Dr Guy Debelle, Deputy Governor of the Reserve Bank of Australia, addressed a public forum on climate change and the economy hosted by the Centre for Policy Development on 12 March 2019.
The speech examined how climate change could impact economic growth, inflation and monetary policy.
Dr Debelle’s speech was the third in a CPD series, hosted by MinterEllison Lawyers, that has included statements on climate change by Geoff Summerhayes from ARPA (2017), John Price from ASIC (2018). It was the first time a senior official from the RBA has given a dedicated speech about climate change and the economy.
The economy is changing all the time in response to a large number of forces. But few of these forces have the scale, persistence and systemic risk of climate change Dr Guy Debelle Deputy Governor, Reserve Bank of Australia
The economy is changing all the time in response to a large number of forces. But few of these forces have the scale, persistence and systemic risk of climate change
Dr Guy Debelle
Deputy Governor, Reserve Bank of Australia
Dr Guy Debelle’s speech on climate change and the economy marked the first time that a senior Reserve Bank of Australia official had addressed climate change in their public statements
In his remarks, titled Climate change and the economy, Dr Debelle said that “both the physical impact of climate change and the transition are likely to have first-order economic effects.”
Dr Debelle’s speech emphasised that climate change is a trend change — not a cycle that will wax and wane.
He said climate could have major consequences for financial stability, especially if key transitions are disorderly or abrupt.
Dr Debelle strongly endorsed the need for businesses to implement the recommendations of the Task Force for Climate-related Financial Disclosures, emphasising the important role of scenario analysis.
Following his remarks, Dr Debelle was joined for a panel discussion by Kate Mackenzie (European Climate Foundation), Blair Comley PSM (former Secretary of the Department of Climate Change and Energy Efficiency) and Katharine Tapley (Head of Sustainable Finance, ANZ).
The panel warmly welcomed Dr Debelle’s speech. Katharine Tapley described it as a ‘waymarker’, stressed how climate change is high up on her clients’ concerns and affirmed the rapid growth of green finance.
Blair Comley highlighted the importance of government policy, and of information provision and access.
Kate Mackenzie stressed the limits to the remaining time window for action and touched on the implications of climate change on the housing market.
The panel discussion was moderated by Centre for Policy Development Policy Director Sam Hurley and accommodated several questions from the audience, including from Laura Tingle (ABC 7.30), Peter Hannam (Sydney Morning Herald) and Emma Herd (Investor Group on Climate Change).
The final question of the night came from Susan Moylan-Coombs, the granddaughter of the first Governor of the Reserve Bank of Australia, Herbert Cole “Nugget” Coombs.
The Reserve Bank’s intervention is another crucial step on climate change by Australia’s leading financial and economic regulators, following earlier public statements by APRA and ASIC, hosted by the Centre for Policy Development in 2017 and 2018 respectively, on how climate change could affect profitability, financial system stability and corporate governance.
Dr Debelle was introduced by CPD’s CEO, Travers McLeod who highlighted other pivotal speeches on the issue by regulators and central banks in recent years, starting with Mark Carney, Governor of the Bank of England, who described climate change as the ‘tragedy of the horizon’ in September 2015.
Until then, company boards and financial market regulators had given climate change little attention.
Travers acknowledged other people and organisations central to lifting ambition on climate change, some of whom attended the forum, such as Emma Herd from the Investor Group on Climate Change, Ian Learmonth from the Clean Energy Finance Corporation, David Atkin from Cbus and Zoe Whitton from Citi Australia.
