The Reserve Bank and climate change

The March 2019 speech by the Deputy Governor of the Reserve Bank of Australia (RBA), Guy Debelle on climate change and the economy was something of a watershed moment for many commentators in the media. Here was a senior official of Australia's central bank acknowledging the serious impact that climate change could and almost certainly will have on Australia's economy in future years in stark contrast to negligible statements by the Australian Government.

Debelle's address to a public forum hosted by the Centre for Policy Development in Sydney follows closely similar comments by other key federal regulators, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC).

What made Debelle's address so essential is that it was framed within the context of  economic models and monetary policy - the key instruments which the RBA uses to influence the Australian economy.  According to the RBA, when thinking about weather its important to see it in terms of a trend rather than cycles: "The impact of a trend is ongoing, whereas a cycle is temporary".  Frequency of climate events needs to be considered and how the economy adapts to increasing sudden shocks which affect demand and supply.

RBA has joined the Network for Greening the Financial System (NGFS) which is a group of central banks looking at climate issues and impact.

The speech can be accessed at the link below:
Address by the RBA Deputy Governor on climate change