In particular, well-functioning and more integrated carbon markets are not only cost-effective environmental tools, they also have the potential to foster a more cooperative stance by developing countries by providing new incentives for them to join mitigation efforts and support innovative technologies. Both Italy and the European Union are leaders in pioneering market-based instruments to address climate change.
The BSP will continue to monitor developments as they unfold. Further policy responses will be dependent on how the data evolves. Going forward, the BSP is prepared to use the full range of its monetary instruments and to deploy additional measures, as needed, in fulfilment of its price and financial stability objectives.