RBI Green Challenge

RBI Green Challenge

Context:

While the world is coping with the impact of legacy emissions, the pressure is increasing to achieve climate-compatible growth. The central bank has to be cognizant of the feedback from climate change and make a suitable policy change.

Imminent Risks:

• Risk to financial system: It is known to all that the exposure of assets to extreme weather events and loss of asset value due to a green transition are risks to the financial system.
• Threat to stability: Climate change is a significant threat to financial stability and a central bank that does not address climate risk is “failing to do its job”.