ECB’s Makhlouf: Mitigation Measures Key to Orderly Green Transition

15 May 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Wednesday said that the effort towards a green transition must include risk forecasting and mitigation of the effects of climate-related events.

In a speech at the EPA Annual Climate Chance Conference in Dublin, the text of which was posted on the website of the Central Bank of Ireland, which he heads, Makhlouf said, ‘A focus on mitigation continues to be essential: an orderly transition is far preferable to alternative scenarios of doing nothing or doing too little too late.’

The consequences of climate change were strongly felt by households and business and therefore had a direct impact on the financial sector and in the economy, he said.

‘Climate change is affecting the economy, and it is affecting the capacity of central banks across the world to meet their objectives of maintaining price and financial stability and to support broader economic policies’, he said.

It was necessary to forecast risks, since it was certain that the ‘frequency and severity of weather and climate-related damages will increase over the next forty or so years’, he said.

‘Central banks have a responsibility to monitor and forecast these risks, and then to act to maintain financial stability’, he said.