The Biden administration is taking efforts to address climate change’s economic concerns, releasing a 40-page study on government-wide strategies to protect the financial, insurance, and housing markets, as well as American households’ savings, on Friday.
The mortgage process, stock market disclosures, retirement plans, federal procurement, and government budgeting are all being re-examined as a result of the study in order for the country to price in the risks posed by climate change. The research is a follow-up to President Joe Biden’s executive order from May, which effectively asks the government to look into how excessive heat, flooding, storms, wildfires, and other climate-related changes may harm the world’s greatest economy.
“If this year has taught us anything, it’s that climate change continues to represent an urgent and systemic risk to our economy, as well as to the lives and livelihoods of ordinary Americans, and we must act immediately,” White House national climate advisor Gina McCarthy told reporters.
A hurricane in Texas in February resulted in significant power disruptions, 210 fatalities, and extensive property damage. Wildfires raged across the West. The heat dome in the Pacific Northwest pushed Seattle and Portland, Oregon, to new highs. In August, Hurricane Ida hit Louisiana, causing catastrophic floods in the Northeast.
The Biden administration’s recommendations represent a fundamental shift in the larger conversation about climate change, implying that the country must plan for the expenses that families, investors, and governments would face.
The study is also an attempt to demonstrate to the rest of the world how serious the US government is about combating climate change ahead of the United Nations Climate Change Conference in Glasgow, Scotland, from Oct. 31 to Nov. 12.
The government’s Financial Stability Oversight Council is creating instruments to identify and mitigate climate-related economic risks, which is one of the actions mentioned. The Treasury Department intends to address insurance industry risks and coverage availability. The Securities and Exchange Commission is considering obligatory disclosure regulations regarding climate change’s potential and hazards.
The Labor Department proposed a regulation on Wednesday that would require investment managers to consider environmental issues when making pension and retirement savings decisions. The Office of Management and Budget said that the government would begin the process of requesting that federal agencies take into account greenhouse gas emissions from supply businesses. Biden’s budget plan for fiscal year 2023 will include a climate risk assessment.
The Department of Housing and Urban Development and its partners are creating disclosures for homebuyers and flood and climate-related hazards, with the Department of Housing and Urban Development and its partners looking for the impact on the housing market. For its home loan program, the Department of Veterans Affairs will now consider climate concerns.
The Federal Emergency Management Agency is upgrading its National Flood Insurance Program requirements, which may include revisions to criteria that date back to 1976.
McCarthy stated, “We now realize that climate change is a systemic concern.” “We need to take a hard look at how the federal government conducts its job, as well as how we see the financial system and its stability.”