SBC Hearing on The Economic Costs of Climate Change

Senate Banking Committee

Borrowed Time: The Economic Costs of Climate Change

Thursday, August 4, 2022


  • The hearing primarily focused on the Securities Exchange Commission’s (SEC) climate risk disclosure rule, the Inflation Reduction Act, and the municipal bond market.
  • Senator Toomey criticized the SEC’s proposed climate rules in his opening statement.


  • Joe Flarida, Executive Director, Power a Clean Future Ohio
  • Dan K. Eberhart, Chief Executive Officer, Canary LLC.
  • David Butterworth, Northeast Regional Business Agent, Pipeliners Local Union 798
  • Shalini Vajjhala, Executive Director, Founder and CEO, San Diego Regional Policy & Innovation Center

Opening Statements
Chairman Sherrod Brown (D-Ohio)

In his opening statement, Brown said the Committee must prevent risks from wrecking local economies and the financial stability of the country.

Ranking Member Patrick J. Toomey (R-Pa.)

In his opening statement, Toomey addressed the energy crisis and inflation. He criticized the Democratic tax bill explaining that costs will trickle down to manufacturers, then workers. Toomey also mentioned SEC compliance costs and the negative effects they have on public companies. Additionally, Toomey said that SEC rules will not make a dent in climate change despite inconceivable compliance costs and addressed the underinvestment in traditional energy.


Joe Flarida, Executive Director, Power a Clean Future Ohio

In his testimony, Flarida highlighted the complexity of climate change and addressed the increased burden it will have on vulnerable populations. Flarida said municipal spending must increase by $1.8 to $5.9 billion per year to combat climate costs just in Ohio. Flarida also addressed the need for federal support and involvement, highlighting costs will only rise without intervention.

Dan K. Eberhart, Chief Executive Officer, Canary LLC.

In his testimony, Mr. Eberhart opposed SEC rules requiring emissions disclosure, expressing the need for government cooperation, not opposition, to combat climate change. Eberhart said the SEC exceeded its statutory authority and specifically mentioned Scope 3 disclosures that will negatively affect small companies like Canary. Eberhart ended by citing the need for American energy independence and urged Congress not to prioritize climate change over returns for the sake of the U.S. economy.

David Butterworth, Northeast Regional Business Agent, Pipeliners Local Union 798

In his testimony, Butterworth explained that climate change can be solved through hard work and the implementation of moderate policies that are beneficial for the entire country and concluded by urging the Committee to consider the grid builders currently stuck in the middle.

Shalini Vajjhala, Executive Director, Founder and CEO, San Diego Regional Policy & Innovation Center

In her testimony, Vajjhala stressed the importance of finding ways to disaggregate the economic costs of climate change by peril, sector, and region to motivate local action to protect against the worst overall outcomes. She cited three costs the Committee should direct their focus to: local revenue losses, reductions in asset lifetimes, and deferred infrastructure maintenance. She concluded by highlighting the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), saying both hold tremendous promise for addressing deferred infrastructure maintenance.

Question & Answer

Climate Disclosure Rule

Sen. Jack Reed (D-R.I.) asked Vajjhala asked how the economic benefits of the Security and Exchange Commission’s (SEC) Climate Disclosure Rule would outweigh any course. Vajjhala cited the importance of investing in infrastructure and jobs to keep our economies strong and resilient and said the SEC’s requirements on risk management and strategy offer a window into where these risks have implications for cascading failures and where public investments can help strengthen the economy. Reed asked if it is accurate to say the premise for those who object to this rule is that most companies do not have material risk of climate change. Vajjhala said she does not believe that is an accurate assumption but that the information in this case could be tremendously valuable. Reed asked if information on companies with material climate change risk should be made available to investors and shareholders and bondholders. Vajjhala said yes.

Inflation Reduction Act and Infrastructure Investment and Jobs Act

Sen. Elizabeth Warren (D-Mass.) asked Vajjhala if the climate investments in the Inflation Reduction Act would lower the cost of disaster relief for the federal government. Vajjhala said yes. Sen. Tina Smith (D-Minn.) asked Flarida if he could speak to how the agenda accomplished in the Inflation Reduction Act is going to help local governments balance their budgets. Flarida said the Inflation Reduction Act is an example of how we can ease burdens on Americans who are going to have to adapt to a changing climate that they are not use to and this is an opportunity for local governments to work alongside their residents to plan comprehensively to address this issue. Smith asked Vajjhala if she could address how the Inflation Reduction Act climate provisions will help communities with older housing stock, less efficient homes, and less wealthy citizens. Vajjhala said the Inflation Reduction Act coupled with the Infrastructure Investment and Jobs Act can be transformational for these communities and for household budgets, and this legislation will split the problem to see not only who loses money but also who suffers because of climate change. 

Municipal Bond Market

Sen. Catherine Cortez-Masto (D-Nev.) asked Vajjhala to speak on the issues facing the municipal bond market for climate vulnerable communities and what needs to be done. Vajjhala said the implications for the municipal bond market are varied and that the investments discussed with the Committee today will make bonds more secure and ensure investments last as long as intended. 

Coastal Real Estate Market

Reed asked Vajjhala to speak to what climate change means for the future of the coastal real estate market. Vajjhala said this is an enormous problem that does not have an obvious solution and that we need better information about how we can help communities protect themselves, transition smoothy, and address this physical and financial risk. Reed asked if this financial risk should be acknowledged and disclosed by major insurance companies that have extensive coverage of oceanfront properties. Vajjhala said yes.

Global Environmental Standards

Sen. Kevin Cramer (R-N.D.) asked if Russia or China have similar regulatory agendas with climate change similar to the United States. Eberhart explained that most countries are only concerned with profits and ignore environmental and consumer standards. 

Energy Investment

Toomey asked to what extent has a reduction in capital affected energy production and consumer prices. Eberhart explained there has been a chilling effect on the industry. Eberhart added that big banks have been told to halt new energy loans and E&P’s have reduced investments, provided fewer bond offerings, and launched less IPO’s, which he stated is translating to higher consumer costs.

For more information on this hearing, please click here.

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