The White House wants to address the economic risk of climate change

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WASHINGTON – The Biden administration is taking steps to address the economic risks posed by climate change, releasing a 40-page report on Friday on government-wide plans to protect financial, insurance, housing, and savings of American families.

The report is reconsidering the mortgage process, stock market disclosure, retirement planning, federal procurement, and government budgeting so the country can price in the risks posed by climate change. The report is a continuation of a May ordinance issued by President Joe Biden, essentially calling on the government to analyze how extreme heat, floods, storms, forest fires and broader adaptations to address climate change are affecting the world’s largest economy could.

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“If anything this year has shown us it is that climate change poses an ongoing urgent and systemic risk to our economies and the lives and livelihoods of ordinary Americans, and we must act now,” said Gina McCarthy, national climate adviser of the White House, told reporters.

A February storm in Texas resulted in widespread power outages, 210 deaths and serious property damage. Forest fires raged in the western states. The heat dome in the Pacific Northwest caused record temperatures in Seattle and Portland, Oregon. Hurricane Ida hit Louisiana in August and caused deadly flooding in the northeast.

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The actions recommended by the Biden government reflect a marked shift in the broader discussion about climate change, suggesting the nation must prepare for the costs that families, investors and governments will face.

The report is also an attempt to show the world how serious the US government is about tackling climate change in the run-up to the United Nations Climate Change Conference, which takes place October 31 to November 12 in Glasgow, Scotland.

The steps outlined include the government’s Financial Stability Board developing the tools to identify and mitigate climate-related risks to the economy. The Treasury Department plans to address the risks to the insurance sector and the availability of coverage. The Securities and Exchange Commission is reviewing mandatory disclosure requirements on the opportunities and risks of climate change.

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The Labor Department on Wednesday proposed a rule for investment managers to incorporate environmental decisions into retirement and retirement planning decisions. The Office of Management and Budget announced the government would ask federal agencies to consider greenhouse gas emissions from suppliers. Biden’s budget proposal for fiscal year 2023 will include an assessment of climate risks.

Federal agencies dealing with home lending and mortgage lending are looking for the impact on the housing market, with the Department of Housing and Urban Development and its partners developing disclosures for homebuyers and flood and climate risks. The Department of Veterans Affairs will also address climate risks for its home loan program.

The Federal Emergency Management Agency is updating the standards for its National Flood Insurance Program and may revise guidelines dating back to 1976.

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“We now see that climate change is a systemic risk,” said McCarthy. “We basically have to look at how the federal government does its work and how we view the financial system and its stability.”

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