The European Central Bank has decided to strengthen its climate change strategy, also focusing more on “the growing impact of the climate crisis on the economy and the financial system.” In the new plan 2024-2025, the Central Institute explains that there are three areas at the heart of renewable work: the implications of the green transition, the tangible impact of climate change, and the study of the risks to which the economy is exposed associated with climate change. nature.
Regarding the green transition, the ECB intends above all to check the necessary costs and investments.
Regarding climate change, the goal is to understand the impact of adaptation measures to rising temperatures on the economy. Finally, regarding risks, we will aim to understand how they are increasing as a result of the interaction between natural degradation and climate change, and how the economy and thus the performance of monetary policy have changed as well.
“A warmer climate and natural decline are driving change in our financial system,” said ECB President Christine Lagarde, explaining that to complete its mandate, the ECB needs to expand and enhance understanding of these changes and their impacts.
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