One thing is clear after the failure of the Glasgow climate conference: the 1.5-degree Centigrade target is dead. Net zero by 2050 is not going to happen, yet, as part of its whole-of-government approach, the Biden administration is continuing to push the Fed and the SEC to incorporate climate financial risk into the way they regulate the financial system in order to deliver the administration’s goal of net zero by 2050.
The mandates given by Congress to the Fed and the SEC do not include climate policy. As I show in a report published by the RealClear Foundation last week, mandatory climate disclosures only make sense when viewed as part of the Fed and the SEC’s undisclosed and unlegislated green mandates and that climate financial risk is too nebulous a concept to have the sharpness required of a regulatory principle.
A couple of years ago, the Bank for International Settlements and the Banque de France – the founder of the Network for Greening the Financial System which the Fed joined after Donald Trump had lost the election – produced a book, The Green Swan. It’s full of tales of radical uncertainties, catastrophes and climate tipping points. There’s no timeline for the latter, but