Ignazio Visco: Returns - identifying the opportunity in the transition to net zero

Panel discussion by Mr Ignazio Visco, Governor of the Bank of Italy, at the Launch of the "COP26 Private Finance Agenda" for the 26th UN Climate Change, London, 27 February 2020.

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

Let me thank Governor Carney and the conference organisers for their kind invitation. As you know, the growing use of fossil fuels is pushing greenhouse gas concentrations to levels such that, unless forceful measures are taken, will lead to an increase in the temperature of the planet ranging from 3 to 5 degrees Celsius by the end of this century. These are well beyond the threshold of 1.5 degrees that, if surpassed, would bring potentially catastrophic consequences for the world.

Stopping climate change is first and foremost a responsibility of national governments, the only institutions that can provide the right incentives to allocate capital to "green" investments, levy taxes on carbon emissions, and introduce regulations limiting the amount of permissible emissions. But the challenge is enormous. Overcoming it will require strong efforts by all institutions and individuals.

Given its central role in the allocation of resources, the financial sector can be key in influencing the transition to a zero-emissions economy. Central banks may play their part.