{"id":12532,"date":"2019-09-29T15:16:12","date_gmt":"2019-09-29T13:16:12","guid":{"rendered":"http:\/\/www.clgj9277.odns.fr\/the-tragedy-of-the-horizon\/"},"modified":"2023-11-23T11:57:00","modified_gmt":"2023-11-23T09:57:00","slug":"the-tragedy-of-the-horizon","status":"publish","type":"post","link":"https:\/\/anaxis-am.com\/de\/the-tragedy-of-the-horizon\/","title":{"rendered":"The tragedy of the horizon"},"content":{"rendered":"\n

Four years ago, on September 29, 2015, Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board (FSB), delivered a keynote speech to Lloyd\u2019s of London. In it he spoke of the need to move beyond the \u201ctragedy of the horizons\u201d and outlined the three types of risk that the financial world will face. The following are excerpts from the speech, the full text of which is available on the Bank of England website<\/em>.<\/p>\n\n

(https:\/\/www.bankofengland.co.uk\/-\/media\/boe\/files\/speech\/2015\/breaking-the-tragedy-of-the-horizon-climate-change-and-financial-stability.pdf<\/mark><\/a>)<\/em><\/p>\n\n

While there is always room for scientific disagreement about climate change (as there is with any scientific issue) I have found that insurers are amongst the most determined advocates for tackling it sooner rather than later. And little wonder. While others have been debating the theory, you have been dealing with the reality: since the 1980s the number of registered weather-related loss events has tripled; and inflation-adjusted insurance losses from these events have increased from an annual average of around $10bn in the 1980s to around $50bn over the past decade. The challenges currently posed by climate change pale in significance compared with what might come. The far-sighted amongst you are anticipating broader global impacts on property, migration and political stability, as well as food and water security.<\/p>\n\n

\u2026<\/p>\n\n

Climate change is the Tragedy of the Horizon. We don\u2019t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors \u2013 imposing a cost on future generations that the current generation has no direct incentive to fix. That means beyond the business cycle, beyond the political cycle and beyond the horizon of technocratic authorities, like central banks, who are bound by their mandates. The horizon for monetary policy extends out to 2-3 years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle \u2013 about a decade. In other words, once climate change becomes a defining issue for financial stability, it may already be too late.<\/p>\n\n

\u2026<\/p>\n\n

There are three broad channels through which climate change can affect financial stability: <\/p>\n\n