ignazio visco : remarks on financing carbon neutrality remarks ( via prerecorded video ) by mr ignazio visco, governor of the bank of italy, at the roundtable on financing carbon neutrality, boao forum for asia annual conference, 20 april 2021. * * * let me start by thanking the boao forum for asia for the kind invitation to this conference and let me express my regret for the impossibility of joining you in person in boao. in these remarks, i will discuss the importance of international cooperation in supporting the transition to net carbon neutrality and i will briefly describe the related activities that we are carrying on within the group of twenty. climate change and the pandemic are the most important global problems of our times. there is no need to remind this audience that the growing use of fossil fuels is pushing greenhouse gas concentrations to levels that, unless forceful measures are taken, by the end of this century will lead to a rise in the temperature of the planet that would bring catastrophic consequences for our ecosystems. many of the root causes of climate change, such as deforestation and the loss of habitat, by increasing the chance of contact between people and wildlife also increase the risk of pandemics. as the united nation ’ s one health approach recognises, our health is closely connected to the health of the planet. climate change is, in particular, a classic example of a negative externality : carbon emissions represent a cost that spills over onto other markets besides the one in which they originated. but in this case, as pointed out by professor nordhaus in his nobel lecture, externalities are particularly thorny due to their global nature, which puts them outside the domain not only of markets but also of national governments, just like the pandemic is doing in these days. close international coordination is therefore needed. we must bear in mind that stopping climate change requires first of all a strong and consistent political determination : national governments are the only institutions that can provide incentives to “ green ” investments, levy taxes on carbon emissions, and introduce regulations limiting the amount of allowable emissions. but finance can go a long way towards helping and reinforcing this process, channelling more resources towards green investments. for these reasons, the finance track of the g20 has put sustainable finance among its top priorities. there is a lot that can and needs to be done. – filling data gaps and improving firms ’ disclosure is crucial in order to correctly assess climate - related financial

, diane coyle notes that the uk ’ s statistical abstract for 1871 – 85 – in retrospect, the height of the industrial revolution – devoted just 12 of the 200 pages on the economy ’ s output and trade to manufacturing and transport “ commentary : modernising economic statistics : why it matters, ” national institute economic review, no. 234 ( november 2015 ). robert j. gordon, the rise and fall of american growth ( princeton up ; 2016 ). see also : juan f. jimeno, frank smets and jonathan yiangou, “ secular stagnation : a view from the eurozone, ” secular stagnation : facts, causes and cures, ed. coen teulings and richard baldwin ( cepr, 2014 ). bart van ark, mary o ’ mahony and marcel p. timmer, “ the productivity gap between europe and the united states : trends and causes ”, the journal of economic perspectives, vol. 22, no. 1 ( winter, 2008 ), pp. 25 – 44. carol corrado, jonathan haskel, cecilia jona - lasinio and massi miliano iommi, innovation and intangible investment in europe, japan, and the united states, oxford review of economic policy, vol : 29 ( oxford, 2012 ), pp. 261 – 6. carl frey and michael osborne, the future of employment : how susceptible are jobs to computerisation? ( oxford, september 2013 ). bis central bankers ’ speeches skills in logistics, ( re - ) programming, and routine or basic maintenance. are our education systems ready for that challenge? moreover, what will happen to those who are displaced by new technologies? economic theory tells us that technological gains raise disposable income and hence create new demand somewhere in the economy. but as the literature on “ hollowing out ” has shown, technological advances may lead to a polarisation of jobs – at the expense of the middleskilled. 15 and this seems to be evident also in recent employment growth seen in the euro area, with the bulk of the recent employment growth seen concentrated in the lower productivity sectors. 16 so the risk is that the one effect offsets the other : technological advances in some sectors are neutralised by gains in employment in other, lower productivity ones. that might be damaging for social cohesion. this is why the second channel is crucial : across - firm productivity growth. 17 to combine productivity growth with full employment, it ’