The world’s central banks have been told they must take responsibility for climate change if they are to stave off a systemic financial crisis – and may even have to buy assets such as coal mines and coal-fired power stations
The Bank for International Settlements – which steers central banks, including the Reserve Bank of Australia – has detailed the financial instability climate change can cause.
Its report warns of “green swan” events, putting an environmental brushstroke to unpredictable and severe “black swan” economic events.
In the worst case scenario, central banks may have to “intervene as climate rescuers of last resort”, and purchase carbon-intensive assets such mines and power stations.
Bank of France Governor Francois Villeroy de Galhau says climate change needs to be integrated into all economic forecasts.
Collateral assessment frameworks also need to be overhauled in order to reflect climate-related risks, he says.
“The stark reality is that we are all losing the fight against climate change,” he wrote in the report.
“In order to navigate these troubled waters, more holistic perspectives become essential to coordinate central banks’, regulators’ and supervisors’ actions with those of other players, starting with governments.”
The report comes as four of Australia’s leading international aid organisations urged the Morrison government to take major climate change action amid the bushfire crisis.
World Vision Australia, Oxfam Australia, Plan International Australia and Save the Children Australia have joined forces to issue a plea for stronger climate measures.
The group wants more ambitious emission reduction targets to limit the global temperature rise to 1.5C, warning many countries will face unmanageable suffering and devastation if more isn’t done.
“The time for debate about climate change is over, it is now time for action. We cannot afford to waste any more time,” it said in a statement on Tuesday.
The four charities have called for the coalition government to sign the Intergovernmental Declaration on Children, Youth and Climate Action.
The aid alliance describes climate change as a human rights issue impacting on health and an adequate standard of living.
The group pointed to a food crisis in southern African, severe floods in Indonesia and a 2018 deadly cyclone in Mozambique.
“Now the climate emergency has well and truly arrived at home, too,” it says.
The aid organisations also want Australia to:
* Demonstrate strong leadership on climate action and transition to a low-emissions global economy
* Support reforestation programs to build community resilience and act as carbon sinks
* Fund a just transition to a zero carbon future, creating abundant job opportunities in a clean economy
* Build the capacity of vulnerable communities in Australia and overseas to deal with the ravages of climate change