Governments must rebuild their economies after the coronavirus crisis to withstand the next shock heading their way – climate change, the central bank governors of Britain and France have said.
“Unless we act now, the climate crisis will be tomorrow’s central scenario and, unlike COVID-19, no one will be able to self-isolate from it,” Bank of England Governor Andrew Bailey and his French counterpart, François Villeroy de Galhau, wrote in a joint article published in the Guardian newspaper.
They said countries around the world were far from meeting their climate goals and the coronavirus pandemic had shown that reacting to a crisis at its height brought huge costs.
“To address climate breakdown, we can instead take decisions now that reduce emissions in a less disruptive manner. That requires us to be strategic. To build back better,” they said.
Central banks have increasingly put the risks of climate change into their assessments of the health of the financial services firms that they monitor.
A group representing central bankers and regulators – the Network for Greening the Financial System – will publish climate reference scenarios in the coming weeks which Bailey and Villeroy said would “raise the bar for the financial sector”.
The article was co-written with Frank Elderson, chair of NGFS who is an executive board member of the central bank of the Netherlands, and with former BoE governor Mark Carney, who is the United Nations’ special envoy for climate action and finance.