As this summer’s horrific fire season rages, a report commissioned by the Trump administration’s bipartisan Commodity Futures Trading Commission warns of financial upheaval due to climate change and states its fundamental finding:
“Financial markets will only be able to channel resources efficiently to activities that reduce greenhouse gas emissions if an economy wide price on carbon is in place at a level that reflects the true social cost of those emissions.”
The report was authored and unanimously endorsed by a diverse Climate-Related Market Risk Subcommittee that included representatives from major corporations and financial firms including Morgan Stanley, BP, World Resources Institute, Dairy Farmers of America, Environmental Defense Fund, JPMorgan Chase, Vanguard, Citigroup, Cargill, and others. Engagement in advancing carbon pricing policy by corporations has been generally limited to date. This report could mark a turning point. Its commissioning and conclusion signals an increased awareness of the potentially ruinous financial consequences of failing to address climate change.
While the findings of the report are not necessarily new to the recipients of this email, this report is momentous because it is the first wide-ranging federal government report analyzing the threat of climate change on US financial markets. Furthermore, the authoring of this report by representatives of a number of America’s largest corporations hopefully signals their willingness to meaningfully begin supporting a price on carbon. A number of businesses already support carbon pricing. In the Pacific Northwest, the Low Carbon Prosperity Institute and Oregon Business for Climate represent pro-carbon pricing business.