Central banks generally aren’t able to create new laws or regulations except within their mandate. Because they’re supposed to be independent, they also typically avoid delving into political debates. Central bankers aren’t elected, and can only impact economies indirectly via credit markets. Another point often mentioned by critics is that because the time horizon for monetary policy is about two to three years, and climate change time lines are much longer, central banks are ill-equipped to have a meaningful impact. Finally, there were concerns that central banks’ entry into the arena could open the door for more political influence. The Fed was a frequent target of criticism from U.S. President Donald Trump over interest rates, and sought to avoid further clashes with an administration skeptical about climate change.
