Bank of England head rebuts critics of his global warming remarks

By Randall Palmer
LIMA, Oct 8 (Reuters) - Bank of England Governor Mark Carney
struck back on Thursday at critics of his recent remarks about
the effect of climate change, saying it has real effects on the
insurance industry, which the central bank regulates.
He said the Group of 20 leading industrialized nations had
this year asked the Financial Stability Board, which coordinates
financial regulation of the G20 and which Carney chairs, to
produce an assessment of the implications of climate change for
financial stability.
"One thing we don't like as central bankers, as people
responsible for financial stability and as participants in an
economy is (a) jump to distress, abrupt changes, and we can
avoid those with better information," Carney said.
Carney delivered a speech on the issue last week to a
Lloyd's of London insurance market event urn:newsml:reuters.com:*:nL5N11Z4GL, and was
slammed afterward for overstepping his mandate at a time when
central banks are struggling to reignite growth and raise
inflation.
Carney was asked about the issue at a seminar in Lima on
Thursday at the meeting of the International Monetary Fund, and
he raised it again at a panel discussion two hours later.
Carney says that in addition to the physical costs the
insurance industry faces due to extreme weather, there is
insufficient information about the effects climate change could
have on investment.
He has referred to "stranded assets," the concept that
carbon-rich deposits like coal and oil might lose their value if
the world shifts away from carbon.
He said it was a "market failure" that there is not
information about carbon effects of trillions and trillions of
dollars of potential investments.
More such information would help smooth the transition to a
world that uses less carbon, which would be good for financial
stability, he said.