A ‘green interest rate?’ Fed digs into climate change economics

In their deliberations on monetary policy, Federal Reserve policymakers need to consider many factors, but up to now, climate change has not been one of them.

But as worries about the warming planet increase, the U.S. central bank is taking a closer look at the economic impacts of higher temperatures, more frequent severe weather, and rising sea levels.

A “green interest rate” is one of the ideas on view Friday as the San Francisco Fed convenes the U.S. central bank’s first-ever conference on climate change and economics. The event is so oversubscribed a webcast has been created to meet demand.

While the Fed lags central banking peers such as the Bank of England in making climate change an explicit part of its financial stability remit, the conference is the latest sign the Fed has started to take the risks and costs of global warming seriously.

“It’s important for us from a monetary policy perspective to know what the potential growth rate of the economy is and if climate events or climate risk is going to shave that off, even if it’s over the long term,” San Francisco Fed chief Mary Daly said in New York earlier this week.

Συνέχεια ανάγνωσης εδώ: www.weforum.org