US President Donald Trump’s nomination for the next chair of the Federal Reserve has already had an impact on the markets, but his criticism of the central bank’s work on climate change has gone largely unremarked upon. Kevin Warsh faces a tricky path to actually taking up the Fed leadership but were he to take charge, he may lead a major shift in how the Fed views climate: In a speech last year, he said the bank should avoid addressing the “politically charged” issue of climate change. (The Fed, Warsh noted at the time, joined and then withdrew from a group of central banks that share expertise on responding to climate change.)
The Fed has so far published some research analyzing changing temperatures’ impact on the economy and financial stability, though has not pursued the issue as aggressively as regulators on the other side of the Atlantic: The European Central Bank in November issued its first-ever fine for failing to identify climate risks; the Bank of England this year is rolling out tougher rules for lenders on the subject. Recent research from the London School of Economics, meanwhile, found that China’s central bank goes further still, making it easier for financial institutions to borrow in order to fund the energy transition.