Climate Change Poses Major Risks to Financial Markets, Regulator Warnshttps://www.nytimes.com/2019/06/11/climate/climate-financial-market-risk.htmlWASHINGTON — A top financial regulator is opening a public effort to highlight the risk that climate change poses to the nation’s financial markets, setting up a clash with a president who has mocked global warming and whose administration has sought to suppress climate science.
Rostin Behnam, who sits on the federal government’s five-member Commodity Futures Trading Commission, a powerful agency overseeing major financial markets including grain futures, oil trading and complex derivatives, said in an interview on Monday that the
financial risks from climate change were comparable to those posed by the mortgage meltdown that triggered the 2008 financial crisis.“If climate change causes more volatile frequent and extreme weather events, you’re going to have a scenario where these large providers of financial products — mortgages, home insurance, pensions — cannot shift risk away from their portfolios,” he said. “It’s abundantly clear that climate change poses financial risk to the stability of the financial system.”... On Wednesday, Mr. Behnam plans to detail the formation of a panel of experts at the trading commission assigned to produce a report on how global warming could affect the financial sector, potentially impacting food costs, insurance markets, the mortgage industry and other economic pillars.Because the report, expected late this year or early next, would be a product of the federal government, it would most likely put Mr. Behnam in direct conflict with the policies of the Trump administration.
The report, which Mr. Behnam said he expected would focus in particular on potential harm to the nation’s agriculture sector, is likely to emerge at a moment when Mr. Trump will be making the case to farm states, which have already been hurt by his crop tariffs, to re-elect him in 2020....
“We understand that climate change causes a big systemic risk,” said Stefano Giglio, a professor of finance at Yale University who has published studies with the National Bureau of Economic Research on the financial consequences of warming. “But right now, we don’t have enough information, and
we don’t have the right financial products to insure this risk. The CFTC can help give that information and help lay out a global marker for what we need to do.”