The supply shocks associated with climate change must force a radical rethink in the way central banks set monetary policy, shifting focus away from inflation onto nominal growth. That is the view of Warwick McKibbin, an economist at the Australian National University and former board member of the Reserve Bank of Australia, whose work on the macroeconomic effects of climate change has suddenly become central to the thinking of Australia's monetary policymakers. In a landmark speech on Tuesday, RBA deputy governor Guy Debelle named climate change as a "systemic risk" to the Australian economy. He cited Professor McKibbin as one of the few economists who had done work on the macroeconomic effects of climate change. Read the full article by James Fernyhough in the Australian Financial Review.