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Financial Regulation, Climate Change, and the Transition to a Low-Carbon Economy: A Survey of the Issues
Author:
Mr. Dimitri G Demekas
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and
Pierpaolo Grippa
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 296
Language:
English
Publication Date:
17 Dec 2021
DOI:
https://doi.org/10.5089/9781616356521.001
ISBN:
9781616356521
ISSN:
1018-5941
Pages:
45
Keywords:
Financial stability; financial regulation; climate change; climate mitigation policy; low-carbon economy; energy transition; carbon price; green finance; United Nations climate change conference; policy coordination; unintended consequence; Climate change; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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There are demands on central banks and financial regulators to take on new responsibilities for supporting the transition to a low-carbon economy. Regulators can indeed facilitate the reorientation of financial flows necessary for the transition. But their powers should not be overestimated. Their diagnostic and policy toolkits are still in their infancy. They cannot (and should not) expand their mandate unilaterally. Taking on these new responsibilities can also have potential pitfalls and unintended consequences. Ultimately, financial regulators cannot deliver a low-carbon economy by themselves and should not risk being caught again in the role of ‘the only game in town.’
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund