Isabel Schnabel: When markets fail – the need for collective action in tackling climate change
(WorldNews Environment)

SPEECH Frankfurt am Main, 28 September 2020 There has been a growing debate about the role that monetary policy should play in addressing the risks of climate change. The coronavirus (COVID-19) pandemic has intensified this debate in several ways.[1] It has laid bare how large global shocks can affect price stability and hence the conduct of monetary policy. The pandemic has also testified to the vulnerability of financial markets to tail events - a risk that many observers see in the prevailing pricing, or mispricing, of climate risks. In my remarks this afternoon, I will argue that, despite growing efforts, policies to mitigate the adverse and partly irreversible effects of climate change...