Australian manufacturing
Deputy Reserve Bank governor Guy Debelle. (Image: AAP/David Kapernick)

Deputy Reserve Bank governor Guy Debelle's speech on climate change last night generated some stark headlines. But it's worth focusing on what exactly he said, which was less pointed, but perhaps more important in the long term, than some media reports suggested (especially those that portrayed it as some sort of call to arms).

Debelle was actually discussing what climate change means for monetary policy, and how it demands a different approach to thinking about the relationship between monetary policy settings and the economy. His first point was that, traditionally, climate is regarded as a cyclical force in the economy -- there's a cyclone, or a flood, and it has economic impacts, but then the bananas grow again, or the ports re-open, and things return to normal; "output returns to its former level," as Debelle said.