Climate change and climate action have indeed been attracting growing public attention of late. One thing is clear: climate action is a matter for elected governments and parliaments. They have the right tools at their disposal, such as taxes on CO2 emissions or emissions trading. And they have the necessary democratic legitimacy to use them.
But it’s equally clear to me that central banks can and should do more about climate change than they have up to now. Climate change and climate action can have economic repercussions that are relevant to maintaining price stability. Monetary policymakers must factor this into their analyses. Central banks are often just setting out on this journey.