What do Elizabeth Warren, Barney Frank, and Ed Markey have in common? The obvious answer has to do with the US Senate. The not so obvious reality is an opportunity to accelerate the shift from fossil fuel-based energy to renewable alternatives in collaboration with big banks.
What do big banks have to do with climate change? Two words: financed emissions. Rainforest Action Network (RAN) published a recent report that makes the connection clear:
The banking sector accelerates global climate change through its ‘financed emissions,’ the greenhouse gas emissions induced by bank loans, investments, and financial services…banks that finance coal-fired electric utilities or fossil fuel producers bear co-responsibility for the massive quantities of greenhouse gases emitted by these companies. Major banks therefore have financed emissions footprints that are much larger than their operational climate impacts and expose them to both reputational and financial risks.
In other words, big banks are keeping the most polluting energy companies afloat – and, so far, have prevented the least polluting alternatives from growing to meaningful scale. As the RAN report clarifies, banks can enlist in a program through the World Resources Institute to both measure current emissions stemming from financing, and set reduction targets. By working across the public and private sector, lawmakers and financial institutions can speed up the transition.
It’s not that there aren’t wind, solar, and geothermal options or efficiency incentives on the table, but banks don’t generally favor these over century-old technologies like coal. Much of the money that could finance the renewables—and the infrastructure needed for their widespread use–is tied up in the wrong investments.
Massachusetts is home to several of the top executives of the largest bank in the country – and the leading financier of the U.S. coal industry – Bank of America. If the company took a leadership role in addressing its financed emissions, other institutions would follow suit.
As both popular and political discussions in the U.S. finally move away from whether or not climate change is happening to which climate policies to adopt, the economics of climate change must remain front and center. Anyone claiming to be a responsible public servant will need to do just that.
We have no time to waste. When it comes to taking to bold actions to shift our economy away from fossil fuels, we need leaders like Warren, Frank and Markey, who can support solutions to keep the largest banks in check and end the legacy of propping up old energy infrastructure that poses threats to our communities.
Constituents are certainly giving their blessing. Americans across generations are volunteering for campaigns, speaking out at rallies and sitting-in, all to demand climate accountability from our elected-leaders and corporate executives. With the prospect of shiny new Massachusetts leadership and an urgent need to move climate action forward in Washington, we may be in luck.
We have all the right people in position to take these initiatives forward. Consider Warren as the big bank watchdog, Frank as the big bank insider, and Markey as the climate champion. We have assembled an all-star cast to lead the charge on reducing the disruptions from an unstable climate and work toward transformative policies for a sustainable economy.
Imagine what can happen if Senator Warren teams up with both an interim Senator Frank and a Senator-elect Markey, particularly around holding banks accountable for their climate-forcing role. Now imagine what you can do to back them up.