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New U.S. Assessments Highlight Climate Change Risks to National Security and Financial Systems

New assessments on climate change and the national security ramifications highlighted the numerous ways the world is already experiencing instability.

The findings were published by the U.S. Departments of Homeland Security (DHS) and Defense (DOD), along with reports from the National Security Council and the director of national intelligence (DNI). 

“The reports include warnings from the intelligence community about how climate change can work on numerous levels to sap the strength of a nation,” according to analysis by The New York Times. “For example, countries like Iraq and Algeria could be hit by lost revenue from fossil fuels, even as their region faces worsening heat and drought. The Pentagon warned that food shortages could lead to unrest, along with fights between countries over water.”

The DNI report also stressed that climate change will exacerbate risks to U.S. national security interests as physical impacts increase and geopolitical tensions mount. 

“Global momentum is growing for more ambitious greenhouse gas emissions reductions, but current policies and pledges are insufficient to meet the Paris Agreement goals,” the report said. “Countries are arguing about who should act sooner and competing to control the growing clean energy transition. Intensifying physical effects will exacerbate geopolitical flashpoints, particularly after 2030, and key countries and regions will face increasing risks of instability and need for humanitarian assistance.”

The Financial Stability Oversight Council (FSOC) also released a report this week, saying climate change is an “emerging threat” to the stability of the U.S. financial system. 

“Higher temperatures are leading to more natural disasters, such as hurricanes, wildfires, and floods,” according to the Times analysis. “These, in turn, are resulting damaged property, lost income, and disruptions to business activity that threaten to alter how assets, such as real estate, are valued.”

The council included recommendations for member agencies to address its findings, including assessing climate-related financial risks to financial stability; enhancing climate-related disclosures to give investors and market participants the information they need to make informed decisions; enhancing actionable climate-related data to allow better risk measurement by regulators; and building capacity and expertise to ensure that climate-related financial risks are identified and managed.

“Climate change is an emerging and increasing threat to America’s financial system that requires action,” said U.S. Treasury Secretary Janet L. Yellen in a statement. “FSOC’s report and recommendations represent an important first step towards making our financial system more resilient to the threat of climate change.” 

The reports were released as the Biden Administration prepares to attend a United Nations climate conference in Glasgow. Dubbed COP26, the conference aims to bring world leaders together to address their progress—or lack of—towards the Paris Climate Agreement and the UN Framework Convention on Climate Change. UN Secretary-General António Guterres has called 2021 a “crucial year” for climate change. 

“The world remains way off target in staying within the 1.5 degree limit of the Paris Agreement,” Guterres said in a press statement. “This is why we need more ambition, more ambition on mitigation, ambition on adaptation, and ambition on finance.”

Based on previous reports analyzed by Security Management, the world will face severe risks to national and global security during the next three decades with even low levels of warming.

“Climate change is a threat multiplier that acts to accelerate existing national security threats and cause further destabilization through natural disasters and aggravated social tensions,” according to “Why You Should be Thinking About Climate Proofing” in the March 2021 issue of Security Management