On 12 December 2015, the UN secretary-general, Ban Ki-moon, hailed the COP21 climate agreement in Paris as ‘a monumental triumph for people and our planet’. The UN press office called it a ‘resounding success for multilateralism’. According to the president of the General Assembly, Mogens Lykketoft, the agreement signalled ‘nothing less than a renaissance for humankind’. Away from the media spotlight, policy makers speak more candidly.

The 195 parties to the UN Framework Convention on Climate Change agreed to limit global temperature increases to less than 2ºC above pre-industrial levels, by implementing self-determined, voluntary emissions reduction targets, known as Intended National Determined Contributions. But even in the unlikely event that the current INDCs are fully implemented, global average temperatures will still rise by 2.5ºC. In other words, at this rate, even in the best case scenario, the world will warm to dangerously high levels which scientists believe could destroy ecosystems, wipe out crop yields and expose people to unprecedented levels of famine, flooding and drought. In that light, the Paris Agreement hardly sounds like a renaissance for humankind.

Talking to politicians, diplomats and corporate executives last July, the OECD secretary-general, Angel Gurría, said that ‘we’re currently on course for around 3ºC to 5ºC.’ Scientists generally agree that an increase of that magnitude would be catastrophic, making much of the tropics inhospitable and melting the entire Greenland ice sheet and a significant portion of the Antarctic ice sheet.

Meaningful climate action is impossible as long as long-term considerations are excluded from the structures of financial and political decision making. With the next election or the next return on investment never more than a few years away, there is no direct incentive for decision makers to show a sense of intergenerational responsibility. It was clear from the discussion after Gurría’s lecture that they know what needs to be done: the immediate withdrawal of fossil fuel subsidies, massive investment in clean energy, money for research into low-carbon technologies, regulatory intervention to encourage green investment.

But as Mark Carney, the governor of the Bank of England, said in a lecture at Lloyd’s of London last autumn, ‘the horizon for monetary policy extends out to two to three years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle – about a decade. Once climate change becomes a defining issue for financial stability, it may already be too late.’