Randal K. Quarles, Fed vice president for banking supervision and regulation, was asked about criticism while testifying before House lawmakers on Wednesday. Mr Quarles defended the Fed’s attention to climate change in the context of regulation, calling it a “potential risk” that finance companies and the governments that oversee them must take into account.

“As a regulator, we should look at this risk,” he said, and “develop an analytical framework so as not to respond to political pressures, so that we don’t respond to the headlines, but develop an analysis careful data. piloted frame.

The scale of the new order reflects the many ways in which climate change can put the economy at risk. There are indications that this is already happening.

In Florida, the demand for housing in high-risk coastal areas is starting to lagging behind the rest of the state, with prices that follow. Nationally, banks are transferring more of these coastal mortgages out of their books, selling them to federally backed mortgage lenders Fannie Mae and Freddie Mac – a sign that these banks are aware of the growing risk of default and are passing that risk on to taxpayers.

The insurance market is also feeling the impact of more severe catastrophes. In California, insurers are refuse to cover houses in areas prone to fires, prompting national and local authorities to seek solutions. Other states across the west see signs of similar trends.

In response to these threats, the new decree calls on federal agencies that oversee mortgages to find ways to account for the impact of climate change on these loans. It also asks the Federal Insurance Office, a division of the Treasury Department, to assess climate-related threats facing insurers.

The ordinance also restores a rule set higher standards on the construction of roads, buildings and other federally funded projects in flood-prone areas – a rule that was created by President Barack Obama and then repealed by President Donald J. Trump.

“Americans should be able to know the real risks that extreme weather and rising seas pose to the homes they have invested in,” said Gina McCarthy, Biden’s senior climate change advisor. “Knowing the risks is the first step in actually dealing with them. “

Jeanne Smialek and Alan Report contributed report.