As The Stock Market Soars, European Central Bank Warns Climate Change Threatens Global Economy - CleanTechnica

KUALA LUMPUR, 6 AUGUST 2026 —

Headline: As The Stock Market Soars, European Central Bank Warns Climate Change Threatens Global Economy - CleanTechnica Lead: As The Stock Market Soars, European Central Bank Warns Climate Change Threatens Global Economy CleanTechnica Body: It is my considered opinion that all stock market investors are stark raving mad. As wildfires cause devastation on almost every continent and water levels in the Danube are too low to cool nuclear power plants in Hungary, stocks in New York hit an all time high on August 4, fueled by an infantile belief that artificial intelligence will lead to an age of unimaginable abundance. That’s the fantasy being peddled by Elon Musk and his tech bro friends, and apparently lots of people are drinking deeply of the AI Kool Aid.

The ECB is the supervisor responsible for Europe’s largest banks. According to The Guardian , it has begun a program designed to assess how the escalating damage to ecosystem services could expose the financial system to risk. The investigation will examine how “ecosystem degradation pathways” could translate into credit loss dynamics the eurozone banks. The findings will be published later this year.

Frank Elderson, a member of the executive board at the European Central Bank, is not some faceless nobody. He was instrumental in the creation of the Network for Greening the Financial System (NGFS) in 2017, together with Mark Carney, who was the head of the Bank of England, and François Villeroy de Galhau, head of the Banque de France, at the time. He served as founding chair of the group of 114 global central banks and financial supervisors pushing to develop climate risk management. This is a fellow who knows what he is talking about.

Elderson told The Guardian the banking industry remains convinced that climate and nature related risks have to be addressed. “I would think it’s very difficult to find a bank in Europe that will honestly tell you that they think this is not relevant. I think that time has passed.” He and his team at ECB will be increasing their monitoring of the financial risks linked to the destruction of “ecosystem services,” which are nature-related processes or assets that support human activity.

“These services are not stable but they are in rapid decline. That’s why we talk about the climate and nature crises,” he said. “So knowing that dependency, and knowing those exposures by the banks, we come to the conclusion that this is relevant.” Elderson told The Guardian it was clear the rising frequency of natural disasters linked to global heating posed a threat to financial stability. He added that more work needed to be done to assess the risk from the collapse of ecosystem services, as reliance on nature was more complicated to map than the impact of a single extreme weather event.

Ecosystem services are defined as any benefit that can be drawn from a natural structure or process. For example, water can be used as a raw material, an energy source through hydropower, or for transportation. It is also a habitat for marine life critical for food production, and a basis for recreational services.

“Nature related risks can pose material economic and financial risks, including through their impacts on credit risk, growth, inflation and — over the long-term — potential financial instability,” Elderson said. “I did interviews [previously] saying, you know, if you destroy nature, you destroy the core on which our economies depend, and that got people’s attention. This is not some kind of a flower power, treehugging exercise. This is core economics. This is core financial stability, core price stability.”

Indeed it is, which begs the question, “Why are so many supposedly smart people totally ignoring the economic impacts of wildfires, droughts, floods — all of which have had devastating impacts on food production in nation after nation around the world?” If you have an answer to that question, please share it with us and your fellow readers in the comments.

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and believes weak leaders push others down while strong leaders lift others up. You can follow him on Substack at https://stevehanley.substack.com/ but not on Fakebook or any social media platforms controlled by narcissistic yahoos.

Steve Hanley has 6739 posts and counting. See all posts by Steve Hanley Source: CleanTechnica Published: 2026-08-04T21:09:34.000Z Region: World Topic: Economy (AI-assisted rewrite, based on the original source)