1. Climate change and the role of central banks
Hiona Balfoussia
Department of Economic Analysis & Research
Bank of Greece

2. Top 5 global risks in terms of impact
Source:

3. Climate Change Impacts Study Committee (CCISC)
Set up in 2009 by the Bank of Greece, to study the economic, social and environmental impact of climate change in Greece.
Has published two main reports:
“The environmental, economic and social impacts of climate change in Greece”, 2011
“Greek tourism and climate change: adaptation policies and a new growth strategy”, 2014
In 2015 drafted the Climate Change National Adaptation Strategy for the Greek Ministry of Environment and Energy
Currently studying the implications of climate change for the conduct of monetary policy and the role of Central Banks

4. The cost of climate change
Scenario cost comparison
(in billion Euros)
2011 – 2100
cost saving compared to inaction
0% discount rate
2% discount rate
inaction
€701
€202
adaptation
total cost
€578
€123
€177
€24
adaptation measures
€67
€28
other impacts
€510
€149
mitigation
€436
€265
€156
€46
mitigation measures
€142
€73
€294
€83
* Total cumulative costs at 2008 constant prices, expressed as a loss of GDP relative to base year 2008, Source: CCISC (2011), The environmental, economic and social impacts of climate change in Greece, Bank of Greece, p.377

5. The cost of climate change
Areas of vulnerability:
agriculture
tourism
coastal systems
water reserves
Potentially major consequences on household income and the economy as a whole.

6. Climate Change National Adaptation Strategy
Drafted under a Memorandum of Cooperation between the Bank of Greece, the Greek Ministry of Environment and Energy and the Academy of Athens.
Sets out the general objectives, guiding principles and implementation tools of an effective and growth- oriented adaptation strategy.
The first step of a continuous and flexible process for planning and implementing the necessary adjustment measures at national, regional and local levels.

7. Climate change and the conduct of monetary policy
CCISC currently undertaking a study on the implications of climate change for the conduct of monetary policy and the role of Central Banks
As a result of climate change:
macroeconomic developments could become less stable
economic growth could fluctuate considerably
Monetary policymaking rendered more challenging.
Environmental risks expected to affect Central Banks’ objectives and actions.

8. Climate change and the conduct of monetary policy
Climate change constitutes a systemic risk factor for the economy and the financial sector
Potential impact on degree of economic uncertainty
Direct consequences for price stability through:
food prices
energy prices

9. Climate change and the conduct of monetary policy
Two main types of risk are identified:
Transition risk:
environmental regulation affects carbon-intensive businesses
established technologies become redundant
Physical risk of extreme weather events:
direct effects (e.g. damage to property)
indirect effects (e.g. resource scarcity)

10. Climate change and the conduct of monetary policy
Sensible to try to incorporate environmental risks in central banks’ financial stability and macroprudential policy frameworks:
Variations of existing policy tools could potentially influence investment decisions towards green investments
Financial institutions could be encouraged to consider climate and environmental risks in their operations

11. The CCISC on the web Thank you!
CCISC webpage (shortcut banner on the homepage
for more information please contact us at: