The rise in demand for coal following Russia’s invasion of Ukraine is a setback to reaching a net-zero economic system by 2050 however may even assist bolster funding in renewable vitality, a Financial institution of England (BoE) policymaker stated on Tuesday.
Elisabeth Stheeman, a member of the BoE’s Monetary Coverage Committee (FPC), stated the impression on the transition to internet zero of the rise in vitality costs, because of Russia’s invasion of Ukraine, was but to be decided.
“Current occasions have highlighted the transition dangers that companies face,” Stheeman stated in a speech.
“In mild of this example, the position for central banks and supervisors is to proceed to assist construct resilience to climate-related monetary dangers, and in doing to allow them to additionally assist help the transition,” she added.
The Financial institution has performed a “local weather situation” train to evaluate the resiliency of banks, insurers and the broader monetary system to completely different climate-related dangers.
Aggregated outcomes can be revealed on Could 24.
“The train shouldn’t be supposed to tell the setting of capital necessities,” Stheeman stated.
“The FPC may even use it to know threat administration capabilities within the monetary sector, and the way banks and insurers might adapt their enterprise fashions within the face of various local weather pathways,” she added.
(Reporting by Huw Jones; modifying by Alex Richardson and Mark Potter)
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