Abstract
The global and regional leadership of central banks in response to the COVID-19 pandemic has heightened public and political debates over their role in the governance of an arguably more fundamental planetary crisis: the climate crisis. Strategically harnessing the resources and reach of central banks would seem crucial to achieving a genuine step-change in the governance of the climate crisis. We consider how critical social scientists might contribute to debates over the potential of central banks to act as ‘climate governors of last resort’.
Highlights
Might critical social scientists intervene in the debate over the potential leadership of central banks in climate change governance? Given fresh impetus by last resort governance during the COVID-19 pandemic, many proposals for last resort climate governance are presently circulating in academic, public and policy debates that seek to graft climate-related concerns onto the financial stability mandates and techniques of central banks
For Bundesbank President Jens Weidmann, improving the calculation of climate change risk is primarily a problem for credit rating agencies, who need to invest in widening the scope of their analytical tool kits (Skolimowski, 2019). Regardless of these differences, the approach that all central banks are presently taking to climate change is constituted in the first instance not through climate science, but through a body of expert neoliberal economic knowledge on financial stability and market-based risk management that has developed over the last three decades or so (Morris, 2018)
Attuning critical social scientists to this neoliberal governmental agenda and its accompanying techniques is important in two main respects
Summary
Last resort governanceMore than at any time since the establishment of the Swedish Riksbank in 1668, it would seem appropriate to speak of ‘central-bank-led capitalism’ (Bowman et al, 2012). Honed during the global financial crisis of 2008 by the Fed and BoE in particular (Langley, 2015), asset purchase and quantitative easing (QE) techniques, resourced by monopoly over fiat money issuance, have become crucial to central bank capacities to fulfil their broadened financial stability mandates.
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