<
https://www.theguardian.com/business/2026/aug/01/ecb-climate-wildfires-global-economy-stability>
"A senior policymaker at the European Central Bank has said the climate
emergency and the breakdown of nature poses a dramatically growing risk to the
global economy.
Frank Elderson, a member of the ECB’s executive board, said the eurozone lender
of last resort was stepping up its monitoring of the financial risks linked to
the destruction of “ecosystem services”, which are nature-related processes or
assets that support human activity.
“These services are not stable but they are in rapid decline. That’s why we
talk about the climate and nature crises,” he said. “So knowing that
dependency, and knowing those exposures by the banks, we come to the conclusion
that this is relevant.”
Across France and Spain, wildfires have raged amid record-breaking
temperatures, torching land, businesses and homes, in an emergency that will
carry a heavy economic cost beside the direct human toll.
In an interview with the
Guardian before the current devastation across
Europe, Elderson said it was clear the rising frequency of natural disasters
linked to global heating posed a threat to financial stability.
He said more work needed to be done to assess the risk from the collapse of
ecosystem services, as reliance on nature was more complicated to map than the
impact of a single extreme weather event.
Ecosystem services are defined as any benefit that can be drawn from a natural
structure or process – for example, water can be used as a raw material, an
energy source through hydropower, or for transportation. It is also a habitat
for marine life critical for food production, and a basis for recreational
services.
“Nature-related risks can pose material economic and financial risks, including
through their impacts on credit risk, growth, inflation and – over the
long-term – potential financial instability,” Elderson said.
“I did interviews [previously] saying, you know, if you destroy nature, you
destroy the core on which our economies depend. And that got people’s
attention. This is not some kind of a flower-power, tree-hugging exercise. This
is core economics. This is core financial stability, core price stability.”"
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
