The interaction between climate change, financial stability and monetary policy was analyzed. The
problem of this study is: How does climate change affect financial stability and monetary policy in Brazil? The hypothesis is that climate change may affect financial stability leading to the occurrence of an economic recession scenario both in the short and long term. The overall objective is to verify the relationship between climate change, financial market and monetary policy. The specific objectives are: to analyze the consequences of climate change on the financial market; analyze the consequences of climate change on monetary policy; verify the effects on the Brazilian economy caused by climate change. The method employed consisted of adapting the DEFINE 1.0 model resulting in the creation of a post-Keynesian model called Brazilian Ecological Macroeconomics 1.0. The results showed that in the short and long term, climate change has severe effects on the Brazilian economy, specifically affecting financial stability and monetary policy by causing a decrease in production growth, an increase in atmospheric temperature, an increase in the leverage ratio of banks , the government’s public debt, the default rate of companies, and a decrease in the profitability of companies. It is recommended that a study be carried out in order to report ecological sustainability and Brazilian fiscal policy.
