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Navigating the green transition: Can central banks pick up the slack?

Bhavya Gupta and Ramkishen S Rajan
Published Fri, Nov 24, 2023 · 05:00 AM

A RECENTLY released United Nations report reveals stark findings of the planet warming as high as 2.8 degrees Celsius above pre-industrial levels and only a 14 per cent chance of keeping the global temperature rise below the 1.5 deg C target with the current net-zero commitments. Against this backdrop, a flurry of climate news – both good and bad – continues to dominate global headlines.

On the one hand, political leaders are indulging in grand climate proclamations and partnerships to accelerate renewable energy adoption and/or phase out fossil fuels. On the sidelines of the recent Asia-Pacific Economic Cooperation summit in San Francisco, the world’s two biggest carbon emitters – China and the United States – announced the Sunnylands Statement on wide-ranging climate cooperation, including agreements to curb methane and nitrous oxide emissions and steps to tackle plastic pollution.

On the other, domestic electoral dynamics and voter discontent with the costly impact of wide-ranging climate ambitions on everyday life have dampened – or in some cases even reversed – policy interventions to achieve the net-zero target by 2050. This has been most evidently on display in several European countries whose governments rolled back or phased down stringent green energy policies imposed on households and businesses in response to growing domestic opposition to these measures.

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