The Federal Reserve Is Worried Climate Change Could Shock Economy
Despite President Donald Trump’s disbelief that climate change is real, the Federal Reserve said it has contingencies in place for the adverse effect weather disasters have on the economy. In a recent letter to Sen. Brian Schatz, Federal Reserve Chairman Jerome Powell said they prepare for severe weather events, reported the Wall Street Journal (WSJ).
“Although addressing climate change is a responsibility that Congress has entrusted to other agencies, the Federal Reserve does use its authorities and tools to prepare financial institutions for severe weather events,” Powell wrote. “Over the short term, these events have the potential to inflict serious damage on the lives of individuals and families, devastate local economies (including financial institutions), and even temporarily affect national economic output and employment.”
There’s been a big debate over whether climate change is factual and, as usual these days, Democrats and Republicans are on opposite sides of the aisle. Trump infamously opted to pull out of the Paris Climate Agreement, but it can’t officially go into effect until 2020, reported the Washington Post.
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In the meantime, those who believe in the threats unchecked climate change will bring are urging government agencies to take the necessary precautions. Even private businesses are making climate change proof investments. Powell’s letter was in response to one from Schatz asking them to brace for consequences.
Powell stopped short of saying the issue was high-priority; and Schatz tweeted the responses he received from Powell and other U.S. regulators were “garbage.”
“There is no way to say this diplomatically. Their answers were garbage. The highlights: according to the Fed, severe weather isn’t new and climate change isn’t their responsibility. The American agencies that oversee the financial system have decided to ignore climate change,” Mr. Schatz tweeted.
After noting this was in direct opposition to other industrialized countries, he chastised regulators for not taking climate change seriously enough.