Central Banking and Climate Change

Question A:

Under current policies on climate change, the associated physical risks (such as those arising from total seasonal rainfall and sea level changes, and increased frequency, severity, and correlation of extreme weather events) will be at most a very small factor in monetary policy decisions over the next decade.

Responses weighted by each expert's confidence

Question B:

The physical risks associated with climate change under current policies are likely to threaten financial stability over the next decade.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London Did Not Answer Bio/Vote History
Antras
Pol Antras
Harvard
Strongly Agree
8
Bio/Vote History
Seems like a rather inadequate policy tool, even if other coordination mechanisms may not be working. Wrong time horizon too.
Besley
Timothy J. Besley
LSE Did Not Answer Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Agree
8
Bio/Vote History
strange question... If there is a major global warming catastrophe, then I suspect this will affect all policies, monetary, fiscal, etc.
Bloom
Nicholas Bloom
Stanford
Disagree
6
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Uncertain
5
Bio/Vote History
It is not clear whether these events will have a sizeable impact on inflation.
Carletti
Elena Carletti
Bocconi
Uncertain
6
Bio/Vote History
The central banks seem to be aware of the importance of climate risk and thus seem to think already how to incorporate it in their models.
Danthine
Jean-Pierre Danthine
Paris School of Economics
Disagree
7
Bio/Vote History
Serious economic disruptions are likely without significant policy changes to which central banks will have to react.
De Grauwe
Paul De Grauwe
LSE Did Not Answer Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Uncertain
8
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Uncertain
4
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE Did Not Answer Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Uncertain
3
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Strongly Agree
8
Bio/Vote History
I don't know if they will be an important factor, but I believe they should not be. There must be better tools to fight CC.
Giavazzi
Francesco Giavazzi
Bocconi
Agree
7
Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth
Uncertain
3
Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Strongly Agree
9
Bio/Vote History
I do not see why climate change may result in drastic changes in MP
Honohan
Patrick Honohan
Trinity College Dublin
Disagree
10
Bio/Vote History
Maybe quantitatively small, but could be qualitatively significant in retaining public confidence in central banks...
Javorcik
Beata Javorcik
University of Oxford
Strongly Disagree
6
Bio/Vote History
Kleven
Henrik Kleven
Princeton Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Uncertain
6
Bio/Vote History
The answer is "uncertain", because I fear political pressure combined with central bank hubris may lead to action based on a false positive
Kőszegi
Botond Kőszegi
Central European University
No Opinion
Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy
Uncertain
2
Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Uncertain
2
Bio/Vote History
Climate change can certainly create supply shocks that are relevant to monetary policy. Hard to know how large these shocks might be.
-see background information here
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale Did Not Answer Bio/Vote History
Neary
Peter Neary
Oxford
Uncertain
3
Bio/Vote History
Extreme weather events may destabilize financial markets tho risks from global warming increasing pressure on migration are likely greater
O'Rourke
Kevin O'Rourke
Oxford
Uncertain
1
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Uncertain
2
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Agree
8
Bio/Vote History
Not in the next decade. Monetary policy seems most likely to begin paying attention to climate issues in Europe under Lagarde.
Persson
Torsten Persson
Stockholm University
Strongly Agree
5
Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science
Uncertain
10
Bio/Vote History
Big events will require big responses but their occurrence is uncertain
Portes
Richard Portes
London Business School
Strongly Agree
8
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Agree
8
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Disagree
8
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Agree
8
Bio/Vote History
Rey
Hélène Rey
London Business School
Disagree
8
Bio/Vote History
Climate related events can be supply (for some) or demand (for others) shocks. Some are transitory. They affect monetary policy.
Schoar
Antoinette Schoar
MIT
Agree
7
Bio/Vote History
monetary policy is not a useful tool to tackle climate risks. We will need investment in science and regulation of emission standards etc
Sturm
Daniel Sturm
London School of Economics
Agree
4
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Agree
6
Bio/Vote History
Vickers
John Vickers
Oxford
Agree
6
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Strongly Agree
8
Bio/Vote History
Weder di Mauro
Beatrice Weder di Mauro
The Graduate Institute, Geneva
Disagree
5
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Agree
5
Bio/Vote History
It's not clear climate change will be a major issue for central banks over this period, particularly given the narrow remit that many have.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Agree
4
Bio/Vote History
For monetary policy stricto sensu, the principle is one instrument-one objective. Going beyond would open a Pandora box.
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London Did Not Answer Bio/Vote History
Antras
Pol Antras
Harvard
Disagree
6
Bio/Vote History
That's not my reading of the evidence. The threat seems too far in the future to affect financial variable any time soon. But I'm no expert.
Besley
Timothy J. Besley
LSE Did Not Answer Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Uncertain
8
Bio/Vote History
Bloom
Nicholas Bloom
Stanford
Disagree
7
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Agree
6
Bio/Vote History
Some asset classes may abruptly lose value.
Carletti
Elena Carletti
Bocconi
Agree
7
Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Uncertain
6
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE Did Not Answer Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Agree
6
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Disagree
5
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE Did Not Answer Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Agree
8
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Uncertain
6
Bio/Vote History
I'd think the next decade is too short a horizon to see any impact.
Giavazzi
Francesco Giavazzi
Bocconi
Agree
6
Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth
Agree
5
Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Uncertain
5
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Agree
7
Bio/Vote History
Maybe geographically limited in the next decade, but increasingly broad later on.
Javorcik
Beata Javorcik
University of Oxford
No Opinion
Bio/Vote History
Kleven
Henrik Kleven
Princeton Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Disagree
6
Bio/Vote History
Kőszegi
Botond Kőszegi
Central European University
Agree
8
Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy
Agree
3
Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Uncertain
2
Bio/Vote History
Agree climate change can pose systemic risks. But don't know how likely. There are huge time lags in (nonlinear) physical climate responses.
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale Did Not Answer Bio/Vote History
Neary
Peter Neary
Oxford
Uncertain
3
Bio/Vote History
Very hard to forecast
O'Rourke
Kevin O'Rourke
Oxford
Uncertain
1
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Agree
8
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Strongly Disagree
8
Bio/Vote History
Not in the next decade. Possible, through property insurance, but not likely.
Persson
Torsten Persson
Stockholm University
Strongly Agree
5
Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science
Uncertain
10
Bio/Vote History
Same as before. Climate change events are unpredictable but their implications can be destabilising
Portes
Richard Portes
London Business School
Disagree
8
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Uncertain
7
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Strongly Agree
6
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Uncertain
4
Bio/Vote History
Rey
Hélène Rey
London Business School
Agree
9
Bio/Vote History
Portfolios will be affected (stranded assets in particular). Due to uncertainty and procrastination, likely to translate into instability.
Schoar
Antoinette Schoar
MIT
Uncertain
6
Bio/Vote History
Climate change likely affects economic stability/welfare/politics.Financial (in)stability uncertain,depends on speed/predictability ofchange
Sturm
Daniel Sturm
London School of Economics
Disagree
4
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Uncertain
3
Bio/Vote History
Vickers
John Vickers
Oxford
Uncertain
8
Bio/Vote History
If such risks do threaten financial stability, it will be mainly because financial regulation (eg of bank capital) is too weak
Voth
Hans-Joachim Voth
University of Zurich
Strongly Disagree
7
Bio/Vote History
Weder di Mauro
Beatrice Weder di Mauro
The Graduate Institute, Geneva
Uncertain
9
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Disagree
3
Bio/Vote History
I could be wrong here. There could be tipping point events where climate emergencies become a major financial issue.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Agree
6
Bio/Vote History
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History