New tool tracks monetary and financial climate policy

September 2, 2021|Written by

A new interactive tool tracking climate-related monetary and financial policies in 30 countries has been launched by the E-axes Forum, an independent research organisation focusing on macroeconomic policies and sustainability. The Green Monetary and Financial Policies (GMFP) Tracker shares policy developments from central banks and financial regulators in real time. It is launched alongside a second tracker following emerging academic literature on climate change, macroeconomics and finance.

The GMFP Tracker maps the global landscape of monetary and financial policies aimed at mitigating climate risk, organising policy developments related to climate change into three main categories: monetary policies, financial policies and ‘additional’. Monetary policies tracked include policies related to collateral frameworks, credit operations, and domestic and foreign asset purchases. Financial policies covered include developments in credit guidance, prudential and supervisory practices, and a catch-all “additional” category covers changes in central bank mandates and the management of their own funds.

Policies can be filtered by country, policy category and G20 or Network for Greening the Financial System (NGFS) membership, and a map view can be used to compare the number of enacted policies across jurisdictions.

A separate tool launched concurrently tracks ‘Literature on Climate, Macroeconomics and Finance’ (LitCMF), offering a structured taxonomy of the literature on climate economics and finance. A classification tree divides related research and academic papers between those that seek to understand climate risk and those that seek to manage and mitigate it, and a variety of sub-categories are used, including conceptual frameworks, physical climate risk, transition risk, institutional analysis and modeling. Like the GMFP Tracker, the LitCMF Tracker will be updated as developments occur.

Speaking at an online launch event on Tuesday, Pierre Monnin, Senior Fellow at the Council on Economic, emphasised the financial system’s increasing focus on climate change. “There is currently no central bank not talking about it. The E-axes Forum is a vivid example of the interest of policy makers and researchers in these issues,” he said.

“Policy is currently ahead of academia,” said Oxford University Economics Professor Rick van der Ploeg. “Effective policy interventions by supervisors need good, granular data and these are currently lacking,” he said. “We also need to increase our theoretical understanding of climate change’s impact on the financial system and vice-versa to improve existing models.”

Both tools will be expanded and developed over time to cover more countries and policy areas. All material is freely available to use under creative commons license.

This page was last updated September 2, 2021

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