Climate change: policies to manage its macroeconomic and financial effects
Joaquin Bernal () and
José Antonio Ocampo
Working papers from Red Investigadores de Economía
It is increasingly recognized that climate change generates major macroeconomic and financial risks. There are physical risks associated to the disasters generated by hydrometeorological events and to gradual but persistent changes in temperatures that have structural impacts on economic activity, productivity and incomes. Additionally, the process of adjustment towards a lower-carbon economy, prompted by changes in climate-related policies, technological disruptions and changes in consumer preferences, generates transition risks. After a brief analysis of the macroeconomic, fiscal and tax policies to manage these risks, this paper concentrates on: (i) how financial policies can help improve transparency and climate-related risk disclosure in financial institutions’ balance sheets and assets prices,particularly with appropriate prudential regulation and supervision; and (ii) how those risks could be taken into account in monetary policy and central banks’ balance sheets and operations. The paper ends with some reflections on the Covid-19 pandemic and the will for a “green” recovery.
Keywords: climate change; carbon tax; financial policy; monetary policy; central banks (search for similar items in EconPapers)
JEL-codes: E50 G18 H23 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-ene, nep-env, nep-mac and nep-res
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Working Paper: Climate change: policies to manage its macroeconomic and financial effects (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rie:riecdt:63
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