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The people whom President Donald Trump has picked to protect America’s money keep insisting a heating planet won’t set that money on fire. But it’s already burned trillions of dollars and threatens to burn exponentially more. Many of these losses could become permanent.Former Federal Reserve Governor Kevin Warsh, Trump’s choice to run the central bank after Jerome Powell, has said the Fed should ignore climate change, dismissing concern about it as a “bandwagon” that is “fashionable” and “fleeting.” He also called it “contraband,” which, in my opinion as a professional English user, is not a proper use of that word because it isn’t illegal to care about climate. For now, anyway.And Treasury Secretary Scott Bessent recently called climate change an issue that had “no clear nexus to safety and soundness” for banks. In a congressional hearing last week, he sniffed that the Financial Stability Oversight Council’s work on climate “has been discredited.”The only thing discredited at this point is that kind of rhetoric. Climate policy is financial policy, something most of the world’s other chief central banks have recognized. The European Central Bank, the People’s Bank of China, the Bank of England, the Bank of Japan and many more have strict rules for banks on managing climate risk. The nonprofit group Green Central Banking assigns letter grades to top central banks for their handling of these issues. Those mentioned above get Bs and Cs. The Fed under Powell received a well-deserved D-. If Warsh takes it one more step down, it will join Argentina and Russia as the only banks failing on climate.The FSOC work Bessent calls “discredited” has this as its central thesis:Climate change is an emerging threat to the financial stability of the United States. In the United States and across the globe, climate-related impacts in the form of warming temperatures, rising sea levels, droughts, wildfires, intensifying storms, and other climate-related events are already imposing significant costs upon the public and the economy.Show me the lie. The world has spent $20 trillion in the past 25 years on natural-disaster cleanup and higher insurance premiums, according to Bloomberg Intelligence, with annual costs rising steadily. The US alone has taken a $7 trillion hit from extreme weather in the past 12 years, making it twice as expensive as the Great Depression. 128153784Home-insurance premiums have soared 69% since December 2019, according to Intercontinental Exchange Inc., far outpacing mortgage principal (23%), interest (27%) and tax (27%) costs during that time. The word for this is “inflation,” one pillar of the Fed’s dual mandate to stabilize prices and maximize employment.Despite this budget squeeze, there are still yawning gaps in coverage that many homeowners won’t discover until after disaster strikes. Investor Dave Burt, who was early to recognize the 2008 housing crisis, has warned underinsurance could mean America’s housing stock is overvalued by as much as $2.7 trillion. Warsh, who helped manage the financial crisis that followed housing’s collapse, should recognize that as a possible problem for the financial sector.If you wanted to give Warsh and Bessent the benefit of the doubt, you could admit the science of measuring how a hotter planet will affect prices and employment (through economic growth) is still relatively young. Early efforts forecast minimal impacts, apparently unable to imagine how disasters crimp supply chains, soaring temperatures hurt labor productivity, droughts trigger political instability and more. Such pain points have become obvious as warming-related catastrophes have increased and we’ve experienced them firsthand.More recent estimates have taken a broader view and predicted broader damage. These include a National Bureau of Economic Research paper by economists from Northwestern and Stanford finding each 1 degree Celsius of heating takes 20% from global GDP. Then there’s the (retracted but soon to be republished) paper from the Potsdam Institute for Climate Impact Research estimating a 60% hit to GDP by 2100 if heating is left unchecked. There’s still plenty of room for economic-impact studies to evolve. A report released last week by researchers from the University of Exeter and the nonprofit group Climate Tracker surveyed dozens of climate scientists about ways to improve the discipline. They would like to see studies better reflect the real world, where extremes matter more than long-term averages, where compounding disasters — power failures that follow hurricanes, for example — compound financial losses, and where things like tipping points and adaptation could affect the outcome. 128153800Future studies might also want to focus less on GDP, which can miss the structural damage done to long-term productivity. A bunch of rebuilding can boost GDP, for example, even as lost education and poor health sap future economic growth. Nevertheless, the Exeter and Climate Tracker researchers did ask scientists to estimate economic losses at certain temperatures. These rose from about 10% of GDP at 1.5C of warming to about 35% at 3C.Possibly the most important takeaway from the report is that climate disasters inflict losses on the baseline of economic activity. They won’t be gently amortized over the next century like a car payment. At some point, these losses could be big enough to stop or reverse growth altogether. Countries that understand and prepare for such outcomes will lose less money when they happen. Trump, meanwhile is choosing ignorance. It will not be bliss.

Benchmark indices Nifty and Sensex extended their gains for a second straight session on Tuesday, supported by a sharp rally in auto and metal stocks that lifted overall sentiment. Meanwhile, broader markets outperformed, with midcap and smallcap indices rising 0.5% and 0.35%, respectively.The BSE Sensex rose 208 points to close the session at 84,274 or 0.25% higher, while the Nifty 50 gained 68 points or 0.26% points to end the day at 25,935.On the 30–share Sensex, Eternal rose over 5% to end the session as the top gainer on the index. Tata Steel followed suit with a rise of 2.82%, while M&M and Tech Mahindra gained more than 1.5% each. HCL Tech, Bajaj Finance, Bharti Airtel, and Adani Ports fell up to 2% on Tuesday.Expert viewsVinod Nair, Head of Research, Geojit Investments said today’s rise was supported by the US trade agreement and positive cues from key Asian markets. A strong resurgence in FII inflows, coupled with rupee appreciation, is further bolstering the investor sentiment, although intermittent profit-booking was visible across sectors. With tariff-related concerns largely easing, the near-term market trajectory will hinge on Q3 earnings, which have been mixed and below expectations so far. Investors are now focused on the combined impact of recent fiscal and monetary measures to revive earnings momentum in the coming quarters."Global MarketsAsian equities moved higher on Tuesday, with gains led by Tokyo markets extending their rally after Japanese Prime Minister Sanae Takaichi’s decisive election win over the weekend. MSCI’s broad Asia-Pacific index excluding Japan rose 0.6%, while the Nikkei 225 climbed 2.3% for a third straight session to a fresh high. The yen also strengthened for a second consecutive day.European markets opened on a mixed note as investors assessed a wave of corporate earnings announcements. The Stoxx index was largely flat with no clear trend across major markets and sectors, while Germany’s DAX advanced 0.4%.U.S. stock futures traded slightly lower on Tuesday morning after the Dow Jones Industrial Average closed at a fresh record high. Dow futures declined by 25 points, or about 0.04%, while S&P 500 futures slipped 0.06% and Nasdaq 100 futures fell 0.2%.Crude impactOil prices edged higher on Tuesday as traders assessed the risk of potential supply disruptions, with U.S. guidance for vessels passing through the Strait of Hormuz keeping geopolitical tensions between Washington and Tehran in focus.Brent crude futures rose 29 cents, or 0.4%, to $69.33 per barrel by 0916 GMT, while U.S. West Texas Intermediate crude gained 22 cents, or 0.3%, to $64.58 per barrel. “The market is still focused on the tensions between Iran and the U.S.,” said Tamas Varga, oil analyst at brokerage PVM.Rupee vs DollarThe Indian rupee ended 0.2% higher at 90.5775 against the U.S. dollar, compared with its previous close of 90.7575.(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)