International
Climate Change is the Biggest Threat to the US Economy, FED Has Warned
Climate- and weather-related events have directly cost the US more than $500 billion over the past five years, according to a Federal Reserve official.
Climate and weather-related events have directly cost the US more than $500 billion according to Kevin Stiroh, the executive vice president responsible for bank regulation at the New York Federal Reserve System (Fed).
“Climate change has significant consequences for the US economy and financial sector through slowing productivity growth, asset revaluations and sectoral reallocations of business activity,” Stiroh said on Thursday at the GARP Global Risk Forum in New York.
According to him, global warming is expected to disrupt business operations and economic activity in the coming years in addition to causing severe damage to natural resource and infrastructure damage. “These effects will be felt across business sectors and asset classes, and on the strategies, operations and balance sheets of financial firms”.
The central bank would “use its authorities and tools to prepare financial institutions for severe weather events.” Fed Chairman Jay Powell told Congress this year.
In a 1,500+-pages report released late 2018, scientists from 13 federal agencies predicted that climate change would slash gross domestic product by a tenth by 2100 if the rate at carbon emissions that warm the planet are being released into the atmosphere.
The scientists said that in an event which involves extreme weather conditions, there is possibility of wreaking havoc on growth through adverse effects on the supply chains, healthcare system, labor productivity, agriculture, tourism, infrastructure, electricity costs and power generation.
“With continued growth in emissions at historic rates, annual losses in some economic sectors are projected to reach hundreds of billions of dollars by the end of the century—more than the current gross domestic product of many US states,” the report said.
Top economists from both sides of the aisle signed a letter in January, the letter said that climate change was “a serious problem calling for immediate national action” and called for a national tax on carbon.”
