An executive board member of the ECB tells a Global Solutions Summit panel that current models are “quite deficient” in measuring transition risk
Berlin, May, 27th 2021 – A new conception of economic modelling is needed in the fight against climate change, which has increasingly become a focus for central banks, according to a panel at the Global Solutions Summit.
Isabel Schnabel, executive board member of the European Central Bank (ECB), said that while central bankers were traditionally reluctant to deal with climate change, more interaction with the general public has massively spurred the ECB’s focus on the issue over the past few years.
“We have to ask ourselves whether we are doing what we could and should do with respect to climate change, so this is not just about asset purchases, or not just about lending operations – we have to look at everything and this actually starts with fundamental thinking about economic models,” Schnabel said, adding that the current models are “quite deficient” in measuring transition risk.
A new conception of economic modelling “would be absolutely precious in my view because we know more and more now what does it mean to be net zero by 2050, which was not there even five or ten years ago,” said Laurence Tubiana, chief executive of the European Climate Foundation and a key architect of the Paris Climate Agreement.
Schnabel said the main constraint central banks are facing is that they “cannot do anything which violates our primary mandate of price stability.”
By Sophie Wingate, on behalf of the Global Solutions Initiative
Notes to the Editors
The Global Solutions Summit 2021 will take a hybrid virtual and in-person format due to the Corona pandemic this year. In the studio, which will be set up in-house at the Berlin European School of Management Technology (ESMT), participants from all over the world will be connected with moderators and speakers who will attend in person from the studio. A digital platform will allow all participants not only to follow the presentations and discussions, but also to exchange ideas with other attendees. “The appeal of the physical Summit has always been the ability to meet face-to-face with many like-minded people. It is exceedingly important to us that much of this can also take place in the digital space,” stresses Dennis J. Snower.
The continuously updated program, an overview of the most interesting speakers, and a registration form are available here: https://www.global-solutions-initiative.org/events/summit/summit-2021/
About the Global Solutions Summit
The Global Solutions Summit is held annually by the Global Solutions Initiative, a global think tank network which contributes to greater continuity and impact within G20 policy arenas, by bringing together G20 leaders and leading scientists to find solutions to the world’s great challenges. The Global Solutions Initiative is chaired by Professor Dennis J. Snower, President emeritus of the Kiel Institute for the World Economy. The Global Solutions Summit is a T20-associated event. The T20 is one of the official G20 engagement groups and comprises the most important think tanks of the G20 countries.
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About the Global Solutions Initiative
The Global Solutions Initiative is a global collaborative enterprise that proposes policy responses to major global problems, addressed by the G20, the G7 and other global governance fora. The policy recommendations and strategic visions are generated through a disciplined research program by leading research organizations, elaborated in policy dialogues between researchers, policymakers, business leaders and civil society representatives.