Editorials & Other Articles

Uncle Joe

(58,424 posts) Wed Sep 30, 2015, 02:26 PM Sep 2015

Carney warns of risks from climate change 'tragedy of the horizon'

Mark Carney, the governor of the Bank of England, has warned that climate change will lead to financial crises and falling living standards unless the world’s leading countries do more to ensure that their companies come clean about their current and future carbon emissions.

In a speech to the insurance market Lloyd’s of London on Tuesday, Carney said insurers were heavily exposed to climate change risks and that time was running out to deal with global warming.

(snip)

“The horizon for monetary policy extends out to two to three years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle – about a decade. In other words, once climate change becomes a defining issue for financial stability, it may already be too late.”

Carney said there were three ways in which climate change could affect financial stability: physical risks, such as claims from floods and storms; liability risks that could arise if those suffering climate change losses sought compensation from those they held responsible; and transition risks caused by the revaluation of assets caused by the adjustment to a lower-carbon economy.

(snip)

“That budget amounts to between a fifth and a third of the world’s proven reserves of oil, gas and coal. If that estimate is even approximately correct it would render the vast majority of reserves “stranded” – oil, gas and coal that will be literally unusable without expensive carbon-capture technology, which itself alters fossil fuel economics.

http://www.theguardian.com/environment/2015/sep/29/carney-warns-of-risks-from-climate-change-tragedy-of-the-horizon

There is more on the link.