Warning about the climate and the disastrous impact that climate change, if not stopped, will have on the economy. It was launched by the governor of the Bank of England (the central bank of the United Kingdom) and both for the tones he used and for the institution from which he comes, his speech this morning at Lloyd's in London, temple of the world, is not really usual insurance-financial not only English.
"A Tragedy on the Horizon" Governor Mark Carney defined it, arguing that climate change will lead to a financial crisis and a fall in our living standards if the most advanced countries do not do more on carbon emissions and industrial pollution: “There is still time to act but the window of opportunity is shrinking“. “Current climate change – continues Carney – pales in comparison to what could happen. The more enlightened among you foresee a broad global impact on property, migration, political stability, as well as food and water security. So why don't we do more to address this?"
LOSSES QUINTUPLED
Carney stressed the growing human contribution to climate change and recalled that major climate-related damages have tripled since 1980. In particular, the Insurance industry losses adjusted for inflation quintupled, to $50 billion a year.
“Climate change – says Carney – is a tragedy on the horizon. We don't need an army of asset experts to tell us that i catastrophic impacts of climate change they will make themselves felt beyond the traditional horizon, imposing a cost on future generations that current generations are unable to fix”.
ACT NOW
“The horizon of monetary policy – he adds – is two, three years. For financial stability it is a little longer, but typically does not go beyond the credit cycle horizon, i.e. about a decade. In other words, once climate change is defined as a problem for financial stability, it may be too late".
Carney gives three examples of how climate change can impact financial stability: physical risks, such as repayments for storms or floods; the financial risks that could arise from the lawsuits of those who suffer harm to those held responsible for climate change; the risks caused by the revaluation of assets caused by the adjustments related to a lower carbon economy.
