Ignazio Visco: Sustainable development and climate risks - the role of central banks

Speech by Mr Ignazio Visco, Governor of the Bank of Italy, at the session "Finance and financial systems for sustainable development", at the conference "Make Europe the world champion of sustainable development", Sustainable Development Festival 2019, organized by the Italian Alliance for Sustainable Development (Alleanza Italiana per lo Sviluppo Sostenibile - ASviS), Rome, 21 May 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The question of whether natural resources and the development objectives of nations are compatible is an issue that has long been debated in the field of economics. It dates back to at least the end of the 18th century with the works of Thomas Malthus on food supply and population growth and has re-emerged a number of times since then in the public debate.

For example, at the start of the 1970s, in the wake of the demographic explosion and the related exponential growth in consumption, the simulations produced for the project of the Club of Rome on the 'Predicament of Mankind' set off an alarm which resonated strongly at international level concerning the risks to the survival of our ecosystems and of the human race itself. It was then observed that the scarcity of natural resources envisioned in that analysis, largely based on a linear extrapolation of the trend under way, did not take sufficient account of two fundamental mechanisms that regulate the functioning of the economic system: the rebalancing capacity of prices and the endogenous nature of technological change.