[Congressional Record Volume 166, Number 47 (Wednesday, March 11, 2020)]
[Senate]
[Pages S1694-S1697]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             CLIMATE CHANGE

  Mr. WHITEHOUSE. Mr. President, I rise today for ``Time to Wake Up'' 
speech No. 258 and my increasingly battered chart here to urge 
colleagues in the Senate to wake up and see the looming danger we face 
from climate change.
  Just look at the recent climate effects in our Southern Hemisphere. 
The most devastating wildfires anyone can remember have ripped across 
Australia, burned more than a fifth of Australia's forests, destroying 
thousands of homes, killing an estimated 1 billion animals, and making 
a day of breathing air in Sydney like smoking 37 cigarettes. In the 
ocean off Australia, there are new warnings that the Great Barrier 
Reef--a Wonder of the World visible from space--is doomed.
  The warmest temperatures ever were recorded in Antarctica--a 70-
degree day when the average February temperature would be 33 degrees.
  Here is the Thwaites Glacier. Here on Antarctica's Thwaites Glacier, 
scientists drilled through 2,000 feet of ice, down to the ocean water 
below, and discovered water 2 degrees above freezing. With 70 degrees 
above and 2 degrees above, it is a melting sandwich. Losing that 
glacier would trigger almost 3 feet of sea level rise, and that glacier 
is going.
  Sea level rise brings me to the crash warnings that are the subject 
of this speech, crash warnings that are flashing throughout the 
economy. Sea level rise connects to these crash warnings because some 
of these crash warnings revolve around sea level rise in its crashing 
coastal property values. Other warnings are of a crash in what 
economists call the carbon bubble.
  I have a binder of these warnings that I put together, and I sent 
this binder to every Member of the Senate in February of 2019. Every 
Senator has all of the warnings that are compiled in that binder. I 
have a letter, too, that follows up on the warnings in that binder--
just about the warnings that have emerged since February of 2019--in 
fact, mostly just from this year. I sent this letter to all of the 
members of the Senate Banking Committee because the economic crashes 
that are warned of are within the Senate Banking Committee's 
jurisdiction, and that committee has the responsibility to be the 
distant early warning system for the rest of us in the Senate about 
these warnings.
  Mr. President, I ask unanimous consent to have printed in the Record 
the letter to the Committee on Banking, Housing, and Urban Affairs, 
dated February 6, 2020.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                  U.S. Senate,

                                 Washington, DC, February 6, 2020.
     Hon. Mike Crapo,
     Chairman, Committee on Banking, Housing and Urban Affairs, 
         U.S. Senate, Washington, DC.
     Hon. Sherrod Brown,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, U.S. Senate, Washington, DC.
       Dear Chairman Crapo and Ranking Member Brown: With the 
     impeachment procedure behind us, we return to regular work, 
     and I write to bring your attention to further financial 
     warnings related to the climate crisis.

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       You will recall that I wrote to you on December 2, 2019 
     about climate-related warnings emanating from the financial 
     and regulatory community. The two lead warnings were of a 
     coastal property value crash (which Freddie Mac has warned 
     could be worse than the 2008 mortgage meltdown), and a carbon 
     asset bubble crash (described by U.K. financial regulator the 
     Bank of England as a ``systemic risk''--meaning the crash 
     could cascade beyond fossil fuel companies out into the 
     global economy). A copy of that letter is attached for you as 
     a reference.
       The warnings continue.
       The Bank for International Settlements, described sometimes 
     as the bank of the central banks, has published a report, 
     ``The Green Swan: Central banking and financial stability in 
     the age of climate change.'' This report recognizes and 
     reinforces the many previous warnings that ``[c]limate change 
     could . . . be the cause of the next systemic financial 
     crisis'' (p. 1), and that ``[c]entral banks, regulators and 
     supervisors have increasingly recognised that climate change 
     is a source of major systemic financial risks'' (p. 65, 
     emphasis added), indeed that ``climate catastrophes are even 
     more serious than most systemic financial crises.'' (p. 3)
       The ``Green Swan'' report goes on to describe the stunning 
     scale of these risks: that ``[e]xceeding climate tipping 
     points could lead to catastrophic and irreversible impacts 
     that would make quantifying financial damages impossible.'' 
     (p. 1, emphasis added; in an odd coincidence, that language 
     mirrors President Trump's 2009 warning in a New York Times ad 
     that climate change consequences would be ``catastrophic and 
     irreversible.'')
       The ``Green Swan'' report warns that this risk is so 
     extreme because the risk is dual, and so dangerous because it 
     is so unpredictable: ``The complex chain reactions and 
     cascade effects associated with both physical and transition 
     risks could generate fundamentally unpredictable 
     environmental, geopolitical, social and economic dynamics.'' 
     (p. 3, emphasis added). Like the ``black swans'' from which 
     this report derives its title, ``both physical and transition 
     risks are characterised by deep uncertainty and nonlinearity, 
     their chances of occurrence are not reflected in past data, 
     and the possibility of extreme values cannot be ruled out.'' 
     (p. 3, emphasis added).
       The ``Green Swan'' report warns that this dangerously 
     unpredictable risk can put our financial stability in danger, 
     citing ``growing awareness'' that these ``physical and 
     transition risks . . . would affect the stability of the 
     financial sector.'' (p. 65); and could be irremediable by 
     ordinary methods. The impact could be so great as to ``make 
     quantifying financial damages impossible,'' (p. 1), the 
     effects would be ``catastrophic and irreversible'' (p. 1), 
     and these ``climate-related risks will remain largely 
     unhedgeable as long as system-wide action is not 
     undertaken.'' (p. 1)
       In this looming, ominous cloud of danger and uncertainty, 
     one thing is certain. ``[T]here is certainty about the need 
     for ambitious actions despite prevailing uncertainty 
     regarding the timing and nature of impacts of climate 
     change.'' (p. 3) The report identifies ``an array of 
     actions'': ``The most obvious ones are the need for carbon 
     pricing and for systematic disclosure of climate-related 
     risks by the private sector.'' (p. 2, emphasis added). To 
     achieve this safe and certain path, the report calls urgently 
     for an end to ``[t]he procrastination that has been the 
     dominant modus operandi of many governments for quite a 
     while.'' (p. 66) (As you know, I take the position that our 
     procrastination in Congress has been acquired by the fossil 
     fuel industry through its armada of front groups and dark 
     money channels, which will make the procrastination all the 
     more blameworthy when the full story emerges.)
       The stem warning of the ``Green Swan'' report, and the 
     certain path to safety from the hazard, are echoed in a 
     recent open letter from BlackRock CEO Larry Fink.
       In his letter to CEOs, Fink notes that ``[c]limate change 
     has become a defining factor in companies' long-term 
     prospects,'' and that as a result ``we are on the edge of a 
     fundamental reshaping of finance'' (emphasis in original), 
     one that is ``compelling investors to reassess core 
     assumptions about modem finance.''
       This extraordinary language is based, as in the ``Green 
     Swan'' report, on the dual nature of the hazard, ``of how 
     climate risk will impact both our physical world and the 
     global system that finances economic growth.'' The conclusion 
     is harsh: ``In the near future--and sooner than most 
     anticipate--there will be a significant reallocation of 
     capital.'' (emphasis in original) The phrase ``significant 
     reallocation of capital'' couches in bland economic terms a 
     dramatic and painful human prospect.
       BlackRock also agrees on the safe path: that ``government 
     must lead the way in this transition,'' and that ``the scale 
     and scope of government action'' is ``one of the most 
     important questions.'' In this regard, ``carbon pricing [is] 
     essential to combating climate change.'' (emphasis added)
       In addition to the BIS ``Green Swan'' report and the 
     BlackRock letter, in the time since my last letter the 
     following organizations have also brought similar warnings 
     forward.
       On December 18, 2019, the Bank of England published a 
     discussion paper outlining its proposal for climate stress 
     tests for corporations under its regulatory supervision.
       In January 2020, the management consultancy McKinsey 
     released a comprehensive report on the physical risks of 
     climate change. McKinsey warns that climate change could 
     ``make long-duration borrowing unavailable, impact insurance 
     cost and availability, and reduce terminal values.'' It could 
     ``trigger capital reallocation and asset repricing.'' On 
     January 15, 2020, the World Economic Forum's Global Risks 
     Report identified the top five most likely risks facing the 
     world over the next 10 years, and all were climate-related 
     risks.
       A January 2020 report from the Stanford Graduate School of 
     Business notes that ``the financial risks from climate change 
     are systemic'' and ``singular in nature,'' and ``[g]lobal 
     economic losses from climate change could reach $23 
     trillion--three or four times the scale of the 2008 financial 
     crisis.''
       Given the scope and scale of these warnings, and given that 
     Senators depend on the Banking Committee as our official eyes 
     and ears into such hazards, I hope that the Committee will 
     rapidly hold searching and fair hearings about these danger 
     warnings.
           Sincerely,
                                               Sheldon Whitehouse,
                                                     U.S. Senator.

  Mr. WHITEHOUSE. Mr. President, the warnings are serious. They come 
from some of our foremost financial experts. So let's walk through what 
we have in store if we keep sleepwalking through the climate crisis.
  As I said, warning No. 1: coastal property value crash.
  Freddie Mac, not an environmental organization but a giant mortgage 
company, warned that rising sea levels will prompt a crash in coastal 
property values that will be worse than the housing crash that 
triggered the 2008 financial crisis.
  First Street Foundation found that rising seas have already caused 
$16 billion in lost property values in coastal homes from Maine to 
Texas.
  Moody's, the bond rating agency, warned that climate risk will 
trigger downgrades in coastal communities' bond ratings.
  BlackRock--the biggest asset manager in the world--estimated that, by 
the end of the century, climate change will cause coastal communities 
annual losses that will average up to 15 percent of local GDP with the 
hardest hit communities, obviously, hit far worse. Hello, Florida.
  Warning No. 2: a carbon asset bubble crash.
  The Bank of England, the Bank of France, the Bank of Canada, and the 
European Central Bank--all backed by top-tier, peer-reviewed economic 
papers--all warn that fossil fuel assets are dramatically overvalued on 
fossil fuel companies' books, that these assets are actually uneconomic 
and will become stranded, and that the resulting ``carbon asset 
bubble'' crash will swamp the world economy.
  How bad is it? It is called systemic financial risk. Systemic 
financial risk is finance speak for risk to the entire economic system. 
Do you remember the 2008 financial crisis? Bad home mortgages blew up 
more than mortgage companies; they caused a brutal economic recession, 
and millions of people lost their jobs, their homes, and their 
retirement savings. We are still recovering from that collapse. That is 
a systemic financial crisis, and the warnings are that this one will be 
worse.
  In my recent letter, I looked at the more recent warnings. Here is 
the Bank for International Settlements' recent Green Swan report. The 
title is a reference to the metaphor of a black swan--an unpredictable 
event with calamitous consequences for the economy.
  Below is what my letter to the Banking Committee quoted from this 
Green Swan report.
  Page No. 1 warns: ``[c]limate change could . . . be the cause of the 
next systemic financial crisis.''
  From page No. 65: ``Central banks, regulators and supervisors have 
increasingly recognized that climate change is a source of major 
systemic financial risks,'' and ``climate catastrophes are even more 
serious than most systemic financial crises.''
  Again, from page No. 1: ``Exceeding climate tipping points could lead 
to catastrophic and irreversible impacts that would make quantifying 
financial damages impossible.''
  Let's slow down and do that one again: ``Exceeding climate tipping 
points could lead to catastrophic and irreversible impacts that would 
make quantifying financial damages impossible.''
  As a little aside here, it is an odd coincidence that the report's 
language of ``catastrophic and irreversible'' mirrors President Trump's 
warning in a New

[[Page S1696]]

York Times ad in 2009 that the consequences of climate change would be 
catastrophic and irreversible--the same words, ``catastrophic and 
irreversible.'' This was said by Trump in 2009 and was written in the 
Bank for International Settlements' Green Swan report just 2 months 
ago.
  Back to the Green Swan report, on page No. 3: ``The complex chain 
reactions and cascad[ing] effects associated with both physical and 
transition risks could generate fundamentally unpredictable 
environmental, geopolitical, social and economic dynamics.''
  Fundamentally unpredictable economic dynamics? Fundamentally 
unpredictable social dynamics?
  Again, on page No. 1: ``climate-related risks will remain largely 
unhedgeable as long as system-wide action is not undertaken.''
  Back to page No. 3 again: Like the black swans from which the report 
derives its title, the ``physical and transition risks are 
characterised by deep uncertainty and nonlinearity, their chances of 
occurrence are not reflected in past data, and the possibility of 
extreme values cannot be ruled out''--the possibility of extreme 
values.
  Another big warning that I quoted in my letter to the Banking 
Committee came from BlackRock CEO Larry Fink. In his open letter to 
CEOs, Fink echoes the Green Swan warning, writing: ``[c]limate change 
has become a defining factor in companies' long-term prospects.'' As a 
result, ``we are on the edge of a fundamental reshaping of finance,'' 
one that is ``compelling investors to reassess core assumptions about 
modern finance.''
  Folks, BlackRock is the biggest asset manager in the world. When its 
CEO speaks of a fundamental reshaping of modern finance and a shaking 
of its core assumptions, that is serious stuff.
  In my letter, I cite other recent warnings of this systemic financial 
risk, all since I distributed the binder, many just this year. Here are 
a few instances.
  In December, the Bank of England proposed climate stress tests for 
corporations under its regulatory supervision. We started bank 
financial stress tests after the 2008 mortgage crisis, and central 
banks are starting to do the same for the climate crisis.
  In January, massive management consultant McKinsey--again, not a 
green group but, presumably, a pretty smart group--warned that climate 
change could ``make long-duration borrowing unavailable, impact 
insurance cost and availability, and reduce terminal values.'' Climate 
change could ``trigger capital reallocation and asset repricing,'' 
which is finance speak for the fundamental upheaval of our economy.
  January: The World Economic Forum puts out its Global Risks Report 
that identifies the five most likely global risks facing the world over 
the next 10 years. Five for five, every single one of them was climate 
related--all five.
  Finally, from the Stanford business school's Corporations and Society 
Initiative is a report that warns ``the financial risks from climate 
change are systemic''--there is that word again, ``systemic''--that 
these risks are ``singular in nature,'' like the green swan-black swan 
warning, and that ``[g]lobal economic losses from climate change could 
reach $23 trillion--three or four times the scale of the 2008 Financial 
Crisis.''
  Pause for a moment, and recall the agony of the 2008 financial 
crisis. Losses in the stock market wiped out nearly $8 trillion. 
Housing values cratered; retirement savings vanished; and Americans 
lost jobs, lost homes, and lost nearly $10 trillion in wealth. Global 
economic growth went negative. We all went home to States where we 
witnessed extraordinary human suffering. Three or four times that? The 
Stanford report is telling us that we are courting financial peril--
systemic risk--the likes of which we cannot imagine.
  Climate change is a natural force. It has blown carbon dioxide levels 
way outside what humankind has ever experienced. It is depositing the 
equivalent of four Hiroshima-sized atomic bombs of excess heat per 
second into our oceans--per second--and it is an economic bomb 
positioned beneath our economy, its detonator ticking down steadily.
  We have a chance to defuse the bomb. With all of these warnings that 
I have described in this binder and that I have described in my letter 
to the Committee on Banking, Housing, and Urban Affairs comes a clear 
description of the solution: Government must act. Here are the 
solutions that I quote in my letter to the Committee on Banking, 
Housing, and Urban Affairs.
  On page No. 66 of Green Swan: End ``[t]he procrastination that has 
been the dominant modus operandi of many governments for quite a 
while.''
  By the way, here, it really hasn't been procrastination; it has been 
obstruction. It has been obstruction by the fossil fuel industry, its 
money, and its minions. Clearly, we haven't done anything serious about 
it, so that has to end.
  On page No. 2 of the Green Swan: ``The most obvious ones are the need 
for carbon pricing and for systematic disclosure of climate-related 
risks by the private sector.''
  It is, indeed, obvious to people in the financial sector. It is only 
not obvious to us because fossil fuel money swirls all around this 
place, trying to convince us that the obvious isn't true. Yet BlackRock 
CEO Fink's letter echoes that call for carbon pricing.
  He says, ``carbon pricing [is] essential to combating climate 
change.''
  So we have the warnings, and we have the solutions. We have 
everything except the will to act. The reason we don't have the will to 
act is because we have dark money, political predators controlling our 
behavior in ways that are deeply, deeply inappropriate.
  Assume that these warnings are correct. When this blows, Senators who 
didn't help us act will have to come up with a better excuse than: 
Well, we weren't warned--because we were warned. We have been warned 
over and over and over again. We have been warned by experts. We have 
been warned by major financial institutions. We have been warned by the 
custodians of our economy, the central banks.
  Colleagues, you have the warnings in your inbox. When this blows up, 
when coastal property values crash, or when the carbon bubble bursts, 
or worse, when both happen--nothing says both can't happen--it is not 
going to look good to say: Yes, I was warned, but, you see, my 
political party is funded by the fossil fuel industry so naturally I 
did nothing. That is how you lose the privilege of representing people.
  It was a bit of a tempest in a teapot. It happened in Rhode Island 28 
years ago, but I have lived through this. We had a financial crisis in 
Rhode Island in 1991. I was working for the Governor, who came in to 
have to clean up that horrible mess, and I was there for the following 
election after the financial crisis hit.
  The legislators who slept through the warnings lost their jobs in a 
tidal wave of popular outrage. In the subsequent election, the 1992 
election, more than one-third of Rhode Island's General Assembly was 
either voted out or didn't even bother running again.
  There was a movie, when I went to law school, about the Harvard Law 
School. I think it was called ``One L.'' They brought in the freshman 
class of the One L class, and the crotchety old dean looked at them all 
and said: A third of you are going to be gone before you graduate 
because this is so demanding. Look to your right. Look to your left. 
One of you will not be here at graduation.
  When this thing blows, that is going to be a ``Look to your left. 
Look to your right. One of you won't be here afterwards'' moment here 
in the U.S. Senate.
  You think people are mad now, wait until this hits. Wait until these 
warnings come true, and they know you were warned. Wait for that.
  It is time to wake up.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BOOKER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOOKER. Mr. President, before I begin my formal remarks, I just 
want to state that the Senate page class--I don't know if you have 
noticed--are better than adequate. They are doing a good job for the 
United States of America, and I appreciate them in their service to the 
U.S. Senate.

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