The Federal Reserve Is Catastrophically Wrong About Climate Change
Does climate change really not pose a risk? Let’s look at the numbers.
At a recent event, Federal Reserve Governor Christopher Waller said that climate change does not pose a serious risk to financial systems, and the large banks don’t need to worry about it. To be clear, he does believe that climate change is real, just that it isn’t a risk, at least when it comes to the banking industry. But this notion seems to fly in the face of what climate scientists have said for years and what common sense seems to say about the knock-on effects of the looming climate disaster. So, is Mr Waller misguided? And is the Federal Reserve, and in turn, the American economy, on course to be woefully underprepared for climate change?
To quote Mr Waller exactly, he said, “Climate change is real, but I do not believe it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States” and then went on to say “Risks are risks. There is no need for us to focus on one set of risks in a way that crowds out our focus on others.” In other words, Mr Waller doesn’t see climate change affecting the economy or the banking system, and so the Federal Reserve, who “monitors financial system risks and engages at home and abroad to help ensure the…
