Frank Elderson: Discussing financial risks during wildfire

Dinner speech by Mr Frank Elderson, Executive Director of Supervision of the Netherlands Bank, at the FRBSF conference "The economics of climate change", San Francisco, 8 November 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

At the conference 'The economics of Climate Change' the San Fransisco FRB invited Frank Elderson for a keynote dinner speech. Frank Elderson, chair of the NGFS and board member of De Nederlandsche Bank, showed how climate change - as a twofold driver of financial risk - is a serious topic for NGFS members around the globe.

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The smell was inevitable. The smell of smoke.

The smell of wildfires. I have been to your beautiful state before. I remember seeing the magnificent Golden Gate Bridge rising up out of the San Francisco fog.

But now in Europe and around the world we see images of the bridge shrouded not in the famous fog, but in a smoky haze. And this smoke is so heavy that you can't only see it. You can smell it, even taste it. And it is the smell of an omnipresent catastrophe. Behind this smell are stories of despair.

It is the smell of the burning vineyards and buildings of the historic Soda Rock winery, which stood for 150 years. It is the smell of Marcella and James Shirk's home going up in flames, which they had lived in for the last 42 years. It is the smell of fire threatening the Rivas family home again. The same home they watched burn two years ago and painstakingly rebuilt. It is the smell of the smoke that has kept schools across the state closed for days and sometimes weeks. Interrupting the education of one in six children in California. It is the smell that has prompted enforced power outages, leaving thousands of families and businesses without power. It is the smell of entire destroyed communities, built on the wildland-urban interface because it is too expensive to build in town.