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The confirmation that 2024 was the hottest year on record along with the wildfires in Los Angeles increases pressure on central banks and regulators to take urgent action against climate change, experts said.
“2024 was recently confirmed as the hottest year on record and severe weather events are becoming tragically frequent,” said Lydia Marsden, a research fellow at University College London’s Institute for Innovation and Public Purpose. “Central bankers need to start moving towards green policy implementation based on the information they have today.”
The World Meteorological Organization (WMO) confirmed that 2024 was the warmest year on record, with a global mean temperature of more than 1.5°C above the 1850-1900 average. That is the threshold set down in the Paris Agreement, but the WMO noted that the agreement sets long-term temperature goals and one year of more than 1.5°C does not mean that it has been breached just yet.
“Climate history is playing out before our eyes,” said WMO Secretary-General Celeste Saulo. “Every fraction of a degree of warming matters. Whether it is at a level below or above 1.5°C of warming, every additional increment of global warming increases the impacts on our lives, economies and our planet.”
Natural disasters caused global losses of US$320bn in 2024, up from $268 bn in 2023, of which around US$ 140bn were insured, making it the third most expensive year for insurers on record, according to reinsurer MunichRe.
“One record-breaking high after another – the consequences are devastating. The destructive forces of climate change are becoming increasingly evident,” said MunichRe board member Thomas Blunck.
Fires that have swept across southern California this month have already caused damage and economic loss of between $250bn and $275bn, according to private forecaster AccuWeather.
“The climate breakdown is a collective issue that we’re all facing,” said British economist Ann Pettifor. “Los Angeles is the consequence of forces operating across the globe and until we accept that, we’re not going to be able to accept the need to share the risk across the board and to have collective ownership of the risk. That is best expressed through the central bank.”
Central banks should stop focusing on collecting more information about climate risks and start serious global coordination to take action to mitigate climate shocks, according to Marsden.
“Precautionary and proactive action now is essential to support macro-financial stability as we move towards a world characterised by more environmental shocks,” she said.
This page was last updated January 19, 2025
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Emma Thomasson is a British journalist, consultant and trainer based in Berlin. She is an expert in economics, politics, business and technology. She previously worked for Reuters as a correspondent and bureau chief in Germany, Switzerland, the Netherlands, South Africa and the UK.
