The Biden Administration continued to work this week on an aggressive goal to slash U.S. carbon emissions in half by 2030, as the Fed announced plans to monitor climate change threats to the financial system. (Bloomberg, March 23 and E&E News, March 24)
A National Effort
- White House Climate Advisor Gina McCarthy is leading a National Climate Task Force that will finalize U.S. goals and commitments before participating in an April 22 virtual global climate summit on Earth Day. (White House Readout of the Second National Climate Task Force Meeting, March 18)
- The government-wide effort includes input from 21 federal agencies and industrial sectors, ranging from car manufacturers to aviation to the oil industry. (The Hill, March 22 and E&E News, March 23)
- The prospects for both chambers of Congress to pass legislation that puts a price on carbon are still remote, even though key business groups such as the U.S. Chamber of Commerce and the American Petroleum Institute have now come out in favor of “market-based” climate policy. (Axios Generate, March 26)
Climate Change and Real Estate
- Federal Reserve Governor Lael Brainard this week emphasized the impact climate change could have on real estate markets. She stated during a March 23 speech, “… the usability of real estate in many areas will be directly affected by the increased risks of floods, wildfires, severe storms, and sea-level rise associated with climate change.”
- She added, “Sudden realizations of climate-related risks could cause rapid shifts in investor sentiment and shocks to asset prices.” (Financial Stability Implications of Climate Change speech by Gov. Brainard, March 23)
- Brainard announced the Fed has established new oversight committees “to identify, assess, and address climate-related risks to financial stability.”
- Fed Chairman Jerome Powell and Treasury Secretary Yellen also commented on their increased attention to the risks posed by climate change during a March 23 hearing before the House Financial Services Committee and a March 24 Senate Banking, Housing and Urban Affairs Committee hearing.
- Secretary Yellen will lead the first meeting of the Financial Stability Oversight Council under the Biden administration on March 30 to discuss climate-related financial risks. (The Hill, March 24)
The administration’s climate policy plans and their impact on CRE will be a focus of discussion during The Roundtable’s Spring Meeting on April 20 (held remotely).
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