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18 Berkeley Bus. L.J. 52 (2021)
Climate Change as Systemic Risk

handle is hein.journals/berkbusj18 and id is 257 raw text is: Climate Change as Systemic Risk

Barnali Choudhury*
Hindsight tells us that COVID-19, thought by former President Trump and
others to have come out of nowhere, is more aptly labelled a gray rhino event,
one that was highly probable and preventable. Indeed, despite considerable
evidence of the impending threats of pandemics, for the most part, governments
failed to prepare for the pandemic, resulting in wide-scale social and economic
The lessons from COVID-19, however, should remind us of the perils of
ignoring gray rhino risks. Nowhere is this more apparent than with climate
change, a highly probable, high impact threat that has largely been ignored to
date. Despite those who deny climate change, there remains ample evidence of
the increasing temperature of the earth. Moreover, like COVID-19, climate
change has the potential not only to create public health emergencies, but also to
create wide-scale, enormous adverse impacts on the economy.
Indeed, the risks posed by climate change to the economy have the potential
to be so far-reaching that climate change should-as this article argues-be termed
a systemic risk. As such, the economic implications of climate change need to be
mitigated in order to preserve economic stability. This is not only necessary for
prudential and economic reasons, but also to protect citizens' health and safety,
and to ensure that business does not exceed the limits of the planet.
While there has been some attention to addressing the economic implications
of climate change at the global level, progress in the U.S. has been minimal. This
is surprising for two reasons. First, because climate change has already caused
unprecedented damage in certain parts of the country. Second, because to some
extent, existing legislation and models may offer the tools to address the systemic
risks of climate change. Drawing inspiration from the Dodd-Frank Act, SEC
rules, and the FDIC model, among others, this article proposes regulatory
approaches for mitigating the systemic risks of climate change in hopes that
COVID-19 does not foreshadow our fate for climate change.
Keywords: climate change, systemic risk, COVID-19, SEC, disclosure,
corporate law, financial institutions, sustainable finance, stranded assets, green
investments, greenhouse gases, fossil fuels
DOI: https://doi.org/10.15779/Z381J9783Q.
*Professor of Law, University College London.


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