The E-axes Forum on Climate Change, Macroeconomics, and Finance

Policy Briefs

Illuminating Current Debates on Climate through Academic Insight: The Policy Brief Series

Drafted by economists who have shared their latest research in our Young Scholars’ webinar series, the Policy Briefs analyze key debates related to addressing climate change. The authors apply their expertise to elucidate the intricacies of reducing greenhouse gas emissions (“mitigation”) and adapting to current and expected climate impacts. By contextualizing recent scientific findings within policy conversations, the series illuminates evidence-based pathways for climate action. Both timely and thoughtful, the Policy Briefs aim to elevate discussions beyond rhetoric to the substantive domain of academic research.

Climate stress tests were built to assess climate systemic risk in the financial system. They demand resources from supervisors and banks alike, but are proving useful to inform macroprudential policies.
Climate change has a destabilizing effect on financial markets. If market actors become overexposed to climate-sensitive assets, the ensuing market failure provides justification for central bank intervention to prevent cascading financial effects.
To secure price stability and fulfill their primary mandate, policymakers should act promptly: interest rate management, expectation anchoring, financial stabilization, cooperation with fiscal authorities are just some of the tools at their disposal.

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