President Biden wants the government to measure the financial fallout of a changing climate on American families, businesses and the federal government.
On Thursday, Biden signed an executive order compelling key regulators including Treasury Secretary Janet Yellen and other members of the Financial Stability Oversight Council to assess the risks that a changing climate poses to the U.S. financial system.
It also suggests the Council make recommendations within six months on steps to reduce those risks.
“Americans should be able to know the real risks that extreme weather and rising seas pose to the homes that they’ve invested in, or the small businesses that they’ve built up,” said National Climate Adviser Gina McCarthy. “Knowing the risks is the first step to actually addressing them.”
The order also directs McCarthy as well as National Economic Council director Brian Deese to highlight the financial risks that climate change poses to the government itself, as well as the financing that would be required to transition to a carbon-free economy over the next three decades.
“Our modern financial system was built on the assumption that the climate was stable,” said Deese. “Today it’s clear that we no longer live in such a world.”
Meanwhile, Labor Secretary Marty Walsh, whose department oversees pensions and other retirement savings, was directed to explore ways to protect those savings against the costs of climate change.
That could involve rolling back a Trump-era rule designed to limit consideration of environmental and other social factors in choosing retirement investments.