Bank of Japan head warns of climate threat to global economy

Kuroda said some parts of Asia are particularly vulnerable. (AFP)
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Updated 08 October 2020

Bank of Japan head warns of climate threat to global economy

  • A green bond is a fixed-income financial instrument to raise money for climate and environmental projects

TOKYO: Bank of Japan (BOJ) Gov. Haruhiko Kuroda said on Wednesday climate change is among the biggest challenges facing the global economy, joining a growing debate about how policymakers should address the growth risks posed by global warming.

Kuroda, former head of the Asian Development Bank, said some regions in Asia are particularly vulnerable to the economic consequences of natural disasters resulting from climate change.

“Climate change, how to realize a green economy, these issues are really huge and I must say the most challenging issues faced by the global economy,” Kuroda said in a virtual meeting of the US National Association for Business Economics.

Central banks around the world have recently raised their awareness on the financial and economic risks posed by extreme weather, but the topic is rarely addressed by BOJ policymakers.

The global community must offer aid to smaller island economies vulnerable to rising sea levels, while striving to develop alternative energy and reduce greenhouse gas emissions, said Kuroda.

“These kinds of efforts are needed not only in developed economies, but developing and emerging economies,” he said. The financial sector must also step up efforts to make the banking system more robust and resilient to risks from climate change, Kuroda said.

In a report issued in January, the Bank for International Settlements warned of the potentially huge effects of climate change on the world’s financial system.

The European Central Bank said last month it will from next year accept as collateral green bonds with payouts linked to sustainability targets.

The BOJ has in place a lending facility that offers cheap funds to commercial banks that extend loans to businesses with growth potential, including environmentally friendly projects.

But Kuroda has said the BOJ has no plans, for now, to buy green bonds, a category of fixed-income securities that raise capital for projects with environmental benefits.


Qatar Airways expects to keep Airbus A380s parked for years

Updated 19 October 2020

Qatar Airways expects to keep Airbus A380s parked for years

  • State-owned airline parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand
  • Qatar Airways boss Akbar Al-Baker criticizes rivals operating the A380 as ‘foolish’

DUBAI: Qatar Airways does not expect to use its Airbus A380s for at least the next two years, its chief executive said on Monday, longer than a previous projection for the superjumbos to possibly return to service in 2021.
The state-owned airline has parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand.
“We don’t think we are going to operate our A380s for at least the next couple of years,” Akbar Al-Baker told an online conference.
He had said in June the jets would remain parked until at least the middle of next year. The Gulf carrier plans to start retiring its A380s from 2024 when its oldest superjumbo reaches ten years of service.
The A380s would return once the airline saw the growth rate of 2019, before the pandemic struck, Baker said.
The 100 destinations to which the airline is currently flying is 25 fewer than planned due to a new wave of infections in Europe and travel restrictions, he said.
Baker criticized rivals operating the A380 as “foolish,” saying there was insufficient demand and so prices would be driven down.
Air France retired its A380s this year, while British Airways and Qantas retired their Boeing 747s as the crisis sent air travel into free fall.
Gulf carrier Etihad Airways is mulling whether its parked A380 fleet will ever return, while Emirates, the largest superjumbo operator, has resumed some services with the jet.