WH Report Outlines 'Systemic Risk' of Climate Change to Housing, Financial Institutions

A new White House report released Friday outlines the widespread "systemic risk" of climate change in areas ranging from the housing and insurance markets to financial institutions, the Associated Press reported. The 40-page report's release complies with President Joe Biden's May executive order that asked the government to examine how the nation's economy could be affected by the impacts of climate change, which has forced the U.S. to contend with increasingly severe heat, flooding, storms and wildfires.

"If this year has shown us anything, it's that climate change poses an ongoing urgent and systemic risk to our economy and to the lives and livelihoods of everyday Americans, and we must act now," Gina McCarthy, the White House national climate adviser, told reporters.

One of the steps laid out in the lengthy document is having the government's Financial Stability Oversight Council create tools that could pinpoint and minimize climate change-related threats to the economy. Meanwhile, federal agencies involved in lending and mortgages for homes would assess the impact of climate change on the housing market, the AP reported.

The Department of Housing and Urban Development and partners would also play a role by creating disclosures for flood and climate-related risks and people who buy homes.

For more reporting from the Associated Press, see below:

Biden Adminstration Outlines "Systemic" Climate Change Risks
A new White House report released Friday outlines the widespread “systemic risk” of climate change in areas ranging from the housing market to insurance and financial institutions. President Joe Biden delivers an update on the COVID-19 response and vaccination program, in the South Court Auditorium on the White House campus October 14 in Washington, D.C. Evan Vucci/AP Photo

A February storm in Texas led to widespread power outages, 210 deaths and severe property damage. Wildfires raged in Western states. The heat dome in the Pacific Northwest caused record temperatures in Seattle, Washington and Portland, Oregon. Hurricane Ida struck Louisiana in August and caused deadly flooding in the Northeast.

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

The report is also an effort to showcase to the world how serious the U.S. government is about tackling climate change ahead of the United Nations Climate Change Conference running from October 31 to November 12 in Glasgow, Scotland.

Among the other steps outlined in the report, the Treasury Department plans to address the risks to the insurance sector and the availability of coverage. The Securities and Exchange Commission is looking at mandatory disclosure rules about the opportunities and risks generated by climate change.

The Labor Department on Wednesday proposed a rule for investment managers to factor environmental decisions into the choices made for pensions and retirement savings. The Office of Management and Budget announced the government will begin the process of asking federal agencies to consider greenhouse gas emissions from the companies providing supplies. Biden's budget proposal for fiscal 2023 will feature an assessment of climate risks.

The Federal Emergency Management Agency is updating the standards for its National Flood Insurance Program, potentially revising guidelines that go back to 1976.

"We now do recognize that climate change is a systemic risk," McCarthy said. "We have to look fundamentally at the way the federal government does its job and how we look at the finance system and its stability."

Hurricane Ida Aftermath
A new White House report complies with President Joe Biden’s May executive order that asked the government to examine how the nation’s economy could be affected by the impacts of climate change, which has forced the U.S. to contend with increasingly severe heat, flooding, storms and wildfires. A sign for a beach resort rests among storm debris in the wake of Hurricane Ida on September 4 in Grand Isle, Louisiana. Sean Rayford/Getty Images