A tense exchange unfolded between Rep. Sylvia Garcia and Scott Bessent during a hearing focused on financial risk and climate policy, as Garcia questioned whether federal regulators are taking steps to address potential impacts of climate change on access to mortgages and credit.
Garcia asked Bessent what actions, if any, are being taken to prevent households from losing access to financing in parts of the country that could be affected by climate-related risks.
“What if anything are you all doing to address the risk to households of mortgages and other forms of credit becoming unavailable in certain regions of the country due to climate change?” Garcia asked.
Bessent responded by challenging the foundation of prior climate-based financial regulations, asking Garcia whether she was familiar with a key study that had influenced earlier policy decisions.
“Again, Congresswoman, are you familiar with KLW 24?” Bessent asked.
Garcia replied simply, “No.”
Bessent then explained that the study had played a central role in shaping climate-related financial oversight but has since been discredited.
“It was the base for everything that was done with climate and with all the climate proposed climate legislation, and it has been discredited,” Bessent said. “So everything that FSOC (Financial Stability Oversight Council) previously did based on climate has been discredited.”
Garcia pressed Bessent on who had discredited the research.
“Who discredited it?” she asked.
Bessent answered by pointing to the publication that originally released the study.
“Nature Magazine,” Bessent said.
“Nature magazine has retracted the economic commitment of climate change more than 18 months after first learning that the paper was fatally flawed, with officers acknowledging that its errors are too substantial for a correction.”
Garcia expressed skepticism about relying on the publication as a guide for public policy, indicating she was unfamiliar with its role in shaping regulatory decisions.
“I’m sorry, I’m not familiar with Nature magazine,” Garcia said. “We’re relying on the Nature magazine to determine public policy?”
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The exchange highlighted broader disagreements over the role of climate risk in financial regulation and the credibility of research used to justify regulatory actions.
Bessent’s remarks focused on the validity of prior studies and their influence on the Financial Stability Oversight Council’s approach, while Garcia emphasized concerns about potential real-world consequences for homeowners and borrowers.