Biden orders US agencies to mitigate climate change risks

WASHINGTON • United States President Joe Biden has directed federal agencies to assess and mitigate the increasing and serious risks that climate change poses to individuals, businesses, the federal government and the US financial system, the White House said.

Mr Biden on Thursday issued an executive order requiring development of a comprehensive government-wide climate-risk strategy within 120 days, as well as an annual assessment of climate-related fiscal risks as part of the US budget.

It aims to harness the purchasing power of the federal government, which spent more than US$680 billion (S$904 billion) on goods and services last year, by moving towards requirements for major suppliers to disclose their greenhouse gas emissions and climate-related risks, officials said.

"This cannot be optional. The stakes are simply too high. The federal government has to lead by example," White House climate adviser Gina McCarthy said.

"Americans should be able to know the real risks that extreme weather and rising seas pose to the homes that they've invested in or the small businesses that they've built up," she said. "Their hard-earned retirement shouldn't be wiped out by the impacts of climate change or irresponsible investors."

Mr Brian Deese, director of the National Economic Council, said the order marked a sea change in the US approach to climate risks from that of the former Trump administration, which pulled the US out of the 2015 Paris climate accord and acted to curb sustainable investing by US pension funds.

The new executive order is part of Mr Biden's drive to cut US greenhouse gas emissions in half by 2030 and reach net-zero emissions by 2050.

Mr Deese said the order would advance clear, consistent, comparable and accurate disclosure of often-hidden climate-related financial risks, help mitigate against them, and address the disparate impacts on communities of colour.

Climate activists said the order sent a powerful signal to US banks, insurance companies and asset managers to stop funding fossil-fuel projects.

Ms Shalanda Young, acting director of the Office of Management and Budget, said climate-related disasters had cost the federal government over US$1 trillion in damage over the past 15 years, and taxpayers could face more than US$100 billion in extra costs each year without further action.

The order paves the way for Labour Secretary Marty Walsh to revise, suspend or rescind Trump-era rules that required pension fund managers to put retirees' financial interests ahead of climate change and other issues when allocating investments.

It also encourages the independent Financial Stability Oversight Council, headed by Treasury Secretary Janet Yellen, to assess climate risks to the stability of the federal government and the financial system, and consider issuing a report within 180 days.

REUTERS