缅北禁地

Given the financial challenges posed by climate change – the damages and need for adaptation and mitigation – it’s crucial for central banks to integrate climate factors into their monetary policies. Such measures are commonly referred to as “climate” central banking. But given the need for policy coherence to avoid severe tradeoffs in climate central banking, the report recommends caution. It underlines that governments, not central banks, should address these tradeoffs. If guided by industrial policy goals that target a green transition, these banks can play a pivotal role in managing climate-related risks to the financial system and economy and can channel funds towards a green structural transformation. When a central bank channels more finance to decarbonization projects it helps make domestic industries less vulnerable to climate policies implemented in other countries, improving the resilience of the country’s economy and financial system. To champion climate-centric development, LDC governments should consider updating central bank mandates. However, having a climate mandate doesn’t guarantee the effective use of climate central banking tools. The report stresses that these tools should align with other economic and social policies to avoid undermining other developmental goals. Central banks should also ensure the tools fit the local economic structure. For example, in an economy in which formal credit constitutes only a small proportion of the total credit given to households and firms, the introduction of climate central banking would have a limited impact. The report provides a decision tree for decisions on when to use climate central banking and which tools to employ.