Climate activists want a new president of the U.S. Central Bank-this is why | Business and Economic News

Just call it bankerpalooza, virtual version.

On Friday, as part of an economic policy seminar held by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, central bankers, treasury ministers, government officials, academics, and financial market participants will discuss the biggest economic problems facing the United States and the world . .

Due to concerns about the rapid spread of the Coronavirus Delta variants, this year’s party will actually be held.

But protesters who are eager to use this heavy economic policy event to shed light on the climate change issue have already acted personally.

Earlier this month, professional hikers and climate advocates associated with Climate Action 350.org climbed to the top of Teewinot Mountain in Grand Teton National Park in Wyoming and launched a “Stop Funding Pipeline” Banner.

A team of professional climbers and climate activists climbed the Teewinot Mountain in Grand Teton National Park, Wyoming, hung a big banner “Stop funding pipeline” and called for climate fiance action [Courtesy: Erich Roepke/350.org]

The organization is one of several environmental organizations that call on policymakers to use Jackson Hole as an opportunity to devote domestic and global economic policies to “turn to a modern clean energy economy to meet the needs of climate change.”

Here are the demands of climate activists from the Fed you need to know-and what they want to see happen to current Chairman Jerome Powell.

rewind. What is the relationship between the Fed and climate change?

a lot of. As the central bank of the United States, the Fed is responsible for overseeing the country’s financial system and therefore plays a role in pushing the United States toward a greener economy—or not.

Government and financial officials from other countries will also participate in the Jackson Hole seminar, and they have the right to do so.

What did the Fed think about climate change in the past?

In March, the Federal Reserve issued report It analyzes the financial stability risks caused by climate change. Last year, the Federal Reserve joined an international organization composed of central banks and regulatory agencies to “coordinate and manage the risks that climate change brings to the financial industry.”

These risks include backing banks that invest in mortgage loans in environmentally fragile areas, such as areas prone to flooding. Another risk is to provide loan support for oil and gas companies, if one day they cannot switch to renewable energy, these companies may go bankrupt.

Does everyone like the Fed to step in?

Do not. Like everything in the highly polarized political climate of the United States, partisan divisions abound on this issue.

Twelve Republican senators wrote to Powell Accusing organization “Beyond the scope of the Federal Reserve’s mission.”

Powell Resolve the strong opposition In an interview with the Economic Club of Washington, DC in April.

“The reason why we are concerned about climate change is that our job is to ensure that financial institutions, banks, and especially the largest banks, understand and can manage the major risks they take,” Powell said. “We can only see it through the lens of an existing mission.”

What about progressives?

They are not happy either.

The Federal Reserve received a D- rating Score card This was created by Positive Money, an advocacy organization that promotes a sustainable economy, aiming to rank the greenness of central bank policies in the G20 countries.

In terms of context, China received the highest score, still a mediocre C.

However, the United States, like most other countries, did get 10 out of 10 points from the organization in terms of “research and propaganda.” The organization stated that this “shows that actions do not match words.”

So what do climate activists want from the Jackson Hole gathering?

Activists from 64 organizations, including 350.org, wrote to Powell urging multiple policy changes.

First, they hope that the Fed will phase out investment in fossil fuels and adjust and regulate policies to include climate risks. These groups asked the United States to take this step before the COP26 summit in November, when leaders from all over the world will attend the UN Global Summit to discuss their plans to tackle climate change.

They also hope to raise awareness of how central banks contribute to the climate crisis and see them change any policy and regulatory practices that are incompatible with the 2015 Paris climate change agreement.

Climate activists also hope to put pressure on the Biden administration to appoint a “true climate leader” as the chairman of the Federal Reserve to replace Powell. The nomination is expected to take place around the Labor Day holiday in early September.

Will Powell be replaced?

Fed observers seem to think that Biden is unlikely to replace Powell, especially in a turbulent economy. He remains calm but is still recovering from the shock caused by the coronavirus pandemic.

Although other names, including current Fed governor Lael Brainard (Lael Brainard), are also widely known, Wall Street still supports Powell’s re-election.

Federal Governor Lyle Brainard may replace Fed Vice Chairman Randall Quarles [File: Andrew Harrer/Bloomberg]

The White House has not yet commented on whether it is considering replacing Powell. A gradual alternative may have a huge ripple effect not only on Wall Street but also throughout the world.

But even if Biden re-nominates Powell, climate activists may have a chance to gain progressive influence. That’s because the term of Fed Vice Chairman Randall Quarles will expire in October.

Fed observers believe that Biden will replace Quarles and predict that Brainard, who can prioritize climate change, may appear on the shortlist.

At the same time, 350 Silicon Valley member Mike Wittig said in a statement that although this year’s central bank summit is virtual, activists hope that leaders will stop and pay attention to the smoke caused by the recent wildfires on the west coast. . “We hope that their immediate and immediate evidence of climate change will prompt the Fed to take urgent action needed to address climate change.”