The Financial Stability Oversight Council met Thursday to identify and address climate-related financial risks.
The FOC published a comprehensive report on climate-related financial risks last year and made dozens of best-practice recommendations to US financial regulators to identify and address climate-related risks to the financial system. The council said Thursday it would advance work to advance the financial system’s resilience to climate risks.
The FSOC also planned to announce Thursday the creation of the “Climate Data and Analytics Hub,” an independent agency housed in the Treasury’s Office of Financial Research. The hub allows participants to integrate wildfires, crop condition, precipitation and other climate-related data with financial data.
Among the efforts the FSOC set out in a factsheet ahead of Thursday’s meeting was to improve public climate-related disclosures, assess and mitigate climate-related risks that could threaten US financial stability, and fill climate-related data and methodological gaps.
“As part of its legal mission to identify and respond to emerging threats to U.S. financial stability, the FSOC remains committed to building on and accelerating efforts to address climate-related financial risks and protect the financial system from those risks,” according to the fact sheet. . “The FSOC and its members will continue their work to improve coordination, build capacity and promote the resilience of the financial system to the risks of climate change.”
Ohio will need to increase annual municipal spending by between $1.8 billion and $5.9 billion by mid-century to adapt to the challenges of climate change.
That’s a conservative estimate from a new report by the Scioto Analysis research group. The public policy report, The Bill is coming due: Calculating the Financial Cost of Climate Change to
Ohio’s Local Governments, notes that most of the costs of climate change are expressed in 2021 dollars — meaning inflation alone will drive that cost up.
In addition, the amounts quoted represent only 10 of the 50 securities identified by the report, as the other statewide costs are difficult to calculate. In other words, the overall increase in annual municipal government spending due to climate change is likely much higher than the report suggests, according to the report’s authors.
The report breaks the annual estimated cost impacts of climate change into categories, including: Drinking water treatment ($580 million to $2.2 billion); raising roads ($860 million to $1.7 billion); road repair ($170 million to $1 billion); cooling centers ($52 million to $590 million); stormwater management ($140 million to $150 million).
The report suggests that municipalities should consider alternatives to raising taxes or seeking help from the federal government to address the impacts of climate change.
“Rather than relying on taxpayers to bear these costs, policymakers could consider alternative sources of finance, such as holding the companies most responsible for causing and exacerbating climate change accountable, and ensuring that they have a fair share of the costs of adaptation and resilience, like many Ohio communities, have held opioid manufacturers responsible for the costs of the opioid crisis,” the report states.
Aon & fingerprints of climate change
A new report from Aon said “the fingerprints of climate change” were clearer in individual weather events and longer-term temperature and precipitation trends in the first half of 2022.
The report was published by Impact Forecasting, Aon’s catastrophe model development team, and covered this week in an article in Insurance Journal.
According to the report, insured losses from global natural disasters were estimated at $39 billion in the first half of the year. That was 18% higher than the $33 billion average in the 21st century, thanks in large part to ongoing severe convective storm events, which accounted for 54% of total insured losses in the US and Europe alone, according to Aon.
There were 197 notable natural disasters recorded by Impact Forecasting during the period, above the 21st-century average of 192, with seasonal flooding in China being the costliest loss event at $8.7 billion.
“From a hazard perspective, the fingerprints of climate change became increasingly apparent in the behavior of individual events and the longer-term temperature and precipitation trends in 1H 2022,” the report said. “Warmer-than-average temperatures were reported across a wide area of the world, helping more unusual weather patterns already set in motion by the primary influence of La Niña conditions that have been going on for nearly three consecutive years.”
sea level rise
Future sea level rise could expose about 720,000 more people to flooding in New York City, Washington, D.C. and Miami-Dade County over the next few decades, according to an NPR analysis based on models from the National Hurricane Center for the three regions.
The analysis used Hurricanes Sandy, Isabel and Irma as benchmarks to understand how storm surge effects could increase.
“In all three regions, flooding from storm surge that once lingered along the coast travels miles inland and deeper,” an NPR piece says about the analysis.
According to the analysis, by 2080, when sea level rise could reach more than one meter, floods could inundate even more critical infrastructure, including hospitals and schools that often provide shelter.
In Miami-Dade, an NPR analysis using data from the 2020 census found that the number of people at risk could nearly double by 2080 based on NOAA’s likely sea level rise of just over 2.5 feet.
NPR’s analysis shows that the number of people in New York at risk of flooding could grow from about 207,000 in 2020 to 468,000 in 2080.
The analysis found that things were much less grim for Washington, DC, where sea level rise means 2,100 residents are likely to be threatened by a massive storm in 2080, up from 600 people in 2020.