The climate crisis poses an “emerging threat” to the American financial system, a new FSOC report warns. The Financial Stability Oversight Council, created by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, works to identify emerging risks and provide regulators with guidance on how to respond, among other mandates. Specifically, regulators should give particular scrutiny to the American economy’s dependence on methane-based gas for heating and electricity generation.
The report warns that “sizable reductions” in the burning of methane-based gas will be required to achieve net-zero climate pollution by 2050, which could cause gas asset values to spiral even more chaotically than coal. The report also calls for more mandated disclosures of firms’ emissions and exposure to climate change. However, “the need for better data and tools cannot justify inaction,” the report warned. “Climate-related financial risks will become more acute if not addressed promptly.” (HuffPost, Axios, Washington Post $, Reuters, CNN, CNBC, New York Times $, Reuters, AP, Washington Examiner, Grist)