Monday, August 4, 2025
From a paper by Joseph Feyertag:
“Climate change, environmental degradation, and the accelerating transition to a low-carbon economy are reshaping global labour markets. These forces are altering both the demand for and supply of labour, with far-reaching implications for central banks. As institutions that closely monitor labour market dynamics to guide monetary policy, central banks will increasingly need to account for the disruptions caused by environmental pressures. Physical climate impacts and nature degradation are likely to reduce labour productivity and limit work capacity in vulnerable sectors — particularly in emerging markets and developing economies (EMDEs). At the same time, the growing need for climate mitigation and adaptation investments may tighten labour markets by increasing demand for skilled workers, while displacing those employed in pollution-intensive industries. This report addresses a critical gap in current analysis by exploring how environmental risks intersect with central banks’ mandates through the labour market. It aims to equip central banks with the insights needed to integrate these evolving risks into their policy frameworks and operational decisions.”
Posted by 7:56 AM
atLabels: Energy & Climate Change
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