Lesetja Kganyago: Climate change and policy coordination - what can central banks do?

Lecture by Mr Lesetja Kganyago, Governor of the South African Reserve Bank, at the Nelson Mandela University, Gqeberha, 19 October 2023.

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

Introduction

Last year's floods in KwaZulu-Natal (KZN) reminded us yet again that climate change is real and can devastate households, businesses and property. Close to 500 people lost their lives and over 4 000 houses were destroyed. At the same time, we saw dams running dry in the Nelson Mandela Bay area, limiting water supply to firms and households. The frequency and severity of extreme events is increasing across the world. Just last month, powerful winds and severe rainfall damaged houses and roads in the Western Cape. Most recently elsewhere, Storm Daniel caused extreme flooding across countries in the Balkans and Mediterranean with over 10 000 people reported missing in Libya, and the city of Derna completely destroyed when the walls of its dams burst. We are rapidly approaching what is being referred to as global climate tipping points, which, once crossed, lead to greater disruptive effects of climate change on our livelihoods.

The bottom line is that we need decisive action to slow rising temperatures. The United Nations Intergovernmental Panel on Climate Change says that achieving the goal of limiting temperature increases to 1.5 degree celsius (°C) requires global greenhouse gas emissions to peak before 2025 and then decline by 43% by 2030. A goal that appears increasingly difficult to achieve.