Treasury Secretary Janet Yellen is set to warn on Tuesday that climate change is already having an economic impact in the U.S., cautioning that it could cause asset value losses in the future, according to Reuters.
Yellen is expected to issue the warning to an advisory board that includes academics and leaders from both the nonprofit and private sector, according to Reuters. The secretary will also argue that a slow transition to a net-zero carbon economy could have deep impacts on the country’s financial system.
“As climate change intensifies, natural disasters and warming temperatures can lead to declines in asset values that could cascade through the financial system,” she said in remarks prepared for delivery at the advisory board’s first meeting. “And a delayed and disorderly transition to a net-zero economy can lead to shocks to the financial system as well.”
The climate change alert from Yellen comes as weather disasters in the last year have caused billions of dollars in damage across the U.S. A report from the National Oceanic and Atmospheric Administration concluded that 2022 tied 2017 and 2011 for the highest number of billion-dollar disasters.
The report also found that last year was the third costliest year when it comes to natural disasters, with damages totaling at least $165 billion — trailing only 2017 and 2005.
The advisory board, the Climate-related Financial Risk Advisory Committee, was organized last year to help promote U.S. policies to mitigate the risks that climate change poses to the economy.
The Biden administration has taken executive actions to try to combat climate change risks, including an expected new rule from the Securities and Exchanges Commission that would require companies to disclose more information about their greenhouse gas emissions.
But Republicans in Congress have argued the White House is overextending its authority in its moves to address climate change.
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