While Western central banks such as the Bank of England, the European Central Bank and the US Federal Reserve often talk about the dangers of climate change, new research has shown that China’s central bank is the only one that has actually taken major, concrete steps to shift money toward green industries.
The findings come from an in-depth project led by Dr James Jackson from The University of Manchester and Mathias Larsen from London School of Economics (LSE).
Their research - which has been published by LSE’s Grantham Research Institute - involved 93 interviews across China’s financial system, including with staff inside the People’s Bank of China (PBoC), the country’s central bank.
Their conclusion is striking: China’s central bank isn’t independent from its government, and this may be the key reason it has been able to act faster and more boldly on climate change than its Western counterparts.
“There’s a common belief that central banks should stay out of politics and focus only on inflation. But climate change affects everything including food prices, energy bills and economic stability,” said Dr Jackson.