[MCN] As you know, the virus shock shows us what lies ahead "when the climate shock inevitably hits."

[Lance Olsen]

U.S. must prepare for 'climate shock,' experts warn
Avery Ellfeldt <https://www.eenews.net/staff/Avery_Ellfeldt>, E&E News reporter Published: Monday, March 30, 2020

Excerpts 
Economists and environmental advocates have long warned that climate change has the potential to trigger an unprecedented economic crisis.

That concern has endured even as the U.S. government races to rescue the economy from the novel coronavirus pandemic. In fact, they say authorities still are failing to prepare the financial system for a climate-fueled downturn — despite a fresh, firsthand view of how a global calamity can affect the world marketplace.

Top of mind is a $2.2 trillion coronavirus relief bill and several regulatory proposals that experts say don't account for climate risk that's ingrained in the financial system. A main criticism of these efforts is the continued support for carbon-intensive industries and the financial firms that help keep them churning.

The measure has been controversial. While proponents say it's essential to maintain liquidity in the financial sector, critics have described the provision as a "slush fund" for corporate America — including fossil fuel companies and the banks that fund them.

The climate-conscious among them say that's a perilous oversight because, absent dramatic emissions reductions, rising global temperatures could generate trillions of dollars in losses as soon as 2030, according to an analysis <https://www.mckinsey.com/business-functions/sustainability/our-insights/climate-risk-and-response-physical-hazards-and-socioeconomic-impacts> by McKinsey & Co. (Climatewire <https://www.eenews.net/stories/1062101299/>, Jan. 17).

"The Fed is propping up the market as a whole. So to the extent that any company will benefit from the Fed stepping in and buying its debt and lending to it, so, too, will fossil fuel companies," said Gelzinis. "It's not a unique benefit to oil and gas, but they certainly will benefit.”

"This period of stress is giving us a glimpse as to what's ahead of us in terms of an external shock from climate change," Gelzinis said.

The federal government, he added, should take bold steps to ensure the nation isn't "caught flat-footed when the climate shock inevitably hits."




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