The global financial crash of 2008 saw many economies go into meltdown, including in Ireland. According to Bank of England governor Mark Carney the financial system might now be playing a large part in the meltdown of the planet.
As reported on Tuesday by the Guardian newspaper, Carney has warned that the global financial system is backing carbon-producing projects that will raise the temperature of the planet by more than four degrees – well above the pledge in the Paris climate agreement to limit increases to 1.5 degrees.
International capital markets stand accused of financing activities that would lift global temperatures to more than four degrees above pre-industrial levels, which could result in rising sea levels, searing heatwaves and droughts, food supply issues, and the extinction of certain animal and plant species.
Carney’s analysis is that companies had already secured financing from investors in the global capital markets – worth $85 trillion (€77tn) for stocks and $100 trillion for bonds – that will keep the world on a trajectory consistent with global overheating.
“There are some companies out ahead, either because of stakeholders, or because they’re anticipating that that will change. But there are others that are waiting for the policies to adjust,” Carney told MPs on the Commons Treasury committee.
The Guardian last week revealed that the 20 biggest companies are behind a third of all carbon emissions, which is quite startling.
Carney said banks should be forced to disclose their climate-linked risks within the next two years, with Threadneedle Street drafting a stress test for the UK’s banks based on their climate exposures.
It will be interesting to see if the Central Bank of Ireland’s new governor, Gabriel Makhlouf, will follow this example with Irish banks. The results might be very interesting.
