Opinion: How climate change could trigger the next financial crisis

[nitpicker]

https://www.marketwatch.com/story/how-climate-change-could-trigger-the-next-financial-crisis-2019-04-18?mod=newsviewer_click

Opinion: How climate change could trigger the next financial crisis

Published: Apr 18, 2019 6:02 a.m. ET

By Pedro Nicolaci da Costa

It’s only a matter of time before the Federal Reserve hires a chief climatologist.

After all, despite Wall Street humor about weather being a poor excuse for weak economic data, the pace of climate change is now clearly rapid enough to begin affecting economic forecasts. How long until forecasting gross domestic product depends crucially, fundamentally, on expected weather patterns?

Officials are already thinking about these issues. Several government and private institutions have tried to model the effects of climate change on economic growth.

“Many central banks already include climate change in their assessments of future economic and financial risks when setting monetary and financial supervisory policy,” writes Glenn Rudebusch, senior policy adviser and executive vice president at the San Francisco Fed.
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It’s not just Fed researchers paying attention to the weather. Big money managers are also pretty frightened of the potential consequences. Late last year, a group of 415 investors with $32 trillion in assets-under-management issued a joint call to action on climate.

Its warning was rather dire:

“Without greater action, Schroders, which is a signatory to the statement, point to long-run temperature rises of around 4°C, with $23 trillion of associated global economic losses over the next 80 years. This is permanent economic damage three or four times the scale of the impacts of the 2008 Global Financial Crisis, while continuing to escalate.”

Insurance companies have already warned global property prices could slump, potentially tripling losses on those investments over the next 30 years.
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