A federal body reported last week that climate change could severely affect the economy. The report, conducted by the Commodity Futures Trading Commission, suggested that the effects of the wildfires across the US could potentially harm the country’s economy.
Climate Change vs. Economic Sustainability
On September 9, the CFTC, a federal body regulating several markets, shared a report relating the climate risks to the American economy. In a press release, CFTC commissioner Rostin Benham noted that “escalating weather events also pose significant challenges to our financial system.”
“If you’re denying this exists, you don’t ask for a report on it.” President Trump has dismissed climate change as a hoax, but a report commissioned by his Commodity Futures Trading Commission warns darkly of global warming's impact on financial markets https://t.co/MO8kfGjxrJ
— NYT Climate (@nytclimate) September 13, 2020
Benham said that aside from the physical destruction and actual loss of livelihood, destructive weather also affects sustainability. Moreover, Benham told CNN Business that climate events happen more frequently and extremely. He urged officials and regulators to craft rules “about climate resilience.”
Endangered Productivity Amid the Climate Crisis
Per the CTFC report: “Climate change could pose systemic risks to the US financial system.” Moreover, it suggests that if not addressed, it could harm the economy. Particularly, the climate events “could impair productive capacity of the economy.”
It could also “undermine its ability to generate employment, income, and opportunity.”
In addition, the CFTC climate subcommittee recommended several measures to deal with climate change. The suggested steps include demanding companies to divulge greenhouse gas emission details. Also, the report enjoins officials to address climate risks in their policies.
Moreover, the subcommittee wants to set a “fair, economy-wide, and effective” price for carbon. Through the subcommittee chairman Bob Litterman, the report noted that markets do not price “climate risk.”
Litterman added that unless the system fixes the climate risk pricing, “capital will flow in the wrong direction.”
Climate Change and Opinion
Basically, the federal body that ordered the report consists of Republican and Democratic commissioners. Notably, the report conclusion opposes claims of President Donald Trump and other Republicans who tend to underestimate climate change. Previously, the president even dubbed climate change a hoax. The administration also reversed green policies in an attempt to buoy the economy.
Meanwhile, according to the New York Times, an anonymized White House source said that CFTC’s findings are “not an official government report.”