Climate change mitigation is creating a roadmap to a nationalized financial system | American Enterprise Institute

By Paul H. Kupiec

A Biden administration executive order issued in May required the Financial Stability Oversight Council (FSOC) and its member agencies to report on the risks that climate change pose for the financial sector and to recommend the measures needed to mitigate the purported risks. 

The October report garnered little press attention even though it represents the first step in the administration’s plan to use Dodd-Frank Act powers to effectively nationalize and thoroughly politicize the financial system. Existing statutes will be used to promulgate new financial regulations that will allow the administration to control the allocation of investment capital under the pretext of controlling financial sector systemic risk.   

The current fashion in climate change discussions within the financial sector distinguishes between two sources of climate change risk: extreme weather-related losses caused by physical damage and losses associated with transitional risk. Transitional risks are hypothetical losses that could materialize if governments and consumers alter their policies and demand patterns in response to new information about the immediacy of existential threats man-made greenhouse gas emissions pose to the climate and the environment…

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