Wednesday, January 22, 2020

Against a carbon bailout

If we are to avoid making the planet uninhabitable, we need to cut carbon emisisons fast. Which basicly means putting the fossil fuel industry - coal, gas, and oil - out of business. But this means that the banks and other lenders who have bankrolled the industry's environmental destruction will lose their money. So naturally, they're using their international mouthpieces, the IMF and Bank of International Settlements, to demand a government bailout:

The [Australian] Reserve Bank has been warned it may have to buy up coal mines and fossil-fuel power stations as part of extraordinary actions to save the economy from climate change-induced financial disaster.

As Australian business leaders grow increasingly worried climate change will hit their bottom lines and the International Monetary Fund warns global warming is now a major financial risk, a new warning issued by the world's top central bank says the RBA could be forced into rescuing the economy and the environment.

But pretty obviously, buying toxic fossil fuel assets does neither. Instead, all it does is socialise the losses - while leaving the people who have profited from this environmental devastation laughing all the way to the bank.

The risk of a fossil-fuel-triggered economic collapse is real, because bankers have kept on throwing money at this industry, despite decades of reports saying it has no future. And they're still doing it. If we want to mitigate the risk, the most obvious step would be to require banks to reduce their exposure to this toxic industry, so that its inevitable demise won't harm the rest of us. The fact that central bankers and international financial institutions are recommending a bailout rather than that tells us that they are not interested in solving the problem, but as usual seeking ways for the rich to profit off it.