The Observer view on climate change Observer editorial
Mark Carney calls it the Tragedy of the Horizon: the chronic inability of Britain’s leaders, whether in business or politics, to tackle challenges that extend more than a few years ahead. There are plenty of examples, from the shameful failure to build enough homes to the indecision about whether, and where, to add to airport capacity. But climate change is the ultimate example: it presents an existential threat to the status quo, yet it barely features in the day-to-day calculations of many business and policymakers. It’s too big, too scary and, most of all, too distant, to start planning for.
The governor of the Bank of England was castigated by some last week for offering doom-laden prognostications about global warming’s potential impact, straying into territory more commonly occupied by the Green party than financial technocrats. Some in the City believe the spirit of buccaneering free enterprise and the inexorable advance of innovation will eventually meet the challenges of climate change head on, as evidence mounts of its potential costs. Yet as Carney pointed out, threats often take financial markets by surprise, even when they should have been foreseeable. Volkswagen’s flagrant fiddling of vehicle emissions tests surely scotches the idea that big business will get to grips with the problem of its own accord.
Carney is correct that if climate change catches investors unawares it could present a major threat to financial stability and he should be commended for raising the issue. His relatively modest starting point – a climate disclosure task force, to determine how companies should make public their potential vulnerability to climate change – is a sensible one, but it may not go far enough.
If he is right that what is required to equip Britain for the future is a “technological revolution”, the government may have to step in and marshal the financial and technological resources necessary, even if it means thinking far beyond the next election. Making much more information available, as he suggests, must only be the beginning.