European Central Bank climate report: Early action is better

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — The European Central Bank has carried out its first climate change stress test. The analysis probes what would happen to banks, companies and the economy under different climate scenarios. The bank found that there will be costs in the short term to polluting industries like coal mining and conventional electricity generation. But those costs will pay off in the long run if the economy avoids sharply increased natural disasters and severe weather that would come with doing nothing, or with a late and hasty response. Banks in southern European countries like Greece were found to be particularly exposed to loan defaults if companies are hit by floods or fires.