31 Jul 2019

Mark Carney: ‘Capitalism is part of the solution’ to tackling climate change

Presenter

In an exclusive interview with Channel 4 News, the Governor of the Bank of England said climate change posed both a risk and a ‘huge opportunity’.

The Governor of the Bank of England, Mark Carney, has said that “capitalism is part of the solution” to tackling climate change.

In an exclusive interview with Channel 4 News about climate change, Mr Carney challenged the view of some environmental campaigners that the pursuit of GDP growth is incompatible with tackling climate change.

He told Channel 4 News: “Capitalism is part of the solution and part of what we need to do. Remember what we need to do in going from here to where we need to get to – these are tens of billions, in fact trillions, of pounds of investments that take place in the UK, across Europe across the world.”

He added: “If you flip it around, there is risk but there is huge opportunity. One of the first things we went out and did was to create a framework, a way of providing the right information. Now there is a $120 trillion of capital behind that framework that is saying to companies ‘tell us how you are going to manage these risks’ – that’s the first thing.

“The second thing the capitalist system needs to do is to manage the risks around climate change, be ready for the different speeds of the adjustment.

And then the most important thing is to move capital from where it is today to where it needs to be tomorrow. The system is very much part of the solution.”

Mr Carney said: “Companies that don’t adapt – including companies in the financial system – will go bankrupt without question. [But] there will be great fortunes made along this path aligned with what society wants.”

Mark Carney said the government has told the Bank of England that one of its responsibilities was to look at the risk that climate change posed to the stability of the financial system.

With the UK parliament having legislated for net zero carbon emissions by 2050, the speed of adjustment will mean the bank needs to stress test the financial system to see how ready it is to cope with climate change.

Asked about the lack of international cooperation needed to tackle climate change in an era of trade wars and Brexit, Mr Carney had a clear message: “We have to address the issues, the major issues of our time. So, from our perspective, we have to address the risks”.

Banks, insurance companies and asset managers also had to look at how exposed they were to fossil fuels and petrochemicals, he said, as it was a “mistake” to think the footprint of fossil fuels won’t be reduced.

Channel 4 News interviewed Mr Carney at Coutts Bank on Tuesday evening, where he had been joined by Sir David Attenborough to address an audience of bankers, financiers and city businessmen about the risks and rewards posed by climate change.

Sir David told them the planet and the creatures that inhabited it were in mortal danger and they “simply must act”.