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Archive » March 2026 » Climate change and Central banks: macroeconomic and policy implications

Climate change and Central banks: macroeconomic and policy implications

Leonardo Gambacorta, Livia Pancotto
March 2026 - n. 3
Keywords: Banche centrali, cambiamento climatico, implicazioni macroeconomiche, strumenti analitici
Jel codes: E58, G28, Q54

Climate change is an increasingly important source of macroeconomic and financial risk, with direct implications for the primary objectives of central banks. Physical risks, including increasingly frequent and extreme weather events, can disrupt productive activity, damage infrastructure, and generate supply- and demand-side shocks, with adverse effects on economic activity and inflation dynamics. Transition risks, arising from changes in public policies, technologies and market preferences, may in turn entail short-term economic costs and increase financial volatility, while orderly and credible mitigation strategies tend to support long-term growth. In this context, central banks require more accurate data, appropriate models and innovative tools to assess and integrate climate-related risks into monetary policy, financial stability analysis and their operational frameworks.

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