How cutting your credit cards could help the climate

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Earlier this month, four men chained themselves to the gates of a downtown Los Angeles office tower in an act of civil disobedience. As participants in a global protest led by the science community, NASA climatologist Peter Kalmus and three of his colleagues were tackling a company deeply involved in the climate crisis.

It was not a government building where the protest took place, and it was not a power plant or the headquarters of a major oil and gas producer. It was the Chase Bank building. JPMorgan Chase is one of the largest investment banks in the world.

Climate activists have strategically targeted big banks in recent years, although financial support for fossil fuels has not drastically decreased over this period. Yet some right-wing groups and oil-producing states, alarmed by the gains made by activists, are fighting back aggressively by sanctioning financial companies that eschew fossil fuels.

The theory behind the concentration of climate activism on big banks hinges on the fossil fuel industry’s formidable appetite for capital. While pressure on banks can make financing oil and gas production less profitable – or, better, socially unacceptable – it could slow the expansion of fossil fuels and tip the balance in favor of renewable energy investments. and electrification.

If this seems like a circuitous route to phasing out fossil fuels, keep in mind that for most of these big banks, oil and gas financing only makes up a small fraction of their loan portfolio. . Getting out of fossil fuels completely would not require a major rethink of their economic model as would be the case for an oil giant like ExxonMobil or Shell.

To date, protests against financial institutions have had limited success. Major banks have made public statements about their ambition to become net zero, and they have made substantial commitments to finance renewable energy. JPMorgan Chase has just announced that its new headquarters in Manhattan will be an all-electric, zero-emissions building.

Getting out of fossil fuels completely would not require a major rethink of their economic model as would be the case for an oil giant like ExxonMobil or Shell.

But despite all the green positioning, the banks continue to develop their activity in fossil fuels. A new report from the Rainforest Action Network shows that the banking sector pumped $742 billion into fossil fuels in 2021 alone, roughly the same amount as in 2020. Since the 2015 Paris Agreement, the oil, gas and coal financing exceeded $4 trillion.

Prominent climate activist Bill McKibben recently designed a new grassroots organization, ThirdAct.org, whose first campaign targets four banks – Citi, Wells-Fargo, Bank of America and JPMorgan Chase – which provide the bulk of the fossil fuel financing. industry.

ThirdAct.org specifically targets people over the age of 60, the demographic group with the greatest financial assets and, therefore, the largest in the financial world. The hope is that an orchestrated exodus of customers from the four banks by large numbers of relatively affluent baby boomers will strike a chord in corporate boardrooms.

The movement to wean the finance industry off of fossil fuel financing has already struck a chord in some state legislatures. NPR reported on a recent Texas law — passed at the behest of oil and gas interests — barring financial firms that restrict fossil fuel investments from doing business with the state. (Senator Ted Cruz is a big fan of the new legislation.)

According to the Center for Media and Democracy, the Texas law originated from a model bill developed by the Texas Public Policy Foundation and the American Legislative Exchange Council, which is connected to Koch. The New Republic reports that passing a similar proposed law in West Virginia would bolster dying coal companies and burden pension funds with risky investments.

The Texas law validates the premises of McKibben’s strategy with ThirdAct.org by highlighting Big Oil’s sensitivity to anything that would impede its access to loans or bond underwriting. Other lobby groups (BankFWD and Stop the Money Pipeline, for example) are also working to starve the fossil fuel industry of capital.

At the Chase Bank building in Los Angeles, protesters who chained themselves to the front doors were removed and arrested by a phalanx of cops in riot gear, but the video of an impassioned speech that scientist Peter Kalmus gave at the scene has gone viral.

Big banks have become an important front in the climate movement. Taking scissors to some of the credit cards in your wallet might just turn out to be a significant act of resistance.

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