Climate activists are warning that central banks are playing a “risky gamble” with their strategies for addressing the financial risks from global warming.
According to a study by Oil Change International and Reclaim Finance, “The scenarios being used to guide the transition to a carbon-neutral economy are biased toward temperatures that are too high and fossil-fuel phase-outs that are too slow.”
Such downplaying of the speed and depth of the necessary energy shift risks perpetuating the status quo for use of fossil fuels, the lobby groups said Monday.
The warning is based on scenarios by the Network for Greening the Financial System, a group of 83 central banks and supervisors from around the world. In a paper published last June, the NGFS focused its analysis on limiting temperature increases to 2 degrees Celsius compared to the pre-industrial age.
The Paris Agreement, the international treaty on combating climate change, calls on nations to hold the global average temperature increase to “well below 2 degrees” and preferably 1.5 degrees. The NGFS includes 1.5 degrees only as an “alternate” scenario.
The presidency of the COP26 climate summit — to be held in Glasgow, Scotland, in November — already declared embedding the NGFS analysis in the financial sector as one of its goals.