The former chief Brexit negotiator Lord Frost has welcomed a Parliamentary report that called for the Bank of England to lose its remit to fight climate change.
The report, from the House of Lords Economic Affairs Committee, was published on Monday and noted that numerous witnesses had expressed concern over the addition of irrelevant roles to the Bank’s workload.
Many witnesses said the climate remit, in particular, was problematic, suggesting that it risked “jeopardising the Bank’s ability to prioritise its primary objectives”.
Last week, Chancellor Jeremy Hunt deprioritised global warming in the Bank’s work programme, but the new report has increased pressure for its wholesale removal.
The climate-change role was added to the Bank’s remit in 2021 by the then Chancellor, Rishi Sunak.
Lord Frost said:
“It’s obvious that effective central banks should concentrate on their core objectives of avoiding inflation and ensuring financial stability.
“Requiring them to promote the economy-crushing net zero programme just makes it harder for them to focus on these primary tasks and more likely we will see more of the policy mistakes that have been so evident in the last couple of years.”
Net Zero Watch director Andrew Montford said:
“With Andrew Bailey saying the outlook for the economy is the worst he has ever seen, it’s vital that the machinery of Government has a laser focus on growth. We can no longer afford distractions like Net Zero.”
Net Zero Watch has criticised the Bank of England for its fatally flawed ‘climate stress test’ report which used false data and discredited scenarios.
Earlier this year Net Zero Watch called on the Bank of England to withdraw it climate stress test report saying it used “false data and discredited scenarios.”
Experts criticised the Bank of England’s (BOE) climate stress test for adopting discredited projections of a global temperature change of 3.3C by 2050. This BOE projection far exceeded the IPCC’s SSP5-8.5 scenario which Net Zero Watch said was “an extreme scenario which in itself is generally regarded to be extremely unlikely.”
By using the most extreme and most unlikely scenario Net Zero Watch said the Bank of England grossly distorted the cost estimates for climate impacts over the next 30 years.
The BOE cited a study by Knutson et al. 2020 in its projections for tropical cyclones, but according to Net Zero Watch, the bank mispresented its findings. They said the BOE erroneously claimed that the “global frequency of very intense tropical cyclones (category 4–5 storms) that tend to drive property damage is also projected to increase.”
As Prof Roger Pielke Jr. pointed out, the study the BOE used in its projections for tropical cyclones (Knutson et al. 2020) came to the very different conclusion: “In summary, author opinion was divided on whether the global frequency of very intense (e.g., category 4–5) TCs will increase or not.”
The BOE also claimed that up to 7% of insured UK houses may be uninsurable by 2050 because of increased flood risk. But Net Zero Watch pointed out “there is absolutely no evidence for this dramatic rise in uninsurable houses, merely what participants from the insurance industry think might happen. In reality, the number of homes damaged by flooding each year is numbered in the thousands, even in a bad year.”
The BOE also claimed that general insurers will suffer higher claims for wind-related damage. However, Net Zero Watch pointed out this runs counter to UK Met Office data which shows that storms in the UK have been declining in strength since the 1990s.
Net Zero Watch director Benny Peiser said:
According to empirical data published by MunichRe and the World Bank losses from climate and weather-related events have been falling significantly as a percentage of GDP in the last 30 years, despite a rise in global temperatures.
The Bank of England’s climate stress test is fatally flawed. Unless it is withdrawn the bank’s reputation and credibility will be severely damaged.”
