Central Banking, Climate Change and Environmental Sustainability

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Co-organized with the Bank of England
London, United Kingdom
Call for Papers (PDF)

  • Climate change and other environmental challenges are moving up policy agendas worldwide. Nonetheless, the potential implications of environmental risks and scarcities for central banking as well as the linkages between financial regulation, monetary policy and environmental sustainability remain largely unexplored.

    Workshop
    Against this background, the Council on Economic Policies (CEP) and the Bank of England (BoE) are organizing a workshop on Central Banking, Climate Change and Environmental Sustainability, on November 14-15, 2016 at the Bank of England in London, UK.

    The event will bring together researchers from academia, central banks, and other non-academic research institutions. It is part of a larger CEP program on monetary policy and sustainability, and a contribution towards the core research theme 5 (“Response to Fundamental Change”) of the BoE’s One Bank Research Agenda.

    Topics
    We are particularly interested in the following topics, but will also consider papers that deal with related issues that are not specifically mentioned below.
    – What are possible effects of environmental risks (e.g. climate change) and policies to mitigate them (e.g. carbon taxes) on central bank objectives (e.g. price and financial stability)? Through which transmission channels do these effects emerge? What roles might the financial system play in propagating or mitigating these risks?
    – How can environmental risk analysis, such as stress testing, scenario analysis and catastrophe risks models, be designed to better inform financial decision makers?
    – How can economic models (e.g. DSGE models, stock-flow consistent models) account for such effects?
    – What environmental externalities might arise from monetary policy and financial regulation? Through which transmission channels? How can negative environmental externalities resulting from monetary policy and financial regulation be mitigated?

     

  • Monday, November 14, 2016
    09.30-09.45
    Opening remarks
    Minouche Shafik, Bank of England
    Alexander Barkawi, Council on Economic Policies
    Research session: Central Banking and Climate Change
    Chair: Alexander Barkawi (CEP)
    09.45-10.45Let’s talk about the weather: the impact of climate change on central banks
    Sandra Batten, Bank of England
    Rhiannon Sowerbutts, Bank of England
    Misa Tanaka, Bank of England (Paper) (Slides)
    Discussant: Martijn Regelink, De Nederlandsche Bank (Slides)
    10.45-11.15Coffee break
    Research session: Environmental Risk and Financial Stability
    Chair: Nicolas Pondard (BoE)
    11.15-12.15Unhedgeable risk
    Scott Kelly, University of Technology Sydney (Paper) (Slides)
    Jake Reynolds, University of Cambridge Institute for Sustainability Leadership
    Discussant: Irene Monasterolo, Boston University (Slides)
    12.15-13.30Lunch
    13.30-14.30The financial impact of divestment from fossil fuels
    Auke Plantinga, University of Groningen
    Bert Scholtens, University of Groningen and University of St. Andrews (Paper)
    Discussant: Ben Caldecott, Oxford University
    14.30-15.30Climate change, financial stability and monetary policy
    Yannis Dafermos, University of the West of England (Paper) (Slides)
    Maria Nikolaidi, University of Greenwich
    Giorgos Galanis, Goldsmiths, University of London and New Economics Foundation
    Discussant
    : Alex Bowen, London School of Economics (Slides)
    15.30-16.00Coffee break
    Policy session: Central banking, climate change and environmental sustainability
    16.00-16.45Welcome by Sarah Breeden, Bank of England
    Keynote speech: Central Banks and the Environment: Changing Horizons,
    New Challenges

    Achim Steiner, Oxford Martin School, University of Oxford (Slides)
    16.45-18.00Panel discussion
    Andrew Haldane, Bank of England
    Rowan Douglas, Willis Group
    Mariana Mazzucato, University of Sussex
    Olaf Sleijpen, De Nederlandsche Bank
    Moderator: Alexander Barkawi, Council on Economic Policies
    Tuesday, November 15, 2016
    Research session: Environmental Policies and Monetary Policy
    Chair: Misa Tanaka (BoE)
    09.00-10.00An extended integrated assessment model for mitigation and adaptation policies on climate change
    Helmut Maurer, University of Muenster
    Willi Semmler, New School for Social Research (Paper 1) (Paper 2) (Slides)
    Anthony Bonen, New School for Social Research
    Discussant: Emanuele Campiglio, Vienna University of Economics and Business (Slides)
    10.00-11.00A climate stress-test of the financial system
    Stefano Battiston, University of Zurich (Slides)
    Antoine Mandel, Paris School of Economics
    Irene Monasterolo, Boston University
    Franziska Schütze, Global Climate Forum
    Gabriele Visentin, University of Zurich
    Discussant: Olivier de Bandt, Banque de France (Slides)
    11.00-11.20Coffee break
    11.20-12.20GHG emissions control and monetary policy
    Barbara Annicchiarico, University of Rome Tor Vergata (Slides)
    Fabio Di Dio, SOGEI S.P.A.
    Discussant: Marco Raberto, University of Genova (Slides)
    12.20-13.10Lunch
    Research session: Macroeconomic Impact of Climate Change
    Chair: Pierre Monnin (CEP)
    13.10-14.10How costly is global warming? Implications for welfare, business cycles and asset prices
    Michael Donadelli, Goethe University Frankfurt (Paper) (Slides)
    Marcus Jüppner, Goethe University Frankfurt
    Max Riedel, Goethe University Frankfurt
    Christian Schlag, Goethe University Frankfurt
    Discussant: Sandra Batten, Bank of England (Slides)
    14.10-15.10The carbon bubble: Climate policy in a fire-sale model of deleveraging
    David Comerford, University of Strathclyde (Paper) (Slides)
    Alessandro Spiganti, University of Edinburgh
    Discussant: Manoj Atolia, International Monetary Fund (Slides)
    15.10-15.30Coffee break
    15.30-16.30The inflationary costs of extreme weather in developing countries
    Eric Strobl, Aix-Marseille School of Economics (Paper) (Slides)
    Andréas Heinen, University of Cergy-Pontoise
    Jeetendra Khadan, Inter-American Development Bank
    Discussant: Ted Loch-Temzelides, Rice University (Slides)
    16.30-17.00Concluding remarks
    Pierre Monnin, Council on Economic Policies

  • – Stefano Battiston, University of Zurich
    – Prakash Loungani, International Monetary Fund
    – Pierre Monnin, Council on Economic Policies
    – Conny Olovsson, Sveriges Riksbank
    – Nicolas Pondard, Bank of England
    – Misa Tanaka, Bank of England