Lawmakers and Groups Demand Urgent Action by Fed to Protect Economy From Climate Risks

Lawmakers and Groups Demand Urgent Action by Fed to Protect Economy From Climate RisksThe Federal Reserve must do its job, steering the economy away from disaster by ending fossil fuel finance.

An aerial view shows Marathon Petroleum Corp.'s Los Angeles Refinery, the state's largest producer of gasoline, on April 22, 2020 in Carson, California. (Photo: David McNew/Getty Images)

Dozens of green groups and 25 progressives in Congress sent a pair of letters Thursday to Federal Reserve Chair Jerome Powell calling for much bolder efforts to protect U.S. financial institutions and the economy from risks posed by the climate crisis.

"It's unthinkable that banks are still financing new fossil fuel development when we are crystal clear that we are on a path to climate chaos."
—Tracey Lewis, 350.org

The Fed recently joined the Network for Greening the Financial System, which has been called "the climate change club for central banks." However, as a new global scorecard from the group Positive Money reveals, the U.S. central bank has a long way to go. The Fed received a D-, ranking 11th overall and 13th among G20 countries.

"The Federal Reserve Board has a crucial role to play in protecting the economy and the public from material risks, including those from climate change, as you highlighted in your November 2020 press conference," the 64 groups write (pdf) to Powell.

While welcoming recent steps including the creation of the Supervision Climate and the Financial Stability Climate committees, the letter says that "we are concerned by indications that the board may not view climate-related financial risk as requiring urgent action."

Meeting the 1.5°C temperature goal of the Paris climate agreement, to which President Joe Biden has recommitted the United States, "will require rapid, dramatic changes in multiple sectors of the economy, which could threaten financial stability if not managed properly," the letter notes.

"Critical to mitigating both physical and transition climate risk is reducing financial institutions' support for high-carbon energy sources and redirecting finance toward sustainable alternatives," the groups assert, adding that "the board should not be in the business of rescuing fossil fuel companies without a plan to phase out their contributions to greenhouse gas pollution in accordance with a 1.5°C pathway."

The Fed talks about how its "early days" on climate change so often, it's starting to feel like Groundhog Day.

Signatories to the letter included 350.org; Public Citizen, which released a supplement (pdf) to the Green Central Banking Scorecard detailing what the Fed can do; and Rainforest Action Network (RAN), a leading force behind a recent report revealing that big banks have poured over $3.8 trillion into fossil fuels since the Paris agreement.

RAN climate and energy senior campaigner Jason Opeña Disterhoft pointed out that "since the Paris climate agreement, U.S. banks are the world's four biggest lenders and underwriters to the fossil fuel industry, and six of the top 15, to the tune of $1.2 trillion over the past five years."

"Wall Street is driving the climate crisis, and therefore threatening the safety, soundness, and stability of the financial system," he added. "It's well past time for the Federal Reserve to stop sitting on its hands. The Fed must fulfill its mandate by using the full range of its tools to stop Wall Street fueling climate risk."

Tracey Lewis, senior policy analyst at 350.org, concurred. "It's unthinkable that banks are still financing new fossil fuel development when we are crystal clear that we are on a path to climate chaos," she said. "The Federal Reserve must do its job, steering the economy away from disaster by ending fossil fuel finance."

The results are in from the #GreenCentralBanking scorecard, and the US is failing.

The U.S. central bank's "abysmal grade" on the scorecard "is a warning call," said Yevgeny Shrago, policy counsel for Public Citizen's Climate Program. "The Federal Reserve is falling behind on addressing the threats from climate change—but with swift action, the U.S. can jump to the head of the class."

The groups' letter calls on the Fed to "accelerate action" in three core areas ahead of November's United Nations Climate Change Conference (COP26):

  • Implement supervisory and prudential measures to increase the resilience of the financial system to climate risks and to reduce the risks to the economy and the planet the financial system creates by financing of fossil fuels and deforestation;
  • Incorporate climate risk into the Federal Reserve's monetary policy; and
  • Encourage and support bank investment aimed at limiting global temperature rise to 1.5°C, with a particular emphasis on lending to low-income communities and communities of color.

Led by Reps. Mondaire Jones (D-N.Y.) and Rashida Tlaib (D-Mich.), the lawmakers delivered a similar call to action, writing (pdf) that "without concrete objectives and measurable changes to the supervisory framework and monetary policy activities carried out by the Fed, we worry progress will be both too slow and insufficient in scale to adequately address the reality of the crisis our economy and our planet face."

While praising the recently created committees and raising concern about the Fed's portfolio decisions, the lawmakers' letter also endorses the advocacy groups' demands.

"We echo the calls made by climate activists and concerned citizens for further action to protect our financial system, our economy, and our planet from the devastating impacts of climate change," their letter to Powell says, providing the same action list. "We look forward to working with you to create financial institutions and an economy at large prepared for and resilient to the risks posed by climate change."

In an email to Morning Consult—which exclusively reported on both letters—Tlaib noted that Powell has previously been receptive to working with lawmakers.

"Given their financial stability objectives and supervisory role over financial institutions, the Fed clearly has the ability to incentivize and enforce a reduction in the financing of environmentally damaging activities," she said.

Jones told the outlet that he plans to "use every lever" at his disposal to address the issue, adding that "every institution must do its part to reduce carbon emissions and promote sustainability."

As for Republican efforts to block any related financial regulation, Jones said that the planetary crisis threatens the central bank's objectives to maximize employment, stabilize prices, and moderate inflation, "which is why the Fed can, and must, do more to prioritize climate action."

The letters came as Politico reported that Powell said Wednesday: "One of our goals is to make climate change a part of our regular financial stability framework."

Former Fed Chair and current Treasury Secretary Janet Yellen said during her first appearance as the head of the Financial Stability Oversight Council on Wednesday that climate change is "an existential threat" and "our financial system must be prepared for the market and credit risks of... climate-related events."

That warning was also a key message in a letter that 145 groups sent Tuesday urging U.S. Special Presidential Envoy for Climate John Kerry to help end "the flow of private finance from Wall Street to the industries driving climate change around the world—fossil fuels and forest-risk commodities."

Related Books

Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming

by Paul Hawken and Tom Steyer
9780143130444In the face of widespread fear and apathy, an international coalition of researchers, professionals, and scientists have come together to offer a set of realistic and bold solutions to climate change. One hundred techniques and practices are described here—some are well known; some you may have never heard of. They range from clean energy to educating girls in lower-income countries to land use practices that pull carbon out of the air. The solutions exist, are economically viable, and communities throughout the world are currently enacting them with skill and determination. Available On Amazon

Designing Climate Solutions: A Policy Guide for Low-Carbon Energy

by Hal Harvey, Robbie Orvis, Jeffrey Rissman
1610919564With the effects of climate change already upon us, the need to cut global greenhouse gas emissions is nothing less than urgent. It’s a daunting challenge, but the technologies and strategies to meet it exist today. A small set of energy policies, designed and implemented well, can put us on the path to a low carbon future. Energy systems are large and complex, so energy policy must be focused and cost-effective. One-size-fits-all approaches simply won’t get the job done. Policymakers need a clear, comprehensive resource that outlines the energy policies that will have the biggest impact on our climate future, and describes how to design these policies well. Available On Amazon

This Changes Everything: Capitalism vs. The Climate

by Naomi Klein
1451697392In This Changes Everything Naomi Klein argues that climate change isn’t just another issue to be neatly filed between taxes and health care. It’s an alarm that calls us to fix an economic system that is already failing us in many ways. Klein meticulously builds the case for how massively reducing our greenhouse emissions is our best chance to simultaneously reduce gaping inequalities, re-imagine our broken democracies, and rebuild our gutted local economies. She exposes the ideological desperation of the climate-change deniers, the messianic delusions of the would-be geoengineers, and the tragic defeatism of too many mainstream green initiatives. And she demonstrates precisely why the market has not—and cannot—fix the climate crisis but will instead make things worse, with ever more extreme and ecologically damaging extraction methods, accompanied by rampant disaster capitalism. Available On Amazon

From The Publisher:
Purchases on Amazon go to defray the cost of bringing you InnerSelf.comelf.com, MightyNatural.com, and ClimateImpactNews.com at no cost and without advertisers that track your browsing habits. Even if you click on a link but don't buy these selected products, anything else you buy in that same visit on Amazon pays us a small commission. There is no additional cost to you, so please contribute to the effort. You can also use this link to use to Amazon at any time so you can help support our efforts.

 

This article originally appeared on Common Dreams

enafarzh-CNzh-TWdanltlfifrdeiwhihuiditjakomsnofaplptruesswsvthtrukurvi

follow InnerSelf on

facebook icontwitter iconyoutube iconinstagram iconpintrest iconrss icon

 Get The Latest By Email

Weekly Magazine Daily Inspiration

POLITICS

UK Court Urged To Respect 1.5°c Climate Limit
UK Court Urged To Respect 1.5°c Climate Limit
by Alex Kirby
The UK faces growing pressure not to expand Heathrow airport but to respect the 1.5°C limit agreed on global heating.
Why Sustainability Rankings Don't Always Identify Sustainable Companies
Why Sustainability Rankings Don't Always Identify Sustainable Companies
by Rumina Dhalla and Felix Arndt, University of Guelph
As consumers and investors, we often look at environmental, social and governance (ESG) rankings to guide our purchase,…
How To Stop Psychopaths and Narcissists From Winning Positions of Power
How To Stop Psychopaths and Narcissists From Winning Positions of Power
by Steve Taylor, Leeds Beckett University
In the past, this was mostly due to hereditary systems which assigned power to kings and lords and others, who often…
How Children Are Taking European States To Court Over The Climate Crisis – And Changing The Law
How Children Are Taking European States To Court Over The Climate Crisis – And Changing The Law
by Aoife Daly, University College Cork et al
Even before Greta Thunberg launched her school strike for climate at age 15, youth activists have been key players in…
If 80% Of Australians Care About Climate Action, Why Don't They Vote Like It?
If 80% Of Australians Care About Climate Action, Why Don't They Vote Like It?
by Rebecca Colvin and Frank Jotzo, Australian National University
Poll after poll suggests a large majority of Australians cares about climate change. Yet in recent federal elections,…
Keeping Hope Of 1.5°c Limit Alive Is Vital To Spurring Global Climate Action
Keeping Hope Of 1.5°c Limit Alive Is Vital To Spurring Global Climate Action
by Richard Black, Imperial College London and Catherine Happer, University of Glasgow
Ever since governments at the 2015 Paris climate summit set 1.5°C as the desired limit for global warming, scientists…
Lawmakers and Groups Demand Urgent Action by Fed to Protect Economy From Climate Risks
Lawmakers and Groups Demand Urgent Action by Fed to Protect Economy From Climate Risks
by Jessica Corbett
The Federal Reserve must do its job, steering the economy away from disaster by ending fossil fuel finance.
Fossil Fuel Companies Got $8.2 Billion in Tax Bailouts—Then Fired Over 58,000 Workers
Fossil Fuel Companies Got $8.2 Billion in Tax Bailouts—Then Fired Over 58,000 Workers
by Jessica Corbett
It's time to stop subsidizing them and start facing the climate crisis, says a BailoutWatch analyst.

LATEST VIDEOS

The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
by Alan N Williams, et al
The latest report from the Intergovernmental Panel on Climate Change (IPCC) states that without a substantial decrease…
Earth Has Stayed Habitable For Billions Of Years – Exactly How Lucky Did We Get?
Earth Has Stayed Habitable For Billions Of Years – Exactly How Lucky Did We Get?
by Toby Tyrrell
It took evolution 3 or 4 billion years to produce Homo sapiens. If the climate had completely failed just once in that…
How Mapping The Weather 12,000 Years Ago Can Help Predict Future Climate Change
How Mapping The Weather 12,000 Years Ago Can Help Predict Future Climate Change
by Brice Rea
The end of the last ice age, around 12,000 years ago, was characterised by a final cold phase called the Younger Dryas.…
The Caspian Sea Is Set To Fall By 9 Metres Or More This Century
The Caspian Sea Is Set To Fall By 9 Metres Or More This Century
by Frank Wesselingh and Matteo Lattuada
Imagine you are on the coast, looking out to sea. In front of you lies 100 metres of barren sand that looks like a…
Venus Was Once More Earth-like, But Climate Change Made It Uninhabitable
Venus Was Once More Earth-like, But Climate Change Made It Uninhabitable
by Richard Ernst
We can learn a lot about climate change from Venus, our sister planet. Venus currently has a surface temperature of…
Five Climate Disbeliefs: A Crash Course In Climate Misinformation
The Five Climate Disbeliefs: A Crash Course In Climate Misinformation
by John Cook
This video is a crash course in climate misinformation, summarizing the key arguments used to cast doubt on the reality…
The Arctic Hasn't Been This Warm For 3 Million Years and That Means Big Changes For The Planet
The Arctic Hasn't Been This Warm For 3 Million Years and That Means Big Changes For The Planet
by Julie Brigham-Grette and Steve Petsch
Every year, sea ice cover in the Arctic Ocean shrinks to a low point in mid-September. This year it measures just 1.44…
What Is A Hurricane Storm Surge and Why Is It So Dangerous?
What Is A Hurricane Storm Surge and Why Is It So Dangerous?
by Anthony C. Didlake Jr
As Hurricane Sally headed for the northern Gulf Coast on Tuesday, September 15, 2020, forecasters warned of a…

LATEST ARTICLES

The US Electric Power Sector Is Halfway To Zero Carbon Emissions
The US Electric Power Sector Is Halfway To Zero Carbon Emissions
by Bentham Paulos, Lawrence Berkeley National Laboratory et al
So far 17 states plus Washington, D.C., and Puerto Rico have adopted laws or executive orders setting goals for…
Hydrogen Is One Future Fuel Oil Execs And Environmentalists Could Both Support As Rival Countries Search For Climate Solutions
Hydrogen Is One Future Fuel Oil Execs And Environmentalists Could Both Support As Rival Countries Search For Climate Solutions
by John Ballantine, Brandeis University
The 2015 Paris Agreement was a groundbreaking diplomatic effort – 196 countries committed to prevent average…
Climate Change Threatens Coffee – But We’ve Found A Delicious Wild Species That Could Help Save Your Morning Brew
Climate Change Threatens Coffee – But We’ve Found A Delicious Wild Species That Could Help Save Your Morning Brew
by Aaron P Davis, Royal Botanic Gardens, Kew
The world loves coffee. More precisely, it loves arabica coffee. From the smell of its freshly ground beans through to…
Competition Heats Up In The Melting Arctic, And The Us Isn't Prepared To Counter Russia
Competition Heats Up In The Melting Arctic, And The US Isn't Prepared To Counter Russia
by Rockford Weitz, Tufts University
For decades, the frozen Arctic was little more than a footnote in global economic competition, but that’s changing as…
Global Farming Feels The Impacts Of Global Heating
Global Farming Feels The Impacts Of Global Heating
by Tim Radford
Global heating has already set back farming around the world, and wiped out seven years of steady advance.
Interstate Water Wars Are Heating Up Along With The Climate
Interstate Water Wars Are Heating Up Along With The Climate
by Robert Glennon, University of Arizona
Interstate water disputes are as American as apple pie. States often think a neighboring state is using more than its…
As Extreme Fires Transform Alaska's Boreal Forest, More Aspen And Birch Are Coming In And That Can Slow Fires And Their Climate Impact
As Extreme Fires Transform Alaska's Boreal Forest, More Aspen And Birch Are Coming In And That Can Slow Fires And Their Climate Impact
by Jill Johnstone, University of Saskatchewan et al
Fire is a hot topic these days, particularly when it comes to the boreal forest, the vast expanse of trees that…
Would A Carbon Tax On Imports Be The Climate Solution Officials Expect?
Would A Carbon Tax On Imports Be The Climate Solution Officials Expect?
by Timothy Hamilton, University of Richmond
The European Union is considering a new tax on imports as it tries to fight climate change, and the U.S. is raising…

 Get The Latest By Email

Weekly Magazine Daily Inspiration

New Attitudes - New Possibilities

InnerSelf.comClimateImpactNews.com | InnerPower.net
MightyNatural.com | WholisticPolitics.com
Copyright ©1985 - 2021 InnerSelf Publications. All Rights Reserved.