Comment Text:
(1) whether climate change poses systemic risks to our economy
Climate change presents two types of immediate risk to the financial sector, and therefore to the economy as a whole. These are: i) ‘transition’ risk, meaning the revaluation of assets due to changes and costs associated with the shift to a low-carbon economy, and ii) ‘physical’ risks, meaning the damage and resultant loss in value that occurs due to weather and climate-related events. An additional subsequent risk is the higher leverage across the private sector that will likely result from an attempt to compensate for output and capital losses from climate change.
