- Biden unveiled a plan on Friday to mitigate the economic risks the climate crisis poses.
- The report outlines strategies to protect Americans’ savings and retirements from climate-related risks.
- This follows a May executive order analyzing how the climate crisis impacts the US financial systems.
President Joe Biden has made clear that acting on the climate crisis is a top priority for his administration — and he also wants to ensure Americans’ wallets aren’t being hurt in the process.
On Friday, Biden unveiled a 40-page report, entitled “A Roadmap to Build a Climate-Resilient Economy,” which focuses on mitigating the financial risks climate change places on people’s retirements, pensions, savings, and more. This follows up on an executive order the president signed in May, which was dedicated to analyzing and mitigating the risk the climate crisis poses to homeowners, businesses, consumers, and the government.
Over the past few years, the US has been hit with a number of extreme weather events, like Texas’ huge winter storm in February that caused the state’s entire power grid shut down. Those events have cost Americans more than $600 billion, according to the National Oceanic and Atmospheric Administration. Friday’s report, along with May’s executive order, would work to prevent that.
“If this year has shown us anything, it’s that climate change poses an ongoing urgent and systemic risk to our economy and to the lives and livelihoods of everyday Americans, and we must act now,” Gina McCarthy, the White House national climate adviser, told reporters.
Specifically, the report outlines a “whole-of-government” approach to promoting the resilience of the US financial system to climate-related risks, protecting life savings and pensions, incorporating climate related financial risk into federal lending, like mortgages, and building more resilient infrastructure.
The report says government agencies such as the Labor Department, Treasury, and Dept. of Veterans Affairs will work to develop tools to mitigate the financial risks across sectors, and they will be releasing subsequent details in coming months.
Biden pledged during his campaign to reduce fossil fuel usage, and he is pushing for Democrats’ $3.5 trillion social-spending bill to be passed, which includes investments to combat the climate crisis, such as green affordable housing. While there’s no question on the urgency of the crisis, though, Bank of America economist Ethan Harris wrote in a Friday note that actions addressing the climate will likely hurt economic growth “during the transition from a dirty to green economy” because workers will need to move from one sector to another.
But in the long-term, as Harris noted, the stunted economic growth will be well worth it. The United Nations in August released a harrowing report saying some of global warming’s effects will be “irreversible for centuries to millennia,” emphasizing how there’s no time to wait when it comes to addressing climate change.
“We are clear-eyed to how climate change poses a systemic risk to our economy,” National Economic Council deputy director Bharat Ramamurti said on the press call. “We are taking a precautionary approach that reflects the fact that inaction is not an option.”