This holds true for several reasons.
First, climate change will be an important influence on macroeconomic outcomes in the coming decades: both directly through weather shocks and the shift towards low-carbon technologies, and indirectly through its impact on the evolving expectations of households and firms about the future trajectory of the economy.i Second, although this is not the base case, I will argue later in this lecture that financial stability is threatened if we ignore the systemic risks associated with climate change.