BoC PLANNING NEW TOOLS TO BETTER ASSESS CLIMATE CHANGE'S IMPACT ON THE ECONOMY
Nov 03, 2021
By Bob Komsic
Canada’s central bank says it’ll come up with new models and data sources to better understand how global warming is affecting our economy.
The Bank of Canada also pledges to include these findings in its quarterly forecasts to help markets evaluate risks.
The central bank intends to assess how more frequent severe weather events and the transition to low-carbon growth affect potential output, the job market and inflation.
In a statement tied to the UN global climate conference in Scotland, it says increases in the frequency and severity of extreme weather events, along with the move to lower emissions pose significant risks to Canada’s financial system and the bank will aim to help markets price those risks.
Meanwhile, BoC Deputy Governor Toni Gravelle says the steps required to mitigate the effects of climate change would lead to massive restructuring and the risk that some parts of the economy would contract.