Peter Orszag, former budget director under President Barack Obama, warns that the future fallout from climate change poses a greater financial risk to the United States than underfunded entitlement programs such as Social Security and Medicare.

"The risk of catastrophic climate change ... [is] the 10 percent or 20 percent chance that we will have no idea what will happen, and we're taking a massive risk," he told CNBC's "Squawk Box" Tuesday.

“After decades of struggling negotiations and the failure to come to an understanding at a summit in Copenhagen six years ago, some form of agreement — likely to be the strongest global climate pact yet — appears all but assured by mid-December,” CNBC reported.

"It's very simple: We need to tax carbon," said Orszag, currently vice chairman of corporate and investment banking at Citigroup. "You can't expect people to do it completely voluntarily."

Addressing a question about when coastal real estate or insurance premiums on those properties might reflect the risks of climate change, he said, "Financial markets are not very good at pricing risks that are two, three, four or five decades out."

To be sure, Newsmax Finance Insider Peter Morici warns that President Obama plans to sign another bad deal for America st the 2015 Paris Climate Conference (COP21).

"The United States will pledge to reduce greenhouse gas emissions 26 to 28 percent by 2025. That won’t stop global warming, and will likely make its consequences worse for most Americans," Morici warned.

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