Bank of England hosts ESCB climate research workshop with Slovakia central bank

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ESCB climate research workshop

Highlights

Bank of England and Slovakia central bank hosted the fifth Annual ESCB Climate Change Research Workshop, focusing on economic and financial impacts of climate change.
Research topics discussed included economic costs of extreme weather, carbon-pricing effects on supply chains, and banks' integration of natural-disaster risk into lending decisions.
Workshop emphasized implications of energy transition and green public spending for growth, public finances, monetary policy, and financial stability across Europe.

Workshop agenda and research focus

As reported by the Bank of England, the fifth Annual Workshop of the European System of Central Banks Research Cluster on Climate Change brings together central bank researchers to discuss the economic and financial implications of climate change and the transition to a low-carbon economy.

The Research Cluster on Climate Change is one of several research groups set up by the ESCB Heads of Research Committee to strengthen collaboration among central banks on shared policy issues. It serves as a forum for researchers working on climate economics and climate finance to present new work, exchange ideas and receive feedback from peers across institutions.

Research presented at the workshop examines how climate change and the low-carbon transition affect the wider economy and financial system. Topics include the economic costs of extreme weather events, how banks reflect natural-disaster risk in lending decisions, and how carbon pricing passes through supply chains and international trade.

Implications for policy and finance

The programme also considers how the energy transition affects household finances, alongside the role of green public spending and sustainable finance. It further looks at the implications of the transition for growth, public finances and monetary policy.

The event features keynote speeches by Simon Dietz of the London School of Economics and Rick Van der Ploeg of the University of Oxford. Their participation adds an academic perspective to a workshop centered on issues that are becoming increasingly relevant for central bank research and financial stability work across Europe.

Our earlier article on Mario Draghi’s warning about the policy trade-off between inflation control, debt dynamics, and long-term growth highlighted the risk that keeping rates above growth for too long can raise debt burdens and ultimately undermine productive investment. We also noted Draghi’s view that central banks should prioritize price stability while avoiding unnecessary damage to innovation and resilience, with broader EU-level measures needed to support strategic investment.

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