WASHINGTON (Reuters) – A high U.S. commodities regulator stated on Wednesday local weather change poses a serious market threat and urged federal authorities motion to deal with it, placing him at odds with the Trump administration which has usually dismissed the problem.
Rostin Behnam, one in every of 5 commissioners of the Commodities Futures Buying and selling Fee, made the feedback at a public assembly targeted on monetary dangers. He stated he’ll type a particular committee tasked with writing a report later this 12 months analyzing the threats and proposing motion.
“The impacts of local weather change have an effect on each facet of the American financial system – from manufacturing agriculture to business manufacturing and the financing of each step in every course of,” Behnam stated in his opening remarks on the assembly of the CFTC’s market threat advisory committee.
“As many of the world’s markets and market regulators are taking steps in the direction of assessing and mitigating the present and potential threats of local weather change, we within the U.S. should additionally demand motion from all segments of the private and non-private sectors, together with this company,” Behnam stated.
He cited a report $160 billion in world financial prices in 2018 from pure disasters and identified that the current excessive climate throughout the U.S. Midwest had led to devastating floods and tornadoes, lowering crop yields, hitting business manufacturing, and making markets unstable.
“Our commodity markets and the monetary markets that help them will endure if we don’t take motion to mitigate the danger of contagion,” he stated.
Behnam stated local weather change can have an effect on customers of derivatives markets starting from insurers to business banks and farmers.
White Home spokesman Judd Deere declined to remark.
The Trump administration has suppressed federal scientific analysis on local weather change and different company regulators have stated it was not a precedence.
Behnam, who was nominated as a commissioner by President Donald Trump in 2017, in contrast local weather change to the 2008 monetary disaster, which he stated confirmed the interconnectedness of the worldwide monetary system.
“All threat evaluation, together with threat derived from local weather change, should embody a holistic examination of the systemic relationships all through all of our monetary markets,” he stated.
Two Democrats on the Senate Banking Committee, Hawaii Senator Brian Schatz and Ohio Senator Sherrod Brown, applauded Behnam’s initiative, urging him to collaborate with heads of 36 central banks growing a joint local weather threat evaluation.
They stated they need different U.S. banking and securities regulators to comply with Behnam’s lead.
Reporting by Valerie Volcovici; Modifying by Richard Chang