Beyond how climate events harm the economy, how governments regulate and respond is also having an impact. Without clear policy on issues like carbon tax, the delays to business investment have “dire consequences for growth and employment,” Boone said.
While fiscal stimulus could provide a short-term boost, the OECD said the focus should be on the long term, such as through dedicated investment funds.
“The situation remains inherently fragile, and structural challenges are daunting,” Boone said. “There is a unique window of opportunity to avoid a stagnation that would harm most people: restore certainty and invest for the benefit of all.”
This article was provided by Bloomberg News.