Scientific and Regulatory Approaches to “Green” Central Banking: The State of The Art from a Legal Perspective

The engagement of central banks with the consequences of climate change has become not only the subject matter of academic debates, but also a regulatory reality, albeit in very heterogeneous shapes across jurisdictions. Against this backdrop, this paper aims at providing: (i) an up to date and comprehensive review of the relevant literature and (ii) a report of the regulatory and legislative approaches followed by some of the most influential central banks. With respect to (i), the paper initially establishes a shared framework for the addressed issues, presenting the outcomes of previous scientific works in a schematic manner. It then explores both the widely accepted ideas and the predominant viewpoints on the most debated topics. Regarding (ii), the paper proposes a classification of the tools used by central banks worldwide, building on earlier studies. The article looks subsequently at several central banks (the European Central Bank, the US Federal Reserve, the Bank of England, the Bank of Norway, the Bank of Japan, and the People’s Bank of China) and reports which of such tools are respectively implemented, such as climate-related financial risks stress testing and monetary operations.