Canadian wildfires: 'Smart money is chasing the solutions' to climate change, WH Advisor says

Smoke from Canadian wildfires continues to wreak havoc across much of the East Coast. Ali Zaidi, White House National Climate Advisor says wildfires like these are becoming common due to climate change. Zaidi tells Yahoo Finance Live that climate change is an economic issue and that the "smart money is chasing the solutions" to it.

Video transcript

AKIKO FUJITA: The toxic haze that enveloped New York is now clouded much of Philadelphia, grounding hundreds of flights today and postponing Major League Baseball games there. The smoke coming from Canada, where roughly 400 wildfires have put the country on track for its worst fire season in history. I spoke to White House National Climate Advisor Ali Zaidi about the impact of climate change and asked him how quickly he thinks the air quality is likely to improve. Take a listen.

ALI ZAIDI: Look, we're seeing the effects of these wildfires that are burning in Canada really impact the entire Eastern seaboard above the mid-Atlantic. And the way we look at it, this will probably persist for several days. The unfortunate reality is that this is becoming more and more frequent in our cities and communities all across the country as a result of the changing climate. And this is something folks out West have become accustomed to and folks out East are now experiencing anew.


AKIKO FUJITA: And to that point, there's certainly a lot of people out in California that are looking at the images here saying, well, this looks eerily familiar with what I've experienced-- those other major cities outside of the US who have had to deal with this as well. Can you talk about the impact from climate change? And how much of that, what we saw yesterday, can we peg to the warming temperatures?

ALI ZAIDI: You know, what we've seen as a result of climate change is increasingly severe and frequent droughts. The West is in conditions that are really unprecedented. And we're seeing that in Canada as well.

We're seeing heat waves ravage the country-- Puerto Rico seeing that right now, but that interacts in a very bad way with drought and a lack of precipitation. And these things combine to really fuel wildfires, which have become increasingly frequent and severe across the West and in parts of Canada over the last several decades. We know there is science that tells us that this warming, these drought and heat events-- that the increasing spread of wildfires relate back to things that we are doing to the environment. Putting carbon pollution in the sky has consequences, and we are living those now.

AKIKO FUJITA: In many ways, if this is kind of the new norm we're having to deal with, cities from New York to Philadelphia are learning the business disruptions that are likely to come along with it. We saw flights that were grounded yesterday, sporting events canceled as well. Can you talk to me about that kind of impact that we're likely to see if this is going to become more and more frequent?

ALI ZAIDI: Yeah. Folks often talk about climate change as if it's an environmental issue and an environmental issue alone. It intersects with every aspect of our life. It is a public health issue. Folks see that right now as they put masks on.

But it is also an economic issue that can cost in the trillions of dollars. We've seen climate change disrupt supply chains. We've seen climate change hike up the costs of consumer goods. And we know that the only way to resolve ourselves is to resolve ourselves to shift as quickly as we can to clean energy and to invest, as President Biden has, in resilience and adaptation to the impacts of climate change that we've already unlocked.

But you're absolutely right. This is a supply chain risk. It is a material business risk. And smart money is chasing solutions, not putting its head in the sand.

AKIKO FUJITA: Where do you see the role of the White House? I mean, so much of what we are seeing right now, to your point, is on a very localized level. We know officials in these major cities yesterday scrambling to make sure those that were living there were safe, but also that businesses were operating normally as well. What do you see as the role on the federal level?

ALI ZAIDI: So in dealing with the issues that we have right in front of us, the President has been briefed on this. We've deployed human capital and water bombers, other aerial assets, to support the Canadians. We've activated our National Interagency Fire Center to support response on the fire side.

We're also deploying our EPA. Folks can go to to get real time data using the air monitoring system that we've helped build out under the Biden-Harris administration. Our CDC is activated to support state and local officials with whom we've also been in touch with here from the White House.

So there is a response aspect of this that's playing out in real time. And the President and the Vice President have been animating that with a sense of urgency. And then, of course, the big thing that we can do is tackle the climate crisis, which is why that has been a fundamental pillar and element of this administration's leadership. We've invested the most in clean energy and climate anywhere in history ever under President Biden. That's the root cause. And we've got to get after that.

AKIKO FUJITA: You talk about this being more than just an environmental story. Obviously, there is a huge economic impact. We have seen that play out really on a personal level over in California, where most recently we heard two major insurance companies, Allstate as well as State Farm, essentially pulling out of new coverage.

It's simply too expensive for these insurance companies to try and ensure homeowners who are in very vulnerable areas. There is the argument, of course, about whether, in fact, they should continue to be building there as well. But from a homeowner perspective, this has got to get a lot more costly. And they can't find insurance as well. I mean, talk to me about how you're looking at that from the DC perspective and how the White House is working with local officials to try and mitigate this.

ALI ZAIDI: Well, number one, we know that there are ways to both boost the efficiency and resilience of homes. There are fire wise building code standards. There are water smart building code standards. And one of the things we're working on with state and local officials all across the country, and this has been capitalized by the bipartisan infrastructure law, is an effort to boost the codes with which we build new homes.

So we're putting less strain on the system and we're de-risking these built environment assets. That's going to be an important thing that we do. The second is making sure we're funding the retrofits to existing building stock.

Whether it's on the private side thanks to tax credits included in the Inflation Reduction Act, like the section 179D tax credit, which helps boost energy efficiency of commercial buildings, or it's the direct grants that we're making through the infrastructure law that build resilience into our communities, we've got to rehabilitate our existing infrastructure and assets to harden it to this new reality.

And then we've got to make sure that the market is helping foment solutions as part of this as well. That's why in May of his first year in office, the President signed an executive order on climate related financial risk. In that, he directed his Treasury Department and regulators to take a look and start to do the analysis underpinning how we better understand the physical impacts of a changing climate on the financial markets and our ability to ensure-- and make sure that we're propelling the private sector to come up with solutions.

There are solutions in the space. We've got insurers, for example, in Florida that for over a decade have been helping finance retrofits to adapt homes to hurricane risk. You get a premium discount if you make the investment to bolt and brace your roof.

So there are innovative solutions in the space. We need the market to chase after that. We need the regulatory infrastructure to promote that. What we don't need is a bunch of folks pretending like the problem doesn't exist or denying its impact on our economy and our way of life.

AKIKO FUJITA: And our thanks there to White House National Climate Advisor Ali Zaidi.