by Jana Randow, Bloomberg Green, January 20, 2020
Highlights:
- Climate change threatens to provoke “green swan” events that could trigger a systemic financial crisis unless authorities act against such risks, according to the Bank for International Settlements
- Many central banks already contribute to the effort by monitoring climate-related risks through stress tests, incorporating environmental, social and governance criteria in pension funds, or working with banks on disclosing carbon-intensive exposure to assess potential financial-stability risks
- The analysis by officials at the Basel-based institution–often described as the central bank for central banks– adapts the “black swan” concept devised by Nassim Nicholas Taleb to describe adverse events outside the scope of regular expectations with wide-ranging or extreme impacts
The bank’s warning drives home the need for rapid decarbonization to avoid destabilizing the planet’s climate, as well as our global economic system.
Maddie Maffia
Madelyn is a graduate of Oregon State University, with a degree in environmental science with specializations in aquatic biology and environmental water resources.
