Tribune. The European Central Bank (ECB) took a historic step on July 8 by announcing, for the first time, the integration of climate change into its monetary policy. It is no coincidence that ECB President Christine Largarde has said that climate change will be “Now at the heart of [leur] strategy “. From this year, climate change will influence assessments of monetary policy and its operational framework.
Long criticized for its obsession with inflation, the European institution is therefore wrong to its detractors. In a way, this is just the continuation of ten years of unconventional monetary policy. Indeed, the new strategy of the ECB comes first and foremost to seal the end of monetary orthodoxy. But, when it comes to the climate, these announcements carry with them the admission that the economy does not evolve like a bubble impermeable to the profound changes in our societies, whether social or environmental.
The work of the Intergovernmental Panel on Climate Change, like that of more recent economic and financial research, suggests that, whatever the climate trajectory, we are on the cusp of a radical transformation of the climate. our savings. This transformation cannot materialize without consequences for price stability, primarily the prices of raw materials and energy, which are already highly volatile.
Global consideration of major funders
This recognition of the importance of climate change is not unique to the ECB, but corresponds to a profound change in mentalities within central banks. From the Federal Reserve to the Bank of England, from the Central Bank of Brazil to the People’s Bank of China, climate change is increasingly openly accepted by big money-makers as a major challenge for the global economy, affecting monetary policy objectives.
In addition, integrating climate issues into monetary policy is fully in line with the ECB’s mandate under the Treaties. This mandate has never been confined to price stability alone but also requires, since the Maastricht Treaty, the support of monetary policy to economic policies, in order to contribute to the achievement of the EU’s objectives. The protection of the environment is one of these objectives. Between two measures of equivalent effect for price stability, the European institution has thus undertaken to choose the measure most favorable to the environment.
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