February 8, 2023

This week, Council of Economic Advisers Member Heather Boushey, Office of Management and Budget Chief Economist Zach Liscow, and other officials from across the Biden-Harris Administration attended the Executive Meeting of the Roundtable on Macroeconomic and Climate-related Risks and Opportunities convened by the National Academies of Sciences, Engineering, and Medicine.

This Roundtable’s goal is to improve our understanding of how the physical and transition effects of climate change relate to and affect macroeconomic performance, in addition to exploring the implications for fiscal, monetary, and financial stability policies. In attendance were dozens of scholars and policymakers focused on the intersection of climate change, macroeconomic modeling, and public policy.

The President knows that to address the serious challenges climate change presents, we must take swift and bold action, which is why he has set an ambitious goal of rapidly transitioning to a net-zero economy by 2050. To support this effort, the President’s Executive Order on Climate-Related Financial Risk called on the Council of Economic Advisers and the Office of Management and Budget to “identify the primary sources of Federal climate-related financial risk exposure and develop methodologies to quantify climate risk within the economic assumptions and the long-term budget projections of the President’s Budget.” New analytic tools to accurately model the macro-economic effects of climate change and the energy transition will enable policymakers to better anticipate, plan for, and manage these emerging risks. To that end, for the first time in history, the CEA and the OMB have formally accounted in the Federal budget for risks of climate change by publishing two new assessments, Federal Budget Exposure to Climate Risks and a new section in the Long-Term Budget Outlook focused on climate change. The first of these is supported by an OMB white paper. Additionally, the OMB and the CEA have released a white paper that outlines how better modeling of the broader economic impacts of climate change can help to quantify economic and fiscal impacts of climate change and climate action. This ongoing analysis is supported by a new cross-agency Interagency Technical Working Group.

The National Academies’ Roundtable on Macroeconomic and Climate-related Risks and Opportunities is an essential component of this undertaking to fully account for climate risk in macroeconomic projections. Building upon the productive conversations of the Inaugural Meeting of the Roundtable in October 2022, this first public Executive Meeting brought scholars and policymakers together to identify user capabilities and needs, discuss opportunities for incorporating the effects of climate change into macroeconomic models (as well as challenges and limitations of current modeling tools), and evaluate policy pathways available to address climate risks while accounting for socioeconomic equity, setting the agenda for this work over the next year. While the Interagency Technical Working Group is working in the near-term to further develop methodologies for the integration of climate risks into the President’s budget using the existing expertise and resources of the Federal Government, discussions with the NAS Roundtable will provide guidance on longer-term work and development of new tools and models to improve on these near-term approaches.

Biden Administration ex-officio members of the panel include:

Heather Boushey, Council of Economic Advisers
Carla Frisch, U.S. Department of Energy
Justina W. Gallegos, National Economic Council
Sarah B. Kapnick, National Oceanic and Atmospheric Administration
Zachary Liscow, Office of Management and Budget
Kelly Maguire, U.S. Department of Agriculture
Tara M. Sinclair, U.S. Department of the Treasury
Maria Uhle, National Science Foundation

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