A panel of federal financial regulators warned in its annual report to Congress this week that the climate emergency is an "emerging risk" to America's economy, pointing out that increasing damage from extreme weather events will play havoc with the financial system. Employees at insurance companies currently processing claims for last weekend's deadly tornadoes and this week's massive windstorms and wildfires in the Midwest probably glanced up from their spreadsheets and muttered "Tell me about it."
The Financial Stability Oversight Council, a group of top financial regulators led by the Treasury secretary, offered a grim assessment of how the fallout from rising temperatures could spread, hurting property values and saddling insurers, banks and pensions that are associated with the sector with heavy losses.
This is the first time the FSOC's annual report has included climate risks in its annual overview of potential trouble spots for the US financial system. While the condensed overview in the annual report only takes up a few pages, it's based on a far more in-depth report the FSOC released in October, which we somehow missed. There's 125 pages of light weekend reading! (Or you could see the summary at E&E News.)
The new report warns that "Increasing adverse effects from climate change to households, communities, and businesses will likely exacerbate climate-related risks to the U.S. and global financial systems if not addressed," and notes that the financial sector faces risks not only from the actual damage done by a warmer climate, like sea level rise and extreme weather events, but also from the risks involved in the absolutely unavoidable transition to clean energy, like assets stranded in fossil fuel investments that will have to be written off because investors didn't take climate seriously, so how about we plan for that instead of just whistling in the dark and hoping fossil fuels can keep generating profits until they can't?
The report makes no mention of the risks posed by flooded-out coastal residents showing up at shareholders' meetings with torches and pitchforks.
The Times notes that the new report's recommendations
stopped short of the kinds of policy prescriptions that environmental groups and progressive Democrats have been calling for, such as tougher rules requiring banks to assess their ability to withstand climate-related losses, new capital requirements or curbs on extending financing to fossil fuel companies. Instead, it echoed a set of recommendations from the October report that called for improved data for evaluating climate-related financial risks and more uniform disclosure requirements to help investors make better informed decisions.
Still, it's an important step in recognizing that this is some serious stuff; the Times notes that the FSOC never even considered climate during the Trump administration.
And in fact, back in October, FDIC chair Jelena McWilliams, a holdover from the Trump administration, abstained from voting on the more detailed report, deploying that favorite excuse of climate deniers that there wasn't enough study of the financial risks of climate change to warrant recommending anything just yet. The other members voted to approve the report, which said delay on an orderly transition away from fossil fuels would only increase risk to the economy and make such a transition more chaotic:
“It is considerably more difficult," it added, "to judge the magnitude of risks to financial stability in a disorderly transition in which the economy and markets are forced to react to large, unanticipated changes in policy."
Now, since your Republicans are all supposedly very friendly to business and the financial sector, you might think that the GOP would sit up and take notice when the finance boffins warn that climate is going to be really bad for America's financial bottom line. Perhaps the more bidniss-oriented goopers might say we should head off the crisis, if only for the sake of shareholder value, or at least to make bank off the transition to green energy. There's gold in them thar solar arrays! (Like, maybe even literally, depending on how the tech shakes out.)
And sure, there are like five Republicans who think maybe climate is a problem, as long as we don't do anything too government-y to address it. Remember the "Conservative Climate Caucus"? Its Twitter account still tweets things now and then, like Yay Nuclear Power, and Boo Biden gas prices! Let's do more oil!
But for the most part, climate has become for so many on the Right a bizarre marker of ideological purity that Denis Leary's song "Asshole" could be their policy platform. Let the economy go to shit, they need to performatively pollute as much as possible, to roll coal on Prii and bicyclists, to roast spotted owls for dinner while getting the shittiest gas mileage they can, to own the libs. They were sad they couldn't crash the economy by blocking an increase on the debt ceiling, and they'd rather see their beachfront houses wash away than admit climate is an actual problem that needs to be addressed.
This is not to say Republicans will do nothing while the economy burns. They'll almost certainly pass laws all around the country, modeled on one passed this year in Texas, punishing any investment funds that "discriminate" against fossil fuels by divesting their oil stocks.
We were wrong when we thought the GOP was out to treat Orwell's1984 as a blueprint for setting up a dystopian state. They're far more interested in doing A Clockwork Orange in all its ultraviolent glory. Burn it all down, kick a granny in the teeth, and have a good laugh at the people crying about the stupid fate of the next generations. Won't be any "next generations" once we kick ya in the yarbles. Go cry more.
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