By Seth Gellman
There have been worries about the US economy and how it will be impacted for decades. Speculation has run wild as the world tries to combat climate change. The future is looking increasingly uncertain for the largest economy in the world if climate change isn’t combatted swiftly, but seldom has it been put into words of the disaster that will come if climate change isn’t stopped.
A report released by the US Commodities Future Trading Commission on September 9th gave an idea of what that future might look like. There is a disclaimer stating that the conclusions of the report do not reflect the views of the CFTC or government.
Climate change is already accredited for destructive weather events across the U.S., from severe floods to raging wildfires. The report contradicts President Trump’s downplaying of climate change and dismissal of it being an important issue, like when he pulled the U.S. out of the 2015 Paris Agreement, and agreement that looked to attack climate change more aggressively.
The report claims that “Climate change impacts could impair the productive capacity of the economy and undermine its ability to generate employment, income, and opportunity.” The report also warns of financial stress in which credit is limited if climate change continues on the path it is taking.
Rostin Behnam, the democratic commissioner of the CFTC, hopes that the report will change the views of the administration and open their eyes to what a threat climate change is.
Environmental groups stressed the need to combat climate change in light of the new report, but others struck a different tone. Republican CFTC Chairman Heath Tarbert said that while there are risks of climate change and letting it get out of control, the impact of transitioning to a green economy too quickly may be equal, if not worse without the right pace.
Another aspect of the economy that the report analyzes is the potential shock this could have on the U.S. economy. This could be amplified by the fact that Corporate America is sitting on a lot of debt, leaving some industries vulnerable.
The CFTC subcommittee issued 53 recommendations for how to deal with the situation, including forcing companies to disclose details on their greenhouse gas emissions, and requiring banks to address the financial risks of climate change.
The CFTC says that the most important step is for the United States to set a fair price on carbon. There have been debates about a potential carbon tax for decades. Many companies, including fossil fuel giant ExxonMobil support a carbon tax to get some clarity on a regulatory future.
Overall, the report is extremely concerning for the US economy and its future. Despite the future looking gloomy, there are ways to combat climate change to ensure the best possible outcome. The report stresses the need for a Carbon tax, a mandate forcing companies to disclose their greenhouse gas emissions, and a requirement for banks to address the financial risks of climate change. Many are optimistic about the progress already made toward climate change, but there is still a long way to go.
