We're starting to work on the impact of climate change in terms of monetary policy. Right now, it isn't really part of our monetary policy models. However, we're starting to look at this issue.
We conducted a study with the Office of the Superintendent of Financial Institutions and six major financial institutions in Canada, using a scenario analysis. It's very difficult to make predictions about climate change given the level of uncertainty. We looked at different scenarios and tried to determine the impact of each one, in order to help financial institutions manage the risks posed by climate change to their balance sheet. When these risks are better understood, the financial system is in a better position to allocate capital to more sustainable investments.
That said, it isn't our role to provide advice on climate change policy. It's really up to Canada's elected officials to determine those policies. However, we play a role in helping the financial markets manage these challenges.
We must work to better understand the impact of climate change on our monetary policy models.