Washington DC – Senators Sheldon Whitehouse (D-RI) and Jeff Merkley (D-OR) released the following statement today regarding the next nominee to chair the Federal Reserve:
“Jerome Powell refuses to recognize climate change as an urgent and systemic economic threat. During his tenure, Chair Powell first ignored climate change and then resisted calls for the Fed to use its tools to fight it, arguing that climate change ‘is really an issue that is assigned to lots of other government agencies, not so much the Fed.’ At a hearing earlier this year, he said: ‘we are not and we don’t seek to be climate policymakers.’
“The economic fallout from climate change is already underway. Rising temperatures and sea levels are making hurricanes, droughts, and other weather events more severe, frequent, and destructive. These events are destroying homes, roads and bridges, and other physical and financial assets. As FreddieMac warns, ‘rising sea levels and spreading flood plains […] appear likely to destroy billions of dollars in property and to displace millions of people. The economic losses and social disruption […] are likely to be greater in total than those experienced in the housing crisis and Great Recession.’
“Climate is not a long-term challenge for the Fed; it demands action now. Climate effects exacerbate supply chain struggles and commodity price volatility. Many large financial actors have large exposures to assets that threaten to plunge in value due to climate change or the transition to a low-carbon economy. Institutions unprepared for this transition stand to lose billions, threatening their balance sheets and the stability of our financial system. Price stability, the safety and soundness of our financial system, and millions of jobs and businesses – all of which are squarely in the Fed’s madate – are at stake.
“President Biden must appoint a Fed Chair who will ensure the Fed is fulfilling its mandate to safeguard our financial system and shares the Administration’s view that fighting climate change is the responsibility of every policymaker. That person is not Jerome Powell.”