City Week – London, 24 April 2023 The role of central banks in the “macroeconomics of climate change”  Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 sur 8 Ladies and Gentlemen, It is once more a great pleasure and honour for me to give a keynote speech today at the City Week in London, held in the venerable Guildhall. It is no longer possible to seriously question the severe effects of climate change, but the role of central banks in this area has become an increasing focus of discussion. Let me start by two very great temptations that have become typical pitfalls here. Neither magic wand, nor ostrich policies We could call the first of these the « magic wand temptation » in which central banks are seen as being able to curb climate change on their own. I want to be crystal clear on this: central banks cannot be the only green game in town, they cannot replace sound public policies and corporate transition plans. One necessary step for public policies is to put a price on carbon: it is the only signal capable of aligning climate imperatives with economic agents’ decisions. It is the only way to make more green projects profitable; and green finance without enough green projects risks running idle.
As oil and gas production gradually dwindles, Norway’s petroleum wealth will continue to generate profits in the form of income from the fund. Chart: Per capita GDP. Norway and other countries – 1970 and 2015 The discovery of oil marked the beginning of an extraordinary era for the Norwegian economy. Before oil was discovered, the income level in Norway was low compared with other western countries. Today, the picture has been reversed. We have gradually caught up with the wealthiest countries. Norway’s GDP per capita is one of the highest in the world. Chart: The 1000-krone banknote (The Ocean Wave) For over a thousand years, the sea has been the source of our wealth and the basis of our contact with the rest of the world. New industries and new technology are redefining our coastal and maritime economy. When the Norwegian economy has been hit by waves, we have used the force of those waves to move forward. And we will continue to do so in the years ahead. The shipping industry is one of the world’s most advanced in terms of developing energy-efficient vessels. The pharmaceutical industry is conducting research into the effect of marine-derived products on a variety of diseases. Wind and wave power will be sources of clean and renewable energy. At the same time, climate change and the loss of biodiversity present challenges that must be met. A continued commitment to maritime and marine research in the years ahead will be an important contribution to maintaining sustainable development.