If climate scientists, policy makers, and environmental activists haven't made it clear that our planet is pretty much doomed, maybe Wall Street will: bank tycoons are the latest — and perhaps the most self-interested — to join the chorus sounding the alarm on the now grim prospect of avoiding a climate catastrophe.
Recent reporting by Scientific American has found that finance titans Morgan Stanley, JPMorgan Chase and the Institute of International Finance have all but given up on building a sustainable future. Instead, they're pivoting their strategies to stay profitable on a rapidly warming Earth, through investments in sectors like air conditioning, while pulling away from clean energy pledges, which were previously an industry standard.
The shift in sentiment comes as the Paris Agreement — the massive international accord to hold global warming below 2 degrees Celsius (3.6 degrees Fahrenheit), an already low bar — is looking like a pipe dream. Recent scientific research has shown that we've likely already passed a raise of 1.5 degrees Celsius, and are on pace to rapidly overshoot the 2 degree benchmark.
"We now expect a 3 degree world," Morgan Stanley analysts wrote in an analysis of HVAC stock futures, echoing an earlier analysis by JPMorgan Chase, which noted that we're in a "new climate era" thanks to the certainty of global warming.
It's probably no surprise given US policymakers' regression into straight-up climate change denial. Though we can thank lawmakers of all stripes for the backslide, the new administration led by Donald Trump is proudly spearheading the effort, removing the US from the Paris Agreement, attacking renewable energy, and even hollering that climate change could be "good."
Big banks aren't the only financial institutions reneging on climate change. For the past few years, major insurance companies have been reeling from increasing costs and alarming risk forecasts related to our rapidly warming earth. States like California and Florida have had to deal with an exodus of insurers in high-risk areas as increased wildfires, mudslides, and hurricane flooding scares business away.
Insurance giants have blamed high-risk home locations and over-regulation in order to exploit climate tragedies for taxpayer bailouts and deregulation. Climate protestors and consumer watchdogs, meanwhile, have gone after insurance companies for continuing to underwrite fossil fuel giants, even as they cry foul at the unstable market caused by climate change.
All told, it's a crystal-clear example of the contradiction between business goals and climate action. As billionaires loot local water supplies and tech monopolies dump mountains of e-waste into the ground, it's no wonder financial institutions are taking the hint and turning their backs on climate promises.
As a spokesperson for the Institute of International Finance told SciAm, the "banking industry can support the transition from fossil fuels to clean energy but capital will only move 'at scale when the economics make sense.'"
Translation: at this point, it's more profitable to loot the earth than to save it.
More on climate change: Bill Gates Gives Up on Climate Change
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