Climate change: policies to manage its macroeconomic and financial effects
Authors
Bernal-Ramirez, Joaquin
Ocampo, José Antonio
Editor
Publication date
2020-09-17
Document language
eng
Publisher
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Abstract
It is increasingly recognized that climate change generates major macroeconomic and financial risks. There are physical risks associated to the disasters generated by hydrometeorological events and to gradual but persistent changes in temperatures that have structural impacts on economic activity, productivity and incomes. Additionally, the process of adjustment towards a lower-carbon economy, prompted by changes in climate-related policies, technological disruptions and changes in consumer preferences, generates transition risks. After a brief analysis of the macroeconomic, fiscal and tax policies to manage these
risks, this paper concentrates on: (i) how financial policies can help improve transparency and climate-related risk disclosure in financial institutions’ balance sheets and assets prices,particularly with appropriate prudential regulation and supervision; and (ii) how those risks could be taken into account in monetary policy and central banks’ balance sheets and operations. The paper ends with some reflections on the Covid-19 pandemic and the will for a “green” recovery.
Description
Códigos JEL
E50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General, G18 - General Financial Markets: Government Policy and Regulation, H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies, Q54 - Climate; Natural Disasters and Their Management; Global Warming
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Keywords
Climate change, Carbon tax, Financial policy, Monetary policy, Central banks
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Cambio climático
