The Fed Led the World Out of 2008. On Climate, It’s a Follower

When bad things happen to economies, or threaten to, the world has gotten used to seeing central banks at the front line of defense — with America’s Federal Reserve in the lead.

That’s not how the climate crisis, potentially the biggest economic threat of all, is playing out. Some central bankers have spent years examining risks, and now they’re finding ways to act. At the Fed, the conversation is just getting started.

The costs of climate change are already piling up. They’re forecast to get much worse — and the problem goes far beyond episodes of wild weather. Central banks are grappling with how a warming climate will upend calculations about everything from prices to the productivity of workers — areas that fall right into the mandate of central banks.