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BOE's Carney says finance 'too slow' on climate change issues

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Financial services have been "too slow" to cut investment in fossil fuels, a delay that could lead to a sharp increase in global temperatures, Bank of England (BoE) governor Mark Carney said in an interview broadcast on Monday.

London

FINANCIAL services have been "too slow" to cut investment in fossil fuels, a delay that could lead to a sharp increase in global temperatures, Bank of England (BoE) governor Mark Carney said in an interview broadcast on Monday.

Mr Carney, due to become the United Nations' special envoy for climate change in 2020 when he steps down from the bank, told BBC radio that global warming could render the assets of many financial companies worthless. Mr Carney cited pension fund analyses that showed the policies of firms pointed to global warming of 3.7 to 3.8 deg C, compared with the 1.5-degree target outlined in the Paris Agreement.

"The concern is whether we will spend another decade doing worthy things but not enough... and we will blow through the 1.5 deg C mark very quickly," he said in a radio programme guest edited by teenage environmental campaigner Greta Thunberg. "As a consequence, the climate will stabilise at the much higher level."

He called on political leaders to effect change today and avoid selective information and spin.

"To deliver, there needs to be shared understanding about what's necessary. It is reasonable for there to be debates at the margin about where does the role of the state stop and what's the role of markets," he said.

He said there would need to be a mix of public investment and change driven by financial markets because of their power to reflect judgments about the future value of assets in a world affected by climate change.

Earlier this month, the BoE said Britain's top banks and insurers should be tested together for the first time in 2021 to quantify the potential financial damage from climate change on their businesses. REUTERS