[Congressional Record Volume 169, Number 39 (Wednesday, March 1, 2023)]
[Senate]
[Pages S558-S560]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                             Climate Change

  Mr. WHITEHOUSE. Mr. President, here I am again with my trusty, 
battered chart by my side, this time here to talk about the looming 
costs and economic risks of climate upheaval.
  Almost exactly 5 years ago, I sent around a binder about this thick 
to all

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of my Senate colleagues in which I compiled some of the most compelling 
warnings about the looming climate economic crisis. I have just 
recently updated it and shared it with all of the Budget Committee 
members. It is now more like this thick, as the warnings just keep 
piling up.
  These warnings come from central bankers, economists, asset managers, 
insurance companies, investment banks, credit rating agencies, and 
leading management consultants--folks with a lot of credibility when it 
comes to economics, finance, corporate risk, and their effects on 
government spending and revenues--folks who often have a fiduciary 
obligation to get this right.
  The Budget Committee has started to dig into these warnings. We have 
just held the first two of a series of hearings on climate impacts to 
our Federal budget. Our second hearing, held earlier today, explored 
warnings of crashes in coastal property values amid rising seas and 
more powerful storms.
  One of our witnesses was Kate Michaud, the town manager of Warren, 
RI.
  And next time we will spell ``Rhode Island'' correctly.
  Warren is the smallest town in the smallest county of our smallest 
State. There, like in many small coastal towns all around the country, 
in Georgia and elsewhere, the problems are real and they are immediate. 
She testified that some homes in Warren have seen their value drop by 
one-third because of flood risk.
  And sea level rise is projected to permanently flood some coastal 
portions of Warren over the next decade. This is mapping that is done 
by the State of Rhode Island that shows the projected flooding zone of 
Warren, and all of these are existing buildings and homes that will be 
inundated.
  Warren is not alone. Zillow's real estate database has identified 
over 4,800 homes in Rhode Island that would be under water with a 
projected 6 feet of sea level rise, which is projected for Rhode 
Island. That is nearly $3 billion in home values.
  And Rhode Island is not alone. The United States has nearly 13,000 
miles of coastline. Forty percent of our population lives along the 
coast. More than a trillion dollars' worth of residential and 
commercial real estate is coastal. And for most American households, 
their greatest wealth is their home.
  First Street Foundation, whose CEO testified at this morning's 
hearing, examines flood risk. It is what they do. Their examination 
shows significantly increasing risks to residential properties over the 
next 30 years. And Rhode Island does its own flood projections, and 
they show similar risks.
  Just 2 weeks ago, a study found real estate exposed to flood risks 
was overvalued--i.e., the flood risk had not yet been taken into 
account--by up to a staggering $237 billion, with the worst property 
overvaluations along coasts; and, of course, Florida, with all of its 
coasts, is the prime liability. The study warns that, as a result, 
coastal real estate values may plummet and that can cascade into 
systemic risks for the mortgage market.
  Freddie Mac, the mortgage giant, has made very similar warnings about 
coastal property values. Their former chief economist, who also 
testified at this morning's hearing, has said:

       The economic losses and social disruption . . . are likely 
     to be greater in total than those experienced in the housing 
     crisis and Great Recession.

  Anybody who was here through that 2008 housing crisis and the 
recession that followed knows how sobering that warning is, and it 
comes from that collapse in coastal property values triggered by 
difficulty in getting mortgage and insurance, with its 30-year lead 
time, collapsing values and then cascading out into the rest of the 
economy.
  Sea levels are rising, and the rate is accelerating. That is a 
scientific fact. As homes and businesses in coastal communities face 
more frequent sunny-day flooding and wetter and more violent ocean 
storms, more homes will be under water, both literally and 
figuratively. Insurance will become more expensive and harder to find. 
Mortgages depend on insurance. So lending will suffer. Coastal 
communities will become harder places to live and work, and real estate 
values and local tax bases will decline.
  Moody's is already looking at local municipal bonds in this light. In 
emergencies, coastal communities will turn to the Federal Government 
for financial assistance. Federal flood insurance costs will rise. For 
home mortgages, banks and insurance companies will look ahead 30 years. 
So, long before the ocean laps at physical doorsteps, those markets 
will be hit, and the effect in real estate markets across the country 
will bring harsh consequences for families and their financial 
stability.
  I used the term ``systemic risk'' earlier. Systemic risk is a bland 
term used by economists. What it refers to is anything but bland. It 
refers to the massively destabilizing events that can cascade out and 
trigger general economic recession. Think of the mortgage crisis in 
2008. Twenty percent of household wealth was wiped out in 2 years. 
Unemployment soared, and government revenues were reduced for a decade.
  There is broad concern here about deficits. Well, deficits tripled as 
a result of that 2008 shock. According to CBO, revenues fell by $4.4 
trillion, and projected spending rose by $800 billion to fund the 
recovery, for a net debt increase total of over $5 trillion from that 
event.
  Well, we should see the writing on the wall when it comes to climate 
risks. At our first hearing, Dr. Mark Carney, who has been Governor--
their phrase for CEO--of the Bank of England and of the Bank of Canada, 
gave us the scale of the risk.
  He testified that ``over the balance of this century, climate change 
could reduce the level of global GDP per capita by 10 to 20 percent 
without efforts to limit warming.'' That would be ``the equivalent of a 
decade of no economic growth.''
  Bob Litterman, an economist who spent more than two decades managing 
risk for Goldman Sachs as its chief risk officer, now chair of the 
Climate-Related Market Risk Subcommittee at the U.S. Commodity Futures 
Trading Commission, testified:

       We are on track for somewhere between 2.2 and 3.4 degrees 
     of warming by 2100, which would result in GDP losses of 
     somewhere between 2.6 and 4 percent. That's more than our 
     recent annual growth rate, implying the possibility of long-
     term negative growth as climate change worsens.

  This is not a future problem. Some of these warned-of risks are 
already upon us. Already, climate-related natural disasters increase 
Federal spending on disaster assistance, flood insurance, crop 
insurance, and other programs. Already, extreme heat and drought force 
western farmers to leave land unplanted and reduce livestock herds. 
Droughts around the world already hit cotton production, raising costs 
on production like medical gauze and cloth diapers. Insurance prices 
are already through the roof--in Florida and Louisiana, hammered by 
increasingly violent hurricanes, and out West, under siege from more 
intense and frequent wildfires.
  This will certainly get worse--much worse, particularly if warming 
exceeds 1.5 degrees Celsius. We are on a bad trajectory. Think of 
coastal cities flooded with water and Southwest cities that can't get 
water. Think of a Salt Lake that is virtually gone and blowing dust 
over Salt Lake City. Deloitte--the management consulting firm--predicts 
that the differential between being responsible and reckless about 
climate could sum to more than $220 trillion globally between now and 
2070.
  We use big numbers around here a lot. A $220-trillion swing in the 
global economy is massive. And Deloitte is not exactly a green outfit.
  There is some good news here. By acting now, we can minimize the 
damage and costs to households, businesses, and our economy--and there 
are huge economic opportunities from investing in climate action. The 
Inflation Reduction Act invested $370 billion to create good-paying 
jobs and new economic opportunities. It will lower energy costs for 
families and small businesses and accelerate the transition to clean 
energy.
  Looking ahead, a well-designed carbon border adjustment--an idea 
which has bipartisan support--would significantly curb greenhouse gas 
emissions in the United States and overseas and boost American heavy 
industry against our Chinese competitors and reshore American 
manufacturing jobs lost in past decades.
  Let me close on tipping points. Tipping points are thresholds that 
change

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the trajectory of harm, potentially dramatically. One example is the 
tipping point where warming will cause the Greenland ice sheet to 
collapse and melt. We don't know exactly where that threshold lies. 
That is one of the dangers of our climate experiment. But science 
suggests it is between 1.5 and 2 degrees Celsius of warming.
  Well, folks, we have already warmed 1.1 degrees. So the distance to 
1.5 or 2 degrees is pretty short.
  If we lose the Greenland ice sheet, it is 22 feet of sea level rise. 
So we would do well to avoid these tipping points, to avoid the 
systemic economic risks, to behave prudently and responsibly, and to 
take advantage of a stronger and more stable clean energy economy that 
beckons. It is long past time to wake up.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.