But sustained, concerted, and effective coordination over many years to come. Physical risks While climate change is highly unusual as a source of risk to the financial system, recent efforts mean that there is a growing consensus over the channels through which climate change can affect the financial sector9. Broadly, there are two categories of risks. First, ‘physical risks’ and second so-called ‘transition risks’.
All these are part of prudent macroeconomic management that will aim to (1) contain inflation rate at an acceptable or tolerable level and (2) minimise the effects of “Dutch Disease” on industries that will not directly benefit from the LNG project.