Can finance really deliver a net-zero economy?

A decade has passed since Mark Carney, then the governor of the Bank of England and chairman of the Financial Stability Board, delivered a seminal warning about the “tragedy of the horizon.”

Carney’s thesis was elegantly simple: incorporate tomorrow’s climate risks into today’s cost of capital, and the invisible hand of the market would dutifully guide the global economy toward decarbonization. This vision ushered in a proliferation of disclosure frameworks — from the Task Force on Climate-Related Financial Disclosures to the Partnership for Carbon Accounting Financials to the Sustainable Finance Disclosure Regulation — alongside a parade of alliances, including the Glasgow Financial Alliance for Net Zero and the Net-Zero Banking Alliance. The underlying conviction was that enhanced transparency, particularly through standardized carbon accounting, would compel capital to migrate toward greener pastures, with emissions reductions following in its wake.