Bill McKibben has a New Yorker article out where he describes how banks could hasten the transition to decarbonization by increasingly refusing to lend to the fossil fuel industry:
So what would happen if, tomorrow, Chase announced that it was going to phase out lending to the fossil-fuel industryâ€”probably first by restricting loans for particular projects, and then by ending general corporate lending and banning the underwriting of new debt and equity for fossil-fuel companies? â€œWells Fargo and Citi would follow within days,â€ according to Tim Buckley, a former managing director at Citi, who now serves as the director of energy-finance studies for Australasia at the Institute for Energy Economics and Financial Analysis (I.E.E.F.A.), a Cleveland-based nonprofit research group. In fact, â€œtheyâ€™d look to go one step further, so as to pretend they werenâ€™t really sheep. And this would have global ramificationsâ€”the music would stop, very suddenly.â€ Wall Street, Buckley said, â€œcan be very deaf to warnings for years, but the financial-market lemmings will suddenly act in unisonâ€ once the biggest players send a signal. Everyone knows that the fossil-fuel era will come to an end sooner or later; a giant bank pulling back would send an unmistakable signal that it will be sooner. The biggest oil companies might still be able to self-finance their continuing operations, but â€œthe pure-play frackers will find finance impossible,â€ Buckley said. â€œCoal-dependent rail carriers and port owners and coal-mine contracting firms will all be hit.â€
A few of the big European banks have begun taking steps away from fossil fuels already. In June, the French giant CrÃ©dit Agricole announced a change that Disterhoft calls the â€œgold standard to dateâ€: the bank said that it would no longer do business with companies that are expanding their coal operations, and that, by 2021, its coal-business clients in the developed world would have to produce a plan for getting out of the business by 2030; its clients in China by 2040; and its clients everywhere else by 2050. BankTrack, an N.G.O. headquartered in the Netherlands, called the announcement a â€œwelcome first step,â€ and, indeed, the restrictions have clearly begun to bite. In late June, an Indonesian power-company executive said, â€œEuropean banks have said they donâ€™t want to finance coal projects for a while. Japanese followed and now Singapore. About eighty-five per cent of the market now donâ€™t want to finance coal-power plants.â€ He added, â€œCoal-power-plant financing is very challenging.â€ According to the I.E.E.F.A.â€™s Buckley, CrÃ©dit Agricoleâ€™s move helps explain why, for instance, Vietnam, which was supposed to be a key market for new coal-fired power plants, instead grew its â€œsolar base tenfold in the twelve months to June, 2019.â€ At this point, the coal business is already on its heels, so campaigners are increasingly focussed on gas and oil, but C.A.â€™s move shows that big, quick shifts are possible.
The prospect is appealing and seems to hold promise. It’s also interesting from the perspective of liberal versus anti-capitalist environmentalism. If the global banking industry provides substantial help in pushing the world economy off fossil fuels, what would that imply for analyses that hold capitalism itself to be the root cause of climate change?