This paper explores the interaction of monetary policy and climate change as they jointly influence macroeconomic outcomes, connecting policy and outcomes in each realm to the implications of the other. It also explores the nature of the macroeconomic model that would be required to explore the links between monetary policy and climate policy. The paper has four parts. First, it reviews the relevant macroeconomic outcomes of emissions mitigation policy and climatic disruption, exploring how negative supply shocks can affect central banks’ ability to forecast and manage inflation. Second, the paper reviews basic approaches to monetary policy, including inflation and output targeting, and other responsibilities that may fall to central bankers. Third, we bring together the two sets of issues to consider the appropriate monetary framework in a carbon-constrained and climatically disrupted world and to highlight the climate policy frameworks that can make monetary policies more efficient and effective. We then summarize the nature of the macroeconomic modelling framework that is needed to better analyse climate and monetary policy interactions. We conclude that policy responses to climate change can have important implications for monetary policy and vice versa and that, in light of the urgency of ambitious climate action, these policy spheres should be brought together more explicitly and more appropriate macroeconomic modelling frameworks developed.

中文翻译：

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气候变化与货币政策：政策设计与建模问题

本文探讨了货币政策和气候变化的相互作用，因为它们共同影响宏观经济结果，将每个领域的政策和结果与另一个领域的含义联系起来。它还探讨了探索货币政策与气候政策之间联系所需要的宏观经济模型的性质。本文分为四个部分。首先，它审查了减排政策和气候破坏的相关宏观经济成果，探讨了负面的供应冲击如何影响中央银行预测和管理通货膨胀的能力。其次，本文回顾了货币政策的基本方法，包括通货膨胀和产出目标，以及中央银行可能承担的其他责任。第三，我们将这两组问题放在一起，以考虑在碳限制和受气候破坏的世界中的适当货币框架，并着重强调可以使货币政策更加有效和有效的气候政策框架。然后，我们总结了宏观经济建模框架的本质，该框架是更好地分析气候和货币政策相互作用所必需的。我们得出的结论是，应对气候变化的政策应对措施可能对货币政策产生重要影响，反之亦然，并且鉴于雄心勃勃的气候行动的紧迫性，应将这些政策领域更明确地结合在一起，并制定更合适的宏观经济建模框架。