José Manuel Suárez Mier**
The Network of Banks and Banking Supervisors to “Green” the Financial System (NGFS), together with the International Monetary Fund (IMF) and the Bank for International Settlements (BIS), organized last week their conference entitled The Green Swan 2021 to “define the immediate action measures that the financial sector must take to face the risks related to climate change. “
An attempt was made to define practical steps to face, such as creating a common taxonomy on “green” issues, new policies, making public the financial situation of the entities involved, and mobilizing capital markets to face climate change and identify their “carbon footprint. “
The participation of central banks is based on the premise that climate change will foreseeably negatively affect financial stability, for whose integrity they are responsible, which could also be said of wars, and no one entrusts central banks with preventing them.
Some of the means to achieve these ends, according to Banco de México are:
- Promote the evaluation of opportunities and risks related to the environment in the financial sector.
- Encourage the definition and identification of “green” infrastructure, bonds, and loans based on their use of coal and water.
- Create instruments that promote environmentally friendly practices among economic agents.
What central banks intend to do on this issue evokes what many governments did to combat the policy of apartheid (racial segregation) in South Africa through trade blockades that had a devastating impact on its economy and forced change.
It also reminds me of the policies that Banco de México followed for many years to channel credit to “priority” sectors at subsidized interest rates, the so-called “selective credit boxes,” which created a veritable tangle of vested interests, inefficiency, and corruption that it took a lot to eliminate.
Central banks validate the most extreme view of the climate apocalypse that the end of humanity will come in a decade or two, as did the Club of Rome and the Meadows Report of the 1960s based on an “infallible” model from MIT! that excluded the reaction in supply and demand to changes in prices!
It is revealing that the organizers of the Green Swan 2021 have invited to their conference some of the most prominent charlatans who promote climate millenarianism, such as former US Vice President Al Gore, who has gotten rich by scaring the climate “dead man’s duffel bag”*** and Joe Stiglitz, who was a good economist but became a promoter of the most extreme leftist agendas.
By no means do I deny global warming, which is a real problem largely caused by human action, but while the stark figures on climate findings have remained constant over the past two decades, the rhetoric on this topic has been completely unraveled.
It is unfortunate that institutions that used to be the most serious and respectable in the financial arena, such as central banks, the IMF, and the BIS, embrace and design policies based on climate catastrophism.
*In reference to the Black Swan: The Impact of the Very Improbable by Nassim Nicholas Taleb, but applied to climate catastrophism.
**Consultant in economics and strategy in Washington DC and professor at universities in Mexico and the US. Email: aquelarre.economico@gmail.com
***Mexican expression of the 18th century. See http://guadalajara.net/html/tradiciones/01.shtml
This column is also published in Spanish on June 10, 2021, in the Excélsior newspaper, based in México City.