Global Economy at Risk from Climate Change
Mr Carney is chairman of the Financial Stability Board, which was set up by the G20 in 2009 to monitor risks to the financial system. He told delegates time is running out if we want to avoid the worst effects of global temperature rises: “Climate change is the tragedy on the horizon. We don’t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors, imposing a cost on future generations that the current generation has no direct incentive to fix,” he said. “The far-sighted amongst you are anticipating broader global impacts on property, migration and political stability, as well as food and water security. So why isn’t more being done to address it? In other words, once climate change becomes a defining issue for financial stability, it may already be too late.”
The governor pointed out that since the 1980s weather-related loss events had tripled, with inflation adjusted losses to the insurance industry rising five-fold to £33 billion annually. He also warned fossil fuel companies that the introduction of legislation aimed at curbing global temperature rises would leave them exposed to big financial losses associated with unburnt stocks.