BOE Governor Carney joins Xi, Pope and Musk to fight global warming
September 30, 2015 3:11 PM   Subscribe

Breaking the Tragedy of the Horizon – climate change and financial stability: Bank of England Governor Mark Carney warns investors face 'huge' climate change losses - "The Financial Stability Board, an international body monitoring the global financial system that Mr Carney chairs, may recommend G20 countries make it easier for investors to compare the 'carbon intensity' of different assets."
A wholesale reassessment of prospects, especially if it were to occur suddenly, could potentially destabilise markets, spark a pro-cyclical crystallisation of losses and a persistent tightening of financial conditions. In other words, an abrupt resolution of the tragedy of horizons is in itself a financial stability risk.
also btw...
posted by kliuless (9 comments total) 14 users marked this as a favorite
Please let us be waking up fast, please let us be waking up fast, please let us be waking up fast...
posted by Reverend John at 3:20 PM on September 30, 2015 [1 favorite]

So Mark Carney is saying that fossil fuel industries could face enormous losses, not from the effects of climate change itself, but instead from future laws and popular trends that seek to lower emissions. If decarbonization (or carbon taxes) become a thing worldwide, it could make the stock of oil companies "radioactive" due to the added cost of all those emissions that they suddenly have to pay, and the lack of future revenue when fossil fuel reserves still in the ground become too expensive to extract.
posted by Kevin Street at 4:24 PM on September 30, 2015

Fantastic, I'd like to see a recompensation fund driven by cap & trade or carbon taxes as a point in future International free trade agreements. A financial lever could put action within a current political cycle.
posted by BrotherCaine at 4:29 PM on September 30, 2015

Does the Bank of England have any formal connection to the UK government? If so, I'd expect a job opening there soon. I know that no Federal Reserve bigwig would be caught dead making a statement like that, except as part of a resignation announcement.

I've suspected there is a formula written on a chalkboard at the boardroom of every Big Oil company with the legend "when X/Y*Z=100, sell all stock". But more recently, it seems as if they may have developed long-term plans to make Environmental Disaster profitable... to paraphrase a Seinfeld character, "Climate Change is real, and it's SPECTACULAR!"
posted by oneswellfoop at 4:44 PM on September 30, 2015

Does the Bank of England have any formal connection to the UK government?

yes! the BOE is the world's second oldest central bank in existence (after sweden's riksbank ;) "It was established to act as the English Government's banker, and is still the banker for the Government of the United Kingdom."

carney, fwiw, was hired in 2013 from the bank of canada, in part to clean house because canadian banks were better regulated and UK banks weren't...
posted by kliuless at 5:04 PM on September 30, 2015 [2 favorites]

Great post. Nice to see some positive news about the ongoing climate clusterfuck.
posted by AdamCSnider at 7:00 PM on September 30, 2015

I find it completely terrifying that politicians, big corporations, and powerful people like Carney are banging the drum. It signals to me that shit has hit the fan, forcefully and in great volume.
posted by five fresh fish at 4:21 AM on October 1, 2015

Five fresh fish, I knew the shot was hitting the fan when I saw this speech last year. It broke my heart to see this man stand up in front of the world and beg for the wealthy to recognize the humanity in the people who will disproportionately suffer the brunt of climate change
posted by thebotanyofsouls at 9:05 AM on October 1, 2015

I think the Davos people (ie: the world's technocrats, but not necessarily the politicians) have mostly come to accept that a tremendous shift from the carbon economy to renewables has to happen. For them it's still tomorrow's problem, but that's an improvement from thinking it was the next generation's problem, or not acknowledging climate change at all.
posted by Kevin Street at 1:37 PM on October 1, 2015

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