APA-Dakar (Senegal) – Climate risks are certainly an environmental concern, but their effects can compromise the resilience of Africa’s financial system as a whole, according to the governor of the Central Bank of West African States, Jean-Claude Kassi Brou.
By Abdourahmane Diallo
The adverse effects of climate change go beyond the environmental dimension. It can also have an economic impact, slowing economic growth, hampering poverty reduction and undermining food security.
Aware of the importance of the issue, central banks are taking a growing interest. “Climate risks are certainly environmental concerns, but their impact can affect the resilience of our financial system as a whole. That’s why central banks are paying increasing attention to these risks. Central banks have a responsibility to understand, assess and mitigate these risks,” said the Governor of the Central Bank of West African States (BCEAO).
Jean-Claude Kassi Brou was speaking at the Abdou Diouf International Conference Center (CICAD) in Diamniadio, some thirty kilometers from Dakar, where an international conference on “The role of central banks in meeting the challenges of climate change” opened on Tuesday, February 6.”
The BCEAO governor recalled that the commitment of central banks to climate change is “recent.” However, he pointed out that their actions over the past 10 years reflect a growing awareness that climate change can have a significant impact on the financial system and the economy.
The event brings together central bank governors or their high-level representatives, ministers of finance and the environment, chairpersons of West African Economic and Monetary Union (UEMAO) bodies and institutions, experts from regional and international financial institutions, professional associations of UEMAO financial institutions, and structures specialised in the field of climate risks.
The conference, which opening ceremony was chaired by the Prime Minister of Senegal, Amadou Ba, aims to create a framework for reflection and exchange of experiences on climate policies that promote a better contribution of the financial sector to the objectives of climate resilience and transition to a sustainable economy for states.
Kassi Brou stressed the need for sustained international cooperation to meet this challenge. “The issue of climate change transcends national borders. Tackling it requires sustained international cooperation not only among all central banks, but also with other stakeholders, including governments, financial sector and development partners,” said Mr. Brou.
Senegal’s Prime Minister, Amadou Ba, also emphasised the importance of this cooperation. “This conference should enable us to share experiences and seek innovative solutions to reduce emissions, transition to a greener economy and implement fair and equitable instruments,” he said.
He was also “delighted” to note that African central banks, like those in other regions of the world, recognise the important role they have to play.
“They have a fundamental role to play in promoting policies that will enable the national and regional financial sector to make a greater contribution to the public policies pursued by states in implementing their international financial commitments,” he said.
Four sessions will punctuate the day’s discourses. The first is entitled “Climate change: current thinking and implications for Africa’s economic development.” It aims to present current thinking on climate change and economic development.
The second session will focus on central bank actions to enhance the resilience of the financial system in the face of climate change. The aim of this session is to discuss the implications of climate change for financial stability and the measures taken by central banks to mitigate the risks posed by climate change.
The penultimate session will focus on the contribution of monetary policy in addressing the challenges of climate change. This panel aims to take stock of central banks’ initiatives to integrate the impact of climate change into the conduct of monetary policy. To this end, panelists will be asked to assess the impact of climate change on the conduct of monetary policy by central banks, based on their own experiences.
The fourth and final session will address the question: “From will to action: what approaches to green financing for African economies? The aim is to identify concrete actions taken by financial sector players to mobilize more of the resources needed for green financing in African countries. Innovative techniques and best practices in structuring green finance will be discussed. A roundtable of central bank governors will conclude the discussions.
The lessons learned from this meeting will help to identify the key areas to be covered by an African central bank’s climate change policy.
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