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It was likely too much to hope that the Biden Administration, as it tries to get a handle on climate change, might find some help from Wall Street. Instead, last week, we saw financial heavyweights turn in a performance so rigid and so short-sighted that it makes one wonder whether capitalism in anything resembling its current form can, or should, survive.
The scene was a virtual forum organized by the Institute of International Finance, and the participants were the people running the world’s biggest banks, investment houses, and insurance companies. The backdrop was the heightened effort by activists in the past eighteen months to get them to stop loaning money to, buying the stocks of, and underwriting the expansion plans for the fossil-fuel industry. (Another backdrop was one of the hottest years ever recorded on Earth, a year that also saw the biggest wildfires and the most Atlantic hurricanes.) The Biden Administration has begun to make noises about supporting those activist efforts with new regulations at the Federal Reserve, the Department of the Treasury, and the Securities and Exchange Commission. And now, the money men were saying, essentially, go to Hell. Not in the obvious, gloating way of the Texas gas exec who boasted last week of “hitting the jackpot with some of these incredible prices.” Nothing quite so crude, yet far more ominous.
Larry Fink, the C.E.O. of BlackRock, warned against a “full divestiture” from fossil-fuel stocks, because it would be “greenwashing.” Not only is that statement contrary to his company’s own policies—BlackRock has made a conditional promise to divest from some coal-mining companies—it’s also a remarkably Orwellian use of an Orwellian idea. Greenwashing, in truth, is what Fink and his peers engage in when they announce their calls for Paris compliance or for net zero carbon emissions by 2050 or the other dodges that, for the time being, allow them to keep lending vast sums of money to the fossil-fuel industry while insisting that they’re very worried.
Here, for instance, is Brian Moynihan, the C.E.O. of Bank of America, which is the world’s fourth-largest financier of fossil fuels, having handed the sector more than a hundred and fifty-six billion dollars last year: “We have to have a balanced, fair transition across the globe and realize it’s going to take time and investment and innovation. And that’s what capitalism brings.” Actually, what capitalism has helped bring during the past decades (besides incredible economic inequality) is a rise in the global average temperature of nearly two degrees Celsius, record lows for summer sea ice extent in the Arctic, and a jet stream so destabilized that, in mid February, Houston can be colder than Anchorage.
And now capitalism—or so the scientists tell us—does not have time. It has nine years to deliver a world in which emissions are cut in half; if it doesn’t, then the talk of “Paris” will be utterly meaningless, because the targets we set there just six years ago will be unachievable. These institutions, to play their part, would have to set aside only a small part of their business. (A hundred and fifty-six billion dollars is, stunningly, a small part of Bank of America’s business—but a rant about the concentration of economic power will have to wait for another day). But they are, simply put, too greedy to do that. I suppose a politer way of saying it would be that they are too invested in their current business model. Forget about reading the room (though one hopes that they’re underestimating Biden’s moxie); they’re not reading the planet.
Two things will happen. One, peaceful protesters—eventually set free by vaccines—will turn their full attention to these institutions. (Full disclosure: one of my last trips before the coronavirus lockdown was to jail, last January, for sitting down in the lobby of a Chase Bank branch to protest the bank’s position as the fossil-fuel industry’s largest lender). Two, political pressure will mount on the Biden Administration to prod these institutions before they do more damage—they’d like to move slowly, but Washington must force them to go fast. Because nine years is not long. It is, more or less, two Presidential terms.
We have to move fast because the fossil-fuel industry mounted a huge campaign of deception and denial, which long paralyzed our political system. (Politicians beholden to those companies are still engaged in that campaign, as the blizzard of misinformation about wind power coming out of Texas last week made clear.) Last week, Michael Ryan, who has headed up the COVID-19 effort for the World Health Organization, got an award from Trócaire, a charitable agency of the Irish Catholic Church that, among other things, led a successful effort to divest that nation’s public accounts from fossil fuels. Ryan talked about both the coronavirus and the climate, and he did so bluntly. “We are pushing nature to its limit. . . . We’re pushing communities to their limits. We’re stressing the environment,” he said. “And we’re doing it in the name of globalization and some sense of chasing that wonderful thing that people call economic growth. In my view, that’s becoming a malignancy.” The “we,” though, is not as broad as Ryan’s brogue. Much of the “we” doing the damage works on Wall Street.
“We’re writing checks that we cannot cash,” Ryan said. That’s a metaphor, and also a fact.
Passing the Mic
Robin Chase is an entrepreneur who co-founded Zipcar, the world’s largest car-sharing operation. However, she spends much of her time on policy. Her book, “Peers Inc,” showed how we might build a sharing economy that benefits communities. In the wake of General Motors’ big announcement last month that it will go all electric by 2035, she is an important voice to hear from. (Our e-mail conversation has been edited for length.)
G.M.’s going to build nothing but electric cars and trucks. That seems like a big deal, but is it less of a triumph than one might assume?
I’d call it politically motivated, rather than triumphant. Before Joe Biden’s election, G.M. was at the forefront of industry calls for reducing the previously negotiated fuel-economy (CAFE) standards and used climate deniers to help them make the case. It also was one of a group of car companies to join the Trump Administration’s lawsuit to deny California its historical legal right to set its own (tighter) emissions requirements. But, just days after Biden’s victory became clear, G.M. dropped out of the lawsuit.
And can we ever forgive G.M. for turning the military Humvee into a consumer product—with its outsized footprint, weight, emissions, and inexcusable impact on the killing and maiming of people in crashes?
All that said, I was absolutely delighted to read about G.M.’s recent—and leading—announcement that it has targeted 2035 as the year by which it will have completed its transition to making and selling only electric vehicles. G.M. is the largest legacy car company to make such an early and complete commitment.
Are there ways to rethink what we actually need out of transportation, so that fewer people have their own cars? You’ve been touting something you’re calling the freedom network—explain.
The problem with a car-only solution is that it still has us manufacturing and moving a hundred-and-fifty-pound person in three thousand pounds of metal. Most commuter car trips in the U.S. are with the driver alone, according to a 2017 study, and nearly half of all car trips are three miles or shorter. It is crazily inefficient and expensive.
I’ve also been struck by the reality that, over the last hundred years, we’ve made it safer to cross the ocean than to cross the street. The vast majority of Americans do not have access to a bike lane or bike path.
No matter where we live or who we are, without a safe, low- (or no-) cost ability to get around, there is a very real sense of feeling trapped and dependent. I think it’s this visceral understanding of our loss of autonomy that is one of the reasons people get so angry and adamant about proposed changes to the gas tax, parking, bike and bus lanes, or transit improvements.
