Central banks

Climate disasters are now costing the United States US$150 billion per year, and the economic harm is rising. The real estate market has been disrupted as home insurance rates skyrocket along with rising wildfire and flood risks in the warming climate. Food prices have gone up with disruptions in agriculture. Health care costs have increased as heat takes a toll. Marginalized and already vulnerable communities that are least financially equipped to recover are being hit the hardest. Despite this growing source of economic volatility, the Federal Reserve – the U.S. central bank that is charged with maintaining economic stability – is not considering the instability of climate change in its monetary policy. Earlier this year, Fed Chair Jerome Powell declared unequivocally: “We are not, and we will not become, a climate policymaker.” Powell’s rationale is that to maintain the Fed’s independence from politics and political cycles, it should use...