RBA’s role in climate change policy is limited, says review
The Reserve Bank should take climate change into account, but supporting the energy transition should not be an explicit goal of interest rates policy.
First independent review of the Reserve Bank orders sweeping overhaul
Two new boards will deal with monetary policy decisions and governance separately
The rate-setting panel will be filled with experts and be expected to challenge the governor
Rates decisions will occur eight times annually, down from 11
Board members will be encouraged to speak out and their personal rate votes will be disclosed anonymously
The Reserve Bank should take the risks of climate change and its growing impacts on the economy and financial system into account in its forecasting and other activities, but supporting the transition should not be an explicit goal of interest rates policy, a review of the central bank has found.
Instead, climate change should be considered as part of the bank’s pursuit of the objective to contribute to the “economic prosperity and welfare” of Australians, which the review says should be elevated to an over-arching institutional objective and made clear that it includes welfare now and in the future.
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Ben Potter writes on energy, climate change and innovation, and has been Washington correspondent, opinion editor and companies editor. Connect with Ben on Twitter. Email Ben at bpotter@afr.com
