March 11, 2020 - Issue: Vol. 166, No. 47 — Daily Edition116th Congress (2019 - 2020) - 2nd Session
All in Senate sectionPrev18 of 48Next
CLIMATE CHANGE; Congressional Record Vol. 166, No. 47
(Senate - March 11, 2020)
Text available as:
Formatting necessary for an accurate reading of this text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.
[Pages S1694-S1697] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] CLIMATE CHANGE Mr. WHITEHOUSE. Mr. President, I rise today for ``Time to Wake Up'' speech No. 258 and my increasingly battered chart here to urge colleagues in the Senate to wake up and see the looming danger we face from climate change. Just look at the recent climate effects in our Southern Hemisphere. The most devastating wildfires anyone can remember have ripped across Australia, burned more than a fifth of Australia's forests, destroying thousands of homes, killing an estimated 1 billion animals, and making a day of breathing air in Sydney like smoking 37 cigarettes. In the ocean off Australia, there are new warnings that the Great Barrier Reef--a Wonder of the World visible from space--is doomed. The warmest temperatures ever were recorded in Antarctica--a 70- degree day when the average February temperature would be 33 degrees. Here is the Thwaites Glacier. Here on Antarctica's Thwaites Glacier, scientists drilled through 2,000 feet of ice, down to the ocean water below, and discovered water 2 degrees above freezing. With 70 degrees above and 2 degrees above, it is a melting sandwich. Losing that glacier would trigger almost 3 feet of sea level rise, and that glacier is going. Sea level rise brings me to the crash warnings that are the subject of this speech, crash warnings that are flashing throughout the economy. Sea level rise connects to these crash warnings because some of these crash warnings revolve around sea level rise in its crashing coastal property values. Other warnings are of a crash in what economists call the carbon bubble. I have a binder of these warnings that I put together, and I sent this binder to every Member of the Senate in February of 2019. Every Senator has all of the warnings that are compiled in that binder. I have a letter, too, that follows up on the warnings in that binder-- just about the warnings that have emerged since February of 2019--in fact, mostly just from this year. I sent this letter to all of the members of the Senate Banking Committee because the economic crashes that are warned of are within the Senate Banking Committee's jurisdiction, and that committee has the responsibility to be the distant early warning system for the rest of us in the Senate about these warnings. Mr. President, I ask unanimous consent to have printed in the Record the letter to the Committee on Banking, Housing, and Urban Affairs, dated February 6, 2020. There being no objection, the material was ordered to be printed in the Record, as follows: U.S. Senate, Washington, DC, February 6, 2020. Hon. Mike Crapo, Chairman, Committee on Banking, Housing and Urban Affairs, U.S. Senate, Washington, DC. Hon. Sherrod Brown, Ranking Member, Committee on Banking, Housing and Urban Affairs, U.S. Senate, Washington, DC. Dear Chairman Crapo and Ranking Member Brown: With the impeachment procedure behind us, we return to regular work, and I write to bring your attention to further financial warnings related to the climate crisis. [[Page S1695]] You will recall that I wrote to you on December 2, 2019 about climate-related warnings emanating from the financial and regulatory community. The two lead warnings were of a coastal property value crash (which Freddie Mac has warned could be worse than the 2008 mortgage meltdown), and a carbon asset bubble crash (described by U.K. financial regulator the Bank of England as a ``systemic risk''--meaning the crash could cascade beyond fossil fuel companies out into the global economy). A copy of that letter is attached for you as a reference. The warnings continue. The Bank for International Settlements, described sometimes as the bank of the central banks, has published a report, ``The Green Swan: Central banking and financial stability in the age of climate change.'' This report recognizes and reinforces the many previous warnings that ``[c]limate change could . . . be the cause of the next systemic financial crisis'' (p. 1), and that ``[c]entral banks, regulators and supervisors have increasingly recognised that climate change is a source of major systemic financial risks'' (p. 65, emphasis added), indeed that ``climate catastrophes are even more serious than most systemic financial crises.'' (p. 3) The ``Green Swan'' report goes on to describe the stunning scale of these risks: that ``[e]xceeding climate tipping points could lead to catastrophic and irreversible impacts that would make quantifying financial damages impossible.'' (p. 1, emphasis added; in an odd coincidence, that language mirrors President Trump's 2009 warning in a New York Times ad that climate change consequences would be ``catastrophic and irreversible.'') The ``Green Swan'' report warns that this risk is so extreme because the risk is dual, and so dangerous because it is so unpredictable: ``The complex chain reactions and cascade effects associated with both physical and transition risks could generate fundamentally unpredictable environmental, geopolitical, social and economic dynamics.'' (p. 3, emphasis added). Like the ``black swans'' from which this report derives its title, ``both physical and transition risks are characterised by deep uncertainty and nonlinearity, their chances of occurrence are not reflected in past data, and the possibility of extreme values cannot be ruled out.'' (p. 3, emphasis added). The ``Green Swan'' report warns that this dangerously unpredictable risk can put our financial stability in danger, citing ``growing awareness'' that these ``physical and transition risks . . . would affect the stability of the financial sector.'' (p. 65); and could be irremediable by ordinary methods. The impact could be so great as to ``make quantifying financial damages impossible,'' (p. 1), the effects would be ``catastrophic and irreversible'' (p. 1), and these ``climate-related risks will remain largely unhedgeable as long as system-wide action is not undertaken.'' (p. 1) In this looming, ominous cloud of danger and uncertainty, one thing is certain. ``[T]here is certainty about the need for ambitious actions despite prevailing uncertainty regarding the timing and nature of impacts of climate change.'' (p. 3) The report identifies ``an array of actions'': ``The most obvious ones are the need for carbon pricing and for systematic disclosure of climate-related risks by the private sector.'' (p. 2, emphasis added). To achieve this safe and certain path, the report calls urgently for an end to ``[t]he procrastination that has been the dominant modus operandi of many governments for quite a while.'' (p. 66) (As you know, I take the position that our procrastination in Congress has been acquired by the fossil fuel industry through its armada of front groups and dark money channels, which will make the procrastination all the more blameworthy when the full story emerges.) The stem warning of the ``Green Swan'' report, and the certain path to safety from the hazard, are echoed in a recent open letter from BlackRock CEO Larry Fink. In his letter to CEOs, Fink notes that ``[c]limate change has become a defining factor in companies' long-term prospects,'' and that as a result ``we are on the edge of a fundamental reshaping of finance'' (emphasis in original), one that is ``compelling investors to reassess core assumptions about modem finance.'' This extraordinary language is based, as in the ``Green Swan'' report, on the dual nature of the hazard, ``of how climate risk will impact both our physical world and the global system that finances economic growth.'' The conclusion is harsh: ``In the near future--and sooner than most anticipate--there will be a significant reallocation of capital.'' (emphasis in original) The phrase ``significant reallocation of capital'' couches in bland economic terms a dramatic and painful human prospect. BlackRock also agrees on the safe path: that ``government must lead the way in this transition,'' and that ``the scale and scope of government action'' is ``one of the most important questions.'' In this regard, ``carbon pricing [is] essential to combating climate change.'' (emphasis added) In addition to the BIS ``Green Swan'' report and the BlackRock letter, in the time since my last letter the following organizations have also brought similar warnings forward. On December 18, 2019, the Bank of England published a discussion paper outlining its proposal for climate stress tests for corporations under its regulatory supervision. In January 2020, the management consultancy McKinsey released a comprehensive report on the physical risks of climate change. McKinsey warns that climate change could ``make long-duration borrowing unavailable, impact insurance cost and availability, and reduce terminal values.'' It could ``trigger capital reallocation and asset repricing.'' On January 15, 2020, the World Economic Forum's Global Risks Report identified the top five most likely risks facing the world over the next 10 years, and all were climate-related risks. A January 2020 report from the Stanford Graduate School of Business notes that ``the financial risks from climate change are systemic'' and ``singular in nature,'' and ``[g]lobal economic losses from climate change could reach $23 trillion--three or four times the scale of the 2008 financial crisis.'' Given the scope and scale of these warnings, and given that Senators depend on the Banking Committee as our official eyes and ears into such hazards, I hope that the Committee will rapidly hold searching and fair hearings about these danger warnings. Sincerely, Sheldon Whitehouse, U.S. Senator. Mr. WHITEHOUSE. Mr. President, the warnings are serious. They come from some of our foremost financial experts. So let's walk through what we have in store if we keep sleepwalking through the climate crisis. As I said, warning No. 1: coastal property value crash. Freddie Mac, not an environmental organization but a giant mortgage company, warned that rising sea levels will prompt a crash in coastal property values that will be worse than the housing crash that triggered the 2008 financial crisis. First Street Foundation found that rising seas have already caused $16 billion in lost property values in coastal homes from Maine to Texas. Moody's, the bond rating agency, warned that climate risk will trigger downgrades in coastal communities' bond ratings. BlackRock--the biggest asset manager in the world--estimated that, by the end of the century, climate change will cause coastal communities annual losses that will average up to 15 percent of local GDP with the hardest hit communities, obviously, hit far worse. Hello, Florida. Warning No. 2: a carbon asset bubble crash. The Bank of England, the Bank of France, the Bank of Canada, and the European Central Bank--all backed by top-tier, peer-reviewed economic papers--all warn that fossil fuel assets are dramatically overvalued on fossil fuel companies' books, that these assets are actually uneconomic and will become stranded, and that the resulting ``carbon asset bubble'' crash will swamp the world economy. How bad is it? It is called systemic financial risk. Systemic financial risk is finance speak for risk to the entire economic system. Do you remember the 2008 financial crisis? Bad home mortgages blew up more than mortgage companies; they caused a brutal economic recession, and millions of people lost their jobs, their homes, and their retirement savings. We are still recovering from that collapse. That is a systemic financial crisis, and the warnings are that this one will be worse. In my recent letter, I looked at the more recent warnings. Here is the Bank for International Settlements' recent Green Swan report. The title is a reference to the metaphor of a black swan--an unpredictable event with calamitous consequences for the economy. Below is what my letter to the Banking Committee quoted from this Green Swan report. Page No. 1 warns: ``[c]limate change could . . . be the cause of the next systemic financial crisis.'' From page No. 65: ``Central banks, regulators and supervisors have increasingly recognized that climate change is a source of major systemic financial risks,'' and ``climate catastrophes are even more serious than most systemic financial crises.'' Again, from page No. 1: ``Exceeding climate tipping points could lead to catastrophic and irreversible impacts that would make quantifying financial damages impossible.'' Let's slow down and do that one again: ``Exceeding climate tipping points could lead to catastrophic and irreversible impacts that would make quantifying financial damages impossible.'' As a little aside here, it is an odd coincidence that the report's language of ``catastrophic and irreversible'' mirrors President Trump's warning in a New [[Page S1696]] York Times ad in 2009 that the consequences of climate change would be catastrophic and irreversible--the same words, ``catastrophic and irreversible.'' This was said by Trump in 2009 and was written in the Bank for International Settlements' Green Swan report just 2 months ago. Back to the Green Swan report, on page No. 3: ``The complex chain reactions and cascad[ing] effects associated with both physical and transition risks could generate fundamentally unpredictable environmental, geopolitical, social and economic dynamics.'' Fundamentally unpredictable economic dynamics? Fundamentally unpredictable social dynamics? Again, on page No. 1: ``climate-related risks will remain largely unhedgeable as long as system-wide action is not undertaken.'' Back to page No. 3 again: Like the black swans from which the report derives its title, the ``physical and transition risks are characterised by deep uncertainty and nonlinearity, their chances of occurrence are not reflected in past data, and the possibility of extreme values cannot be ruled out''--the possibility of extreme values. Another big warning that I quoted in my letter to the Banking Committee came from BlackRock CEO Larry Fink. In his open letter to CEOs, Fink echoes the Green Swan warning, writing: ``[c]limate change has become a defining factor in companies' long-term prospects.'' As a result, ``we are on the edge of a fundamental reshaping of finance,'' one that is ``compelling investors to reassess core assumptions about modern finance.'' Folks, BlackRock is the biggest asset manager in the world. When its CEO speaks of a fundamental reshaping of modern finance and a shaking of its core assumptions, that is serious stuff. In my letter, I cite other recent warnings of this systemic financial risk, all since I distributed the binder, many just this year. Here are a few instances. In December, the Bank of England proposed climate stress tests for corporations under its regulatory supervision. We started bank financial stress tests after the 2008 mortgage crisis, and central banks are starting to do the same for the climate crisis. In January, massive management consultant McKinsey--again, not a green group but, presumably, a pretty smart group--warned that climate change could ``make long-duration borrowing unavailable, impact insurance cost and availability, and reduce terminal values.'' Climate change could ``trigger capital reallocation and asset repricing,'' which is finance speak for the fundamental upheaval of our economy. January: The World Economic Forum puts out its Global Risks Report that identifies the five most likely global risks facing the world over the next 10 years. Five for five, every single one of them was climate related--all five. Finally, from the Stanford business school's Corporations and Society Initiative is a report that warns ``the financial risks from climate change are systemic''--there is that word again, ``systemic''--that these risks are ``singular in nature,'' like the green swan-black swan warning, and that ``[g]lobal economic losses from climate change could reach $23 trillion--three or four times the scale of the 2008 Financial Crisis.'' Pause for a moment, and recall the agony of the 2008 financial crisis. Losses in the stock market wiped out nearly $8 trillion. Housing values cratered; retirement savings vanished; and Americans lost jobs, lost homes, and lost nearly $10 trillion in wealth. Global economic growth went negative. We all went home to States where we witnessed extraordinary human suffering. Three or four times that? The Stanford report is telling us that we are courting financial peril-- systemic risk--the likes of which we cannot imagine. Climate change is a natural force. It has blown carbon dioxide levels way outside what humankind has ever experienced. It is depositing the equivalent of four Hiroshima-sized atomic bombs of excess heat per second into our oceans--per second--and it is an economic bomb positioned beneath our economy, its detonator ticking down steadily. We have a chance to defuse the bomb. With all of these warnings that I have described in this binder and that I have described in my letter to the Committee on Banking, Housing, and Urban Affairs comes a clear description of the solution: Government must act. Here are the solutions that I quote in my letter to the Committee on Banking, Housing, and Urban Affairs. On page No. 66 of Green Swan: End ``[t]he procrastination that has been the dominant modus operandi of many governments for quite a while.'' By the way, here, it really hasn't been procrastination; it has been obstruction. It has been obstruction by the fossil fuel industry, its money, and its minions. Clearly, we haven't done anything serious about it, so that has to end. On page No. 2 of the Green Swan: ``The most obvious ones are the need for carbon pricing and for systematic disclosure of climate-related risks by the private sector.'' It is, indeed, obvious to people in the financial sector. It is only not obvious to us because fossil fuel money swirls all around this place, trying to convince us that the obvious isn't true. Yet BlackRock CEO Fink's letter echoes that call for carbon pricing. He says, ``carbon pricing [is] essential to combating climate change.'' So we have the warnings, and we have the solutions. We have everything except the will to act. The reason we don't have the will to act is because we have dark money, political predators controlling our behavior in ways that are deeply, deeply inappropriate. Assume that these warnings are correct. When this blows, Senators who didn't help us act will have to come up with a better excuse than: Well, we weren't warned--because we were warned. We have been warned over and over and over again. We have been warned by experts. We have been warned by major financial institutions. We have been warned by the custodians of our economy, the central banks. Colleagues, you have the warnings in your inbox. When this blows up, when coastal property values crash, or when the carbon bubble bursts, or worse, when both happen--nothing says both can't happen--it is not going to look good to say: Yes, I was warned, but, you see, my political party is funded by the fossil fuel industry so naturally I did nothing. That is how you lose the privilege of representing people. It was a bit of a tempest in a teapot. It happened in Rhode Island 28 years ago, but I have lived through this. We had a financial crisis in Rhode Island in 1991. I was working for the Governor, who came in to have to clean up that horrible mess, and I was there for the following election after the financial crisis hit. The legislators who slept through the warnings lost their jobs in a tidal wave of popular outrage. In the subsequent election, the 1992 election, more than one-third of Rhode Island's General Assembly was either voted out or didn't even bother running again. There was a movie, when I went to law school, about the Harvard Law School. I think it was called ``One L.'' They brought in the freshman class of the One L class, and the crotchety old dean looked at them all and said: A third of you are going to be gone before you graduate because this is so demanding. Look to your right. Look to your left. One of you will not be here at graduation. When this thing blows, that is going to be a ``Look to your left. Look to your right. One of you won't be here afterwards'' moment here in the U.S. Senate. You think people are mad now, wait until this hits. Wait until these warnings come true, and they know you were warned. Wait for that. It is time to wake up. I yield the floor. I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. BOOKER. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BOOKER. Mr. President, before I begin my formal remarks, I just want to state that the Senate page class--I don't know if you have noticed--are better than adequate. They are doing a good job for the United States of America, and I appreciate them in their service to the U.S. Senate. [[Page S1697]] ____________________
All in Senate sectionPrev18 of 48Next