Luohan's Academic Committee member Dr. Lars Peter Hansen, Professor of Economics at the University of Chicago and Nobel Laureate, recently published in the Journal of Monetary Economics a paper titled “Central Banking Challenges Posed by Uncertain Climate Change and Natural Disasters” where he discusses the limits central banks face in using monetary policy and regulatory powers to address climate change.
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"Don’t Rely on Central Banks to Fight Climate Change"
Chicago Booth Review (October 18, 2021)
https://www.chicagobooth.edu/review/dont-rely-central-banks-fight-climate-change
"Central banks lack tools to fight climate change - Nobel laureate"
Reuters (October 8, 2021)
https://www.reuters.com/business/finance/central-banks-lack-tools-fight-climate-change-nobel-laureate-2021-10-05/
Abstract
Climate change poses an important policy challenge for governments around the world. The challenge is made all that much more difficult because of the multitude of potential policymakers involved in setting the policy worldwide. What then should be the role of central banks? How are climate change concerns similar to or distinct from those of other natural disasters? Clarity of ambition and execution will help to ensure that central banks maintain credibility. By adhering to their mandated roles, they retain their critically important distance from the political arena. Their credibility will be further enhanced by avoiding the temptation to exaggerate our understanding of climate change.
