This story about the challenges climate change is creating for coastal SC is a great distillation of why it's so important for our financial regulators to start treating climate change as a systemic risk. Brief thread: nytimes.com/2021/03/14/cli…
1/ First, this quote says everything you need to know about what happens if we stay on the course we are on. 
2/ So here's a community where parts of beaches are shrinking by 14' a year, trying to figure out whether they are willing to raise the property taxes necessary to elevate the main road. That sisyphyean question is question is at the heart of system climate financial risk
3/ To wit: we know massive losses of capital are coming. What we don't know is who gets left holding the financial bag. Local tax payers may pay for this project... but the ocean is still rising until we get climate change under control.
4/ So what's the next shoe to drop? Will it be loss of coastal properties? If so, who will be holding the mortgages at that point? The bank who wrote the mortgage? The one they sold it to? Someone who collateralized it? Fannie and Freddie?
5/ How about the property risk? Will the home insurance policies cover the loss, or will it get punted to the National Flood Insurance program? How much of that insured risk has been passed to the reinsurance industry?
6/ Lots of property insurance programs are short duration, written one year at a time. Will insurance companies continue to write those policies or will home owners suddenly find themselves unable to renew, leaving them (and their lenders) fully exposed?
7/ What if people start proactively moving to higher ground now? What does that do to the local tax base? How will schools and other local services be provided to those who can't afford / choose not to relocate? Who will be expected to backstop that risk?
8/ These are thorny questions, but they are all the questions that we have to grapple with in a rapidly warming world. And there are just as many financial dislocations to think about in a world that moves proactively to slow/reverse climate change.
9/ After all, a rapid shift from fossil fuels to renewables implicitly requires a massive write-down of assets on oil/gas/coal company balance sheets. A shift in labor markets from coal mining to PV array installation implies big geographic shifts in economic activity
10/ This is why @SenFeinstein and I introduced the Addressing Climate Financial Risk Act last month. casten.house.gov/media/press-re…
11/ And why @brianschatz and I introduced the related (but slightly different) Climate Change Financial Risk Act of 2019 last session. casten.house.gov/media/press-re…
12/ We know these physical changes are upon us. We know smart, capitalist market actors are going to respond to protect their investors from that risk. It is urgent we do the analysis to understand how that will affect our financial system to protect the rest of the economy.
13/ In short, we need to stop "masking a problem that never gets fixed." /fin
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