FORBES | When we talk about the long-term risks of climate change, it’s hard for the American public, for company executives, and for lawmakers alike to accurately picture what the implications of climate inaction will mean ten, twenty, or fifty years from now. We hear stories of worst-case scenarios, but sometimes it sounds more like science-fiction than reality.
To better understand this issue, I turned to my friend Bob Litterman, a financial risk expert who managed risk for Goldman Sachs for two and a half decades. He explained that, “Financial risk management has several simple principles that apply to managing climate risk.” First, it involves identifying the “worst case” scenarios. Second, the objective of financial risk management isn’t to minimize risk, but rather to price and allocate risk appropriately. Third, is recognizing the value of time – it’s a scarce resource. Let’s examine these three principles more closely in relation to climate change.
Imagining “Worst Case” Scenarios
We know climate risks are large, but just how large is hard to anticipate. Traditional risk-modeling techniques rely on historical data to make future projections – but we are in uncharted territory. Human-caused climate change has a short history, surging in the mid-20th century through present day, and its impact is cumulative, building year to year. According to NASA atmospheric scientist David Crisp, “Half of the increase in atmospheric carbon dioxide concentrations in the last 300 years has occurred since 1980, and one quarter of it since 2000.” And unlike some other gases, carbon dioxide stays in the atmosphere for centuries, between 300 to 1,000 years. Regulators and financial market participants are handicapped in their ability to make informed decisions, as forward-looking analysis methodologies are still being developed.
Read more at Forbes: https://www.forbes.com/sites/billfrist/2023/07/10/what-financial-risk-management-has-to-do-with-climate-change–and-the-price-of-inaction/?sh=2670b7a33304
FORBES | According to recent data from the National Oceanic and Atmospheric Administration (NOAA) and NASA, 2022 tied as the fifth warmest year on record. Why does this matter? Well, a warming climate directly affects the health of you as an individual – and your family, communities, businesses, and our overall economy. We are seeing these effects now and scientists anticipate that they will grow.
Yes, climate change and changing weather patterns create an environmental crisis, but increasingly we are realizing they create a health crisis, and a food crisis, and ultimately a threat to our economic security and to the stability of our federal budget.
The budgeting agencies of both the White House (Office of Management and Budget) and the United States Congress (the nonpartisan Congressional Budget Office or CBO), have both projected sizable budgetary impacts from climate change. The CBO states it succinctly: “Climate change increases federal budget deficits, on net.” A reduction in economic output related to lower worker productivity and damage to physical capital and the corresponding drop in income and payroll taxes will create a drag on federal revenues, while mandatory and discretionary spending demands will increase.
Indeed, climate change touches nearly all aspects of what in the aggregate comprises our national economy. And it is through this policy lens of the federal budget (The author served on the Budget Committee of the U.S. Senate from 1995 until 2002 and testified before that committee on May 10, 2023) that our elected public officials are called upon to look to the future, assess, and react to public risk. While Congress is notorious for delaying action until absolutely necessary — as we saw with the recent debt limit debate — I hope our elected officials will begin in earnest to address climate change and its impact, as we are in uncharted territory and there will come an unpredictable time in the future when failure to act will balloon budget costs exponentially.
Read more at Forbes: https://www.forbes.com/sites/billfrist/2023/06/14/how-a-changing-climate-is-a-threat-to-the-stability-of-our-federal-budget/?sh=3d750c565650
THE HILL | New Year’s resolutions: chances are we’ve made — and broken — a few of them. And, chances are many of those resolutions have been related to our health: exercise more, eat better, stop smoking. But what if, in 2022, we resolved to improve our health by taking action against climate change?
According to recent data from National Oceanic and Atmospheric Administration (NOAA) and NASA, 2021 marked the sixth warmest year on record. Why does this matter? Well, a warming climate directly affects the health of individuals, communities, businesses and economies alike.
Climate change, if nothing else, is a background condition of our lives that shapes our health. As a social determinant of health, it is as much a public health crisis as it is an environmental and economic one. Things like access to clean air, clean and safe drinking water, healthy food supplies and housing are directly impacting our quality of life, as well as physical, mental and emotional health.
We’re seeing the effects of climate change on peoples’ health already — from increased cases of asthma in children to more heat-related illnesses like heat stroke and vector-borne diseases like malaria. If you’re not seeing these repercussions in your community now, chances are you will soon.
Read the full article here: https://thehill.com/opinion/healthcare/590394-your-health-and-you-thought-climate-change-was-not-about-you/