Claudia Buch: Time for structural change in central bank statistics? How to support the transition to a climate-friendly economy

Speech by Prof Claudia Buch, Vice-President of the Deutsche Bundesbank, at the 11th Biennial Irving Fisher Committee (IFC) Conference, Basel, 25 August 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

We are in the midst of a global process of structural change. Geopolitical risks have increased, addressing climate change has become all the more urgent, demographic trends and digitalisation affect the real economy and our societies.

Central bank statistics are certainly not the key actors, but they are nevertheless important. They provide crucial information on the financial system and the real economy, information which is relevant not only for monetary policy and financial stability but also for researchers and the broader public. Therefore, central bank statistics have to change as well in order to support and reflect structural changes.

What role can statistics play in providing solutions to societal problems? Take the case of mitigating climate change. Current decisions by firms, consumers, and investors do not sufficiently take adverse effects on the climate into account. We over-use greenhouse gases. Internalising climate-related externalities requires adjustments in relative prices. Implicit subsidies to the economy arising from the underpricing of climate externalities, but also from the underpricing of energy security, need to be withdrawn. Ultimately, policy decisions are needed, above all the pricing of carbon emissions that change the behaviour of emitters of carbon.