John Macomber, a senior lecturer in the finance unit at Harvard Business School, believes we may be on the verge of a collapse in housing prices and an ensuing financial crisis — this time caused by our failure to acknowledge and confront climate change. In a phone interview and a written email exchange, he shared his reasoning and what the incoming Biden administration can do to prevent this scenario.
Are We On the Verge of Another Financial Crisis?
How climate change could spark a collapse in housing prices much like the one that brought down the financial system in 2008.
December 18, 2020
Summary.
In 2008, a collapse in housing prices triggered a global financial crisis. John Macomber, a senior lecturer at Harvard Business School, believes history may be about to repeat itself — this time caused by our failure to acknowledge and confront the perils posed by a changing climate. The financial system hasn’t correctly priced in the risk from fires, floods and storms. If the correction happens suddenly, the collapse in housing prices could spread through the financial system. The incoming presidential administration must take politically unpopular steps to avoid this scenario.