As Warning Signs of Economic Impacts of Climate Change Grow, Federal Reserve Exits NGFS
WASHINGTON – The U.S. Federal Reserve today announced it would leave the Central Banks and Supervisors Network for Greening the Financial System (NGFS), the network of central bankers from around the world responsible for developing and implementing environment and climate risk management in the financial sector.
The move comes less than a day after data from the U.S. Treasury highlighted alarming trends of rising insurance costs in climate-vulnerable areas that could lead to potentially “significant consequences” for “local governments” and real estate lenders and investors. The announcement also coincides with a warning from risk experts that climate change could cut global economic output in half by the end of the century.
In response, Elyse Schupak, policy advocate with Public Citizen’s Climate Program, issued the following statement:
“The Federal Reserve’s decision to withdraw from NGFS just days before Donald Trump’s inauguration reflects the chilling effect the incoming administration is already having on the ability of the Fed to act independently. The timing of the announcement highlights the selectiveness with which Chair Powell applies his commitment to Fed independence.
“The Financial Stability Oversight Council and Powell himself have acknowledged climate change as an emerging threat to financial stability—a threat which will persist regardless of the Trump Administration’s willingness to acknowledge it. Chair Powell often emphasizes the Fed’s narrow scope to act on climate risk—a scope which is clearly malleable and can be further narrowed in the face of political pressure from the far right.”
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