Free Trial

40-Year Supply Due At Testing Time


AUCTION PREVIEW: Nov-32 Indexed Supply Due

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
(MNI) Ottawa

Mark Carney and Janet Yellen co-chaired a report Thursday urging economies to set a "net-zero emissions" goal by 2050 and warned that climate change could bring a 25% hit to global GDP by the end of this century if the world continued on its current path.

The call from two of the most prominent central bankers of the last decade is a strong push for central banks to catch up to the scientific evidence showing climate risks could wipe out banks and energy companies. It could also motivate government action that's frayed since Donald Trump kept the U.S. out of the Paris climate agreement while the ECB pushes tougher fuel standards and China becomes a leading producer of solar panels.

"The scale of the climate challenge is large, the window of opportunity is short, and the risks are existential," the former BOE and BOC Governor Carney said in the report for the Group of Thirty think-tank in Washington.

Current policies are nowhere near enough to prevent the temperature rise of 3 degrees Celsius over preindustrial levels by 2100 that will trigger "severe and irreversible physical damage," the report found. Governments should set up independent panels to guide new policies, providing long-term credibility akin to how central banks tamed inflation, the G30 said.

Carbon prices should "gradually increase over time to incentivize firms and speed the shift to net-zero," said Janet Yellen, G30 co-chair along with Carney and a former Fed chair. Many global carbon prices that are in place range from less than USD10 to USD30 a ton, less than the USD80 needed to prevent the 2 degree temperature rise that could stabilize the climate, the report found.


Governments can start now by tailoring Covid-19 economic restoration packages to a greener economy, the report said. While companies face steep costs if they lag in developing clean technologies and reporting climate exposures to shareholders, "there is no substitute for effective, predictable, and credible public policies," the report said.

Central banks should run regular stress tests, and private financial institutions should also help their clients make the transition to a low-carbon economy, the report said.

Otherwise the world faces more damage from higher sea levels, food insecurity and more heat warnings, and "world gross domestic product (GDP) could be up to 25 percent lower by 2100 due to these impacts," the report said.

Governments could also impose trade duties to ensure nations moving first on climate change don't have domestic companies penalized in global markets, the report said, so long as they comply with WTO trade rules.

While companies face major risks from the phasing out of fossil fuel subsidies and assets made less valuable as carbon is correctly priced, "mainstreaming sustainable investing will help turn an existential risk into the greatest commercial opportunity of our time," said Carney, who is also a special UN climate envoy.

MNI Ottawa Bureau | +1 613-314-9647 |
MNI Ottawa Bureau | +1 613-314-9647 |

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.