A top European central banker Monday rebuked investors for underpricing the risk of climate change and called for a global carbon price to challenge the ecological and financial harm presented by global warming.
“A global climate price is the most powerful way to correct market failure and to set in motion a process whereby firms and households reduce their energy use and make a permanent shift to cleaner energy sources,” according Isabel Schnabel, a member of the European Central Bank’s Executive Board and Governing Council, in remarks prepared to be delivered to the European Sustainable Finance Summit in Frankfurt on Wednesday.
While insurers have suffered as a result of weather-related claims – which accounted for 80% of insured catastrophe losses in 2018, according to Schnabel, European employment could also be adversely affected by a shift to sustainable energy.
“Climate risks are also still firmly embedded in our economic structures. In the euro area, nearly 40% of jobs are in carbon-intensive sectors, compared with 32% in the United States,” she said.
European central bankers have spoken frequently about the role of climate change in economic policy over recent years. ECB President Christine Lagarde has mentioned the issue at nearly every post-rate-setting-meeting briefing since taking up the post last year. And former Bank of England Governor Mark Carney stepped down from central banking to become the United Nations special envoy for climate action and finance.