On September 2nd, the OECD published an 88-page report, funded by the European Union and produced in cooperation with the European Commission, setting out a framework for risk assessment of Net Zero commitments for De Nederlandsche Bank (DNB), the Dutch central bank. It carries the OECD’s imprimatur, but Brussels paid for it and Brussels co-wrote it — an odd arrangement given that the OECD’s own membership includes a United States Treasury that has spent the past 18 months telling the IMF and the World Bank to abandon precisely this kind of work and instead refocus on narrower, more traditional mandates. Bureaucracies exist to produce reports, and reports, evidently, are what we get, however far the political winds beneath them have already shifted.
The timing could hardly be worse for the study’s underlying premise. The climate-alarm narrative that has underwritten a decade and a half of ‘green finance’ activism is unravelling in full public view. The scientific committee that builds scenarios for the IPCC’s next assessment report has retired RCP8.5 and its successor SSP5-8.5 — the lurid ‘business as usual’ emissions pathway that supplied the statistical backbone for a generation of doomsday headlines — calling it implausible. Acting on demands from the Trump administration, the World Bank’s board voted at the end of June to retire its target of directing 45% of lending to projects with climate co-benefits. I made the case in these pages last month that the ECB and Bank of England continue doubling down on climate regulation even as green finance collapses around them. I also argued in July that the whole alarmist edifice is now engaged in a desperate rear-guard action to save a narrative the data no longer support. Into this rubble steps the OECD, handing the Dutch central bank an 88-page manual on how to keep the faith.
There is something almost quaint about the OECD’s involvement at all. The organisation counts among its members a United States that has withdrawn from the Paris Agreement and pushed the multilateral development banks to abandon climate lending targets. It is not obvious Washington signed off on its own club publishing an 88-page manual instructing a European central bank how to entrench climate criteria in bank supervision. But the OECD functions as a technical secretariat and when the European Commission foots the bill and co-authors the terms of reference, its imprimatur becomes less a mark of international agreement than a convenient laundering of a Brussels policy preference through an ostensibly neutral institution.
A study in search of a problem
Strip away the technical language of physical emissions-intensity metrics and disclosure frameworks, and the study’s own description of its purpose gives the game away. The study exists to help DNB assess legal and reputational risks that arise when a bank’s stated decarbonisation targets fail to keep pace with what it had pledged. Note that what is being risk-managed here is not the solvency of Dutch banks nor the stability of the payments system or anything resembling a conventional prudential concern. It is the risk that a bank might fall short of a voluntary climate pledge it was pressured into making in the first place — pressure that, as it happens, came substantially from the same Brussels apparatus that has just commissioned a study on how to police it.
