03.12.20

Special Committee on the Climate Crisis Hears from Leading Experts on the Economic Risks of Climate Change

Former head of risk management for Goldman Sachs, former member of the Federal Reserve Board of Governors and Deputy Secretary of Treasury, and investor who predicted 2008 mortgage crisis testify

Washington, DC – On Thursday at the U.S. Capitol, Senator Sheldon Whitehouse (D-RI) and Chairman Brian Schatz (D-HI) led a Senate Democrats’ Special Committee on the Climate Crisis hearing entitled “The Economic Risks of Climate Change.”  Senate Democrats heard testimony from leading economists and climate experts, who warned them of the systemic economic risk associated with climate inaction.  As the costs associated with climate change increase, so do the risks.

***Watch the full video of the hearing here***

“Despite many warnings, the fossil fuel industry continues to overvalue their assets and put our financial systems at risk,” said Senator Whitehouse. “Listening to the experts is the best way to prevent another financial crisis.  I’m grateful to the witnesses for sharing their insights with the committee.”

Our foremost economists and financial institutions are sounding increasingly forceful warnings about the link between climate inaction and financial instability.  In January, the CEO of Blackrock—the largest asset manager in the world—warned in an open letter to CEOs that “[c]limate change has become a defining factor in companies’ long-term prospects,” and 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.”  Also in January, the Bank for International Settlements – known as the central bank of central banks – issued a report warning that “[c]limate change could … be the cause of the next systemic financial crisis.”   

Witnesses at Thursday’s hearing called for immediate action by Congress and corporate America.  Witnesses included David Burt, the CEO and Founder of DeltaTerra Capital who forecasted the 2008 mortgage crisis; Bob Litterman, chair of the Commodity Futures Trading Commission’s Climate Risk Working Group and former head of risk management for Goldman Sachs; Sarah Bloom Raskin, former member of the Federal Reserve Board of Governors; and Frédéric Samama, a co-author of the “Green Swan” report.

Copies of witnesses’ opening statements are available here:

  • Dave Burt, DeltaTerra Capital - Prepared Testimony
  • Bob Litterman, Kepos Capital; former head of risk management for Goldman Sachs; Chair, CFTC Climate Risk Working Group – Prepared Testimony
  • Sarah Bloom Raskin, former member of the Federal Reserve Board of Governors; former Deputy Secretary of the U.S. Department of the Treasury – Prepared Testimony
  • Frédéric Samama, Head of Responsible Investment, Amundi; co-author of “Green Swan: Central Banking and Financial Stability in the Age of Climate Change” – Prepared Testimony

Joining Whitehouse and Schatz for the hearing were Senators Michael Bennet (D-CO), Debbie Stabenow (D-MI), Chris Van Hollen (D-MD), and Jeff Merkley (D-OR).

The Special Committee on the Climate Crisis seeks to prioritize oversight and investigation of the efforts of special interests to foster climate denial; convene meetings and conduct outreach with frontline communities impacted by climate change, as well as experts from the environmental, national security, and finance and economic development communities.

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