A future climate disaster, or “green swan” event, could bring down the global financial system, according to a new report from the Bank for International Settlements (BIS), an international financial organization that serves as a bank for central banks around the world.

Like black swan events, “green swan” events will be very difficult to predict and will hit with little warning. The potential for a cascading series of crises stemming from climate change threatens global financial stability, and the world’s central banks are not equipped to respond to them, or even predict what exactly might unfold, the 100-page BIS report said.

Risk in the Time of Climate Change

The financial risk from climate change is typically put into two categories: physical risk and transition risk. The former refers to natural disasters or some other climate-related calamity that imposes steep costs on society from physical damage, such as a drought or a hurricane.

Transition risk refers to the repricing of assets as the global economy shifts towards cleaner energy, such as an oil company losing much of its value following the passage of a painful carbon tax.

https://www.desmogblog.com/2020/01/31/green-swan-central-banks-financial-crisis-climate-change

By Andrea Germanos, Common Dreams. Originally published on Common Dreams under CC BY-SA 3.0 US.

Climate campaigners drew attention to CNBC’s Jim Cramer’s comments on Friday, January 31 that he’s “done with fossil fuels” because they’re “in the death knell phase.”

Cramer added that “the world’s turned on” the industry as they did with tobacco.

“They’re done,” Cramer said of fossil fuels on the network’s “Squawk Box.” “We’re starting to see divestment all over the world. We’re starting to see … big pension funds saying, ‘We not going to own them anymore.”

“The world’s changed,” Cramer continued. While companies like BP still mark profits, “nobody cares,” because “new money managers want to appease younger people who believe that you can’t ever make a fossil fuel company sustainable.”

“You can tell that the world’s turned on them, and it’s actually kind of happening very quickly,” said Cramer. “You’re seeing divestiture by a lot of different funds. It’s going to be a parade … that says look, ‘These are tobacco, and we’re not going to own them.’”

https://www.desmogblog.com/2020/02/01/cnbc-jim-cramer-fossil-fuel-industry-death-knell-phase