Senate Resolution Formally Declares Climate Change a Major Threat to US Financial Stability

This resolution isn’t a new law or a spending package; it’s a formal declaration by the Senate that climate change poses a serious, structural risk to the U.S. and global economies. Think of it as Congress officially confirming what a lot of financial experts have been whispering about: the climate crisis is also a financial crisis waiting to happen.

The resolution lays out specific findings that serve as a stark warning. It points out that extreme weather events fueled by climate change cost the U.S. $165 billion in 2022 alone. More importantly, it highlights that this instability is already hitting the insurance market, making coverage increasingly expensive or unavailable, which in turn could destabilize the entire mortgage and property sector. Financial models suggest that unchecked climate change could cost the global economy a stunning $178 trillion in net present value between 2021 and 2070.

The $25 Trillion Property Risk

For anyone who owns a home or is thinking of buying one, this resolution hits close to home—literally. It warns that instability in the insurance market, driven by more frequent floods, fires, and storms, could lead to a global residential property value decline of up to $25 trillion. Why? Because if you can’t get affordable insurance, the bank won’t give you a mortgage, and the value of that asset plummets. This isn't just about beachfront property; this affects anyone living in an area increasingly prone to extreme weather, which is quickly becoming most of the country.

Why Banks Are Worried

This isn't just an environmental declaration; it’s a financial one. The resolution cites major financial institutions, including national banks and the international Financial Stability Board, which all agree that climate change is creating systemic, structural risk. This means the problem is big enough to potentially take down the whole financial system, much like the 2008 housing crisis, but driven by weather instead of bad loans. When global GDP is projected to fall by 10 to 20 percent within the next three decades if we don't act, that’s not just a bad quarter—that’s a fundamental change in how we live and work.

The Push for an 'Orderly Transition'

Crucially, the resolution concludes by stressing the need for an “early and orderly transition to a low-carbon economy.” Financial experts agree that doing this gradually will help us avoid the catastrophic “shocks” that would come from a sudden, chaotic shift later on. While this resolution doesn't mandate any specific action, its formal acknowledgment of these risks is significant. It sets the stage for future policy and regulation aimed at climate mitigation and financial stability. If you’re in a carbon-intensive industry, this resolution is essentially a flashing yellow light, signaling that the government is officially recognizing the economic necessity of a transition, which will inevitably translate into new costs or regulations down the line.