Government subcommittee report examines climate change impact on U.S. financial system
Managing Climate Risk in the U.S. Financial System, unanimously approved by the U.S. Commodity Futures Trading Commission’s Climate-Related Market Risk Subcommittee, is the first-of-its-kind effort from a U.S. government entity. The report, which presents 53 recommendations, concludes that climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy.
Jeff Dukes, director of Purdue’s Climate Change Research Center and a professor of forestry and natural resources and biological sciences, served on the 34-member committee and explained the importance of the report.
“I think this is the most important government report on climate change in a long time. If our financial markets do a good job of pricing the risks from climate change, then our society is much more likely to address the problem,” Dukes said.
Dukes, one of a few academic experts who joined with professionals from the financial and commodity sectors to write the report, praised the committee’s unanimous response.
“All of these people voted unanimously to adopt a report that calls for putting a price on carbon
and for helping financial markets account for the risks associated with climate change. Our financial system has been built to price in risks and minimize the damage from sudden shocks, but it hasn’t done a good job of pricing or planning for climate change. This report shows how that could and should be done,” Dukes said.
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