Former Bank of Canada Governor Mark Carney, whose foresight and guidance are widely recognized for navigating the Canadian economy safely through the 2008 global financial crises, made a momentous speech at a recent gathering of leading insurers organized by Lloyd’s of London. Carney, now the Governor of the Bank of England and chair of the Financial Stability Board, explained that climate change will have a profound impact on global financial stability. He went on to say that climate change is the biggest issue of our future, and that not only are fossil-fuel stranded assets substantial, but the value of energy companies should be reassessed in light of these stranded assets. What is important, Carney said, is that investors must be given the data they need about the impacts of carbon controls in order to “invest accordingly”.
Carney’s concern for the risk climate change poses to global economic stability should be heeded, as should his caution that the window of opportunity to take meaningful action is finite and closing. Unlike Canada whose media glossed over this story, the BBC provided extensive coverage. Mr. Carney’s address and the full text of his speech, “Breaking the tragedy of the horizon – climate change and financial stability”, are also available on the Bank of England’s website.