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

. this will lead the way towards the venice climate summit, which will also be held next july, in which we will explore ways of scaling up dedicated finance to support global and consistent policies to pursue a just transition towards a carbon - neutral economy. let me conclude by saying that i am grateful for the fact that there has been a large recognition across all countries of the importance of this agenda. the transition to net - zero emissions is essential if we want to reduce the risks that climate change poses to the wellbeing of the present and future generations. by continuing to work together, central banks, supervisory authorities and the financial sector at large will be able to provide a key contribution to reaching our climate goals. 2 / 2 bis central bankers'speeches