Bloomberg: Climate Change Is a Financial Crisis, Too

Bloomberg, November 19, 2019: Climate Change Is a Financial Crisis, Too

The people who oversee America’s financial system seem to think that climate change isn’t their problem. As one official quipped in recent congressional testimony, he’s “not a meteorologist or a climate scientist.”

They should think again. By failing to take action, regulators are leaving the country exposed to a devastating crisis.

Financial institutions, from banks to insurers to asset managers, face climate-related risks that go far beyond the issue of social responsibility. One way or another — be it through natural disasters and forced migration, or decisive moves to transform energy use — they could end up facing trillions of dollars in cumulative losses. These could come in the form of defaulted mortgages in flooded areas, soured investments in regions that become uninhabitable, or nonperforming loans to shuttered coal-fired power plants.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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