable, Romm noted at the time, adding: “But it appears there may also be political tipping points, where certain climate impacts cause so much widespread harm simultaneously that they simply fragment the world.”
“In this fatally-fractured future, countries focus almost exclusively on the ever-worsening climate devastation to their country, destroying the possibility of collective action by the world to help those worst off,” he wrote.
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