Why Has the Right Become Obsessed With Climate-Friendly Banking?

Why Has the Right Become Obsessed With Climate-Friendly Banking?

Why Has the Right Become Obsessed With Climate-Friendly Banking?

It’s not because they’re concerned about climate catastrophe.

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EDITOR’S NOTE: This article originally appeared at TomDispatch.com. To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com.

The demise of Silicon Valley Bank last month triggered plenty of angst among solar energy developers. Before it collapsed, SBV claimed it had “financed or helped finance 62 percent of community solar projects in America,” according to Washington Post business reporter Evan Halper. At first, it wasn’t clear who might fill that gap. MAGA politicians took great delight in the disruption of what they tediously referred to as the “woke” economy. Senator Josh Hawley (R-Mo.) typically tweeted this non sequitur: “So these SVB guys spend all their time funding woke garbage—‘climate change solutions’—rather than actual banking.” Meanwhile, Stephen Miller, the vampirish mastermind of Donald Trump’s 2017 Muslim travel ban, asked all too rhetorically how much time and money that bank had spent on what he called equity, diversity, and climate “scams.”

Why has the right become so obsessed with climate-friendly banking? Here’s a clue to answering that question: Just as MAGA-world was celebrating such an interruption in renewable-energy financing, red-state lawmakers were taking legal aim at private companies and local leaders considered insufficiently deferential to the fossil-fuel industry. In state after state, such politicians are now attempting to dictate the makeup of the American energy supply—sometimes putting a thumb on the scale, at other times stomping on it.

Dictating Climate Disruption

Despite the collapse of SVB, the solar industry appears in no danger of imploding. Plenty of other lenders are stepping in to compensate for the loss. But any banks riding to the rescue, or others that openly support non-fossil-fuel energy, had better brace themselves. Republican state politicians, wielding a lot more than mean tweets, are intent on waging all-out war against private companies that don’t cater to the oil, gas, and coal industries.

No surprise there. The right has long opposed any government action to curb climate change. Now, financial institutions and other private companies that, in their decision-making, consider not just profits but the environment, society, and governance (what’s now coming to be known as the “ESG” principles) risk finding themselves under ever heavier fire. The term ESG has been around for almost two decades, but the far-right assault on companies that adopt its precepts goes back only about three years.

This spring—a season in which old men’s thoughts turn to “woke-ism” and lots of state legislatures are in session—the crackdown on all things climate is only accelerating. MAGA legislators and treasurers are putting in place laws and regulations meant to prohibit state entities like pension funds from even considering climate issues when choosing where to make investments. Many are also planning to bar state agencies from doing business of any sort with private companies that refuse to deal with oil-, gas-, and coal-related enterprises.

When it comes to climate, it’s increasingly clear: The red-blue “national divorce” envisioned by Representative Marjorie Taylor Greene (R-Ga.) is already underway. In 15 of the 19 states that emit the most carbon per dollar of production (and, not coincidentally, are among the top oil, gas, and coal producers), Republicans have total control of both the statehouse and the governor’s mansion. Not surprisingly, it’s in those sooty states that legislative crackdowns on climate-conscious policies are proliferating. In contrast, at least 15 of the lowest-emitting states have passed, or at least considered, bills that aim to prohibit the investment of state funds in the fossil-fuel business.

In a March 11 post, the Harvard Law School Forum on Corporate Governance reported on recent anti-climate activity in states across America. Idaho and North Dakota now have laws that prohibit officials from taking climate into account when investing state funds. Legislators in Iowa and Oklahoma have similar bills in the works, while state treasurers and attorneys general in Arizona, Florida, Indiana, Kentucky, and Mississippi have issued policy statements or directives aimed at punishing any company that considers climate change while making investment or production decisions.

Even more popular have been bills aimed at punishing private companies that “boycott” or “discriminate” against what are considered “ESG-disfavored industries,” particularly those involved in fossil-fuel or firearm production. Kentucky, New Hampshire, North Dakota, Oklahoma, Tennessee, West Virginia, and Wyoming currently have such laws on the books. And just since 2023 began, lawmakers in at least nine states have introduced “boycott bills” that, according to the Harvard group, tend to be even “broader or more prescriptive than initiatives currently in force.”

Newly passed anti-environmental laws have been put into action right away. For instance, Riley Moore, West Virginia’s treasurer, took the drastic step of announcing that his state would no longer enter into contracts with Goldman Sachs, JPMorgan, Wells Fargo, or certain other major banks, because those companies have stopped dealing with the coal industry. When, on the heels of West Virginia’s ban, the Kentucky legislature passed its own boycott bill, Moore issued a press release congratulating his next-door neighbor, saying: “Kentucky joins our growing coalition of states that have taken concrete steps to push back against the woke capitalists who are trying to destroy our energy industries.”

Nor does it stop with banks. The Texas legislature is, for instance, gunning for insurance companies that refuse coverage to oil and gas companies. Republican state Senator Bryan Hughes assured the Dallas Morning News that “we’re pushing back hard” on any insurers that might consider withdrawing coverage from polluting industries. “If they’re gonna mess with money that belongs to Texas retirees and undermine the very Texas economy,” he added indignantly, “we’re gonna teach them some manners.”

Who Writes These Extreme Laws?

That so many states have been passing such legislation is anything but a fluke. Like other retrograde measures enacted in GOP-controlled states, those bills are based on “model legislation” drafted for legislators by an outfit called the American Legislative Exchange Council (ALEC). One of that group’s model bills, the Eliminate Economic Boycotts Act, is sweeping, if convoluted, in its language. It prohibits state governments from investing in or dealing with any private company that “penalizes” or “inflicts economic harm on” another company because it’s involved in fossil-fuel extraction, logging, mining, or agriculture.

When the ability of businesses (as well as governmental agencies) to pursue climate-mitigation policies is restricted, our individual and collective right to nonviolently protest against climate-busting fuels becomes that much more important. Alas, that avenue to climate protection is also being barricaded. Since 2020, such street demonstrations have increasingly been met with right-wing and police violence, while protest directed specifically at fossil fuels is being outlawed outright. Last year, at Mother Jones magazine, Nina Lakhani reported, for instance, that ALEC was behind legislation in 24 states that criminalized grassroots protests against fossil-fuel infrastructure. By now, anti-protest legislation, most often zeroing in on climate activists and Indigenous Peoples’ communities, has been introduced in a staggering 45 states.

Support for oil, gas, and coal is also being orchestrated by an association of state treasurers located, of course, in this country’s most carbon-heavy regions. The State Financial Officers Foundation, with headquarters in Shawnee, Kan., is, you won’t be surprised to learn, marshaling red-state financial officers and attorneys general to do regulatory battle against climate “wokeism.” Since 2021, it’s been urging state officials, according to New York Times climate desk reporter David Gelles, “to use their power to promote oil and gas interests and to stymie Mr. Biden’s climate agenda.”

That foundation, in turn, received financial support in 2021 not only from rabidly anti-climate groups like the Heartland Institute and the American Petroleum Institute, but also from some top financial services corporations, including Mastercard, Visa, Fidelity, and JPMorgan Chase. This raised CNBC’s eyebrows since those companies also “promote their own sustainability investment models” like ESG. Indeed, it’s widely expected that JPMorgan and some of the other big lenders that have been writing checks to those oily state financial officers will also be filling the solar-financing gap left by the demise of Silicon Valley Bank—diversifying their portfolios, so to speak.

Force-Feeding Fossil Fuelization, Community by Community

What about those states that find themselves on the other side of the national climate divorce, the ones rewarding ESG policies? Clearly, steering public funds away from the fossil-fuel industry is a much-needed approach in our world (and, by the way, the federal government could take another step in that direction right now by eliminating the $10 billion to $50 billion in tax subsidies it still grants the industry annually). Of course, to achieve a rapid phase-out of fossil fuels, far more would be needed. Market-based measures alone won’t bring about the precipitous decline in greenhouse-gas emissions that, in terms of extreme weather, the planet is screaming for ever more desperately. For that, urgent, direct action would be needed to suppress the extraction and use of coal, oil, and natural gas.

It goes without saying that coordinated nationwide action of that sort would be unimaginable in the American political universe of 2023. Even governors and legislatures determined to reduce carbon emissions can only achieve so much, given that their states exist in a national climate-policy vacuum and often share borders with ones in which increasingly authoritarian state legislatures are violating the local autonomy of communities and municipalities by force-feeding them fossil fuels.

For instance, Tennessee passed a law last year forbidding local governments from taxing or regulating any of the state’s energy infrastructure—with one qualification. The measure does not prohibit “a local action that affects facilities for the transmission, distribution, collection, conversion, and use of solar energy.” In the Volunteer State, you see, solar power is fair game for regulation and taxation, while fossil-fuel power is not.

As of last year, almost 20 states, all of them with legislatures under full Republican control, had laws on the books that forbid local governments from banning fossil-fuel gas connections in newly built homes. Even more intrusive is a Florida law that blocks local governments “from restricting fuel sources distributed and used by electric and gas utilities, power generators, pipeline operators, and propane dealers.”

As they snatch away the right of local communities to prevent not just pollution but the destruction of our world, such states are following a path that Texas blazed eight years ago. In 2015, local officials across the Lone Star State moved to ban the hazardous toxic-drilling method known as hydraulic fracturing, or “fracking.” In response, state legislators passed and Governor Greg Abbott signed a bill that forbids municipalities from regulating oil and gas operations.

Tom Giovanetti, president of a right-wing Dallas think tank, penned a commentary supporting such suppression of local governance. Apparently unaware that he was coming up with some pretty good satire, he wrote,

It’s absolutely true that the closer political power is to the people, the more responsive political power tends to be. But that can be a two-edged sword. Local governments are at least as capable as the feds of passing laws and ordinances that violate the presumption of liberty in the Constitution.… Tyranny isn’t OK just because it is approved by a majority of your fellow townsfolk.

Tyranny indeed! And don’t forget the “tyranny” of a world growing ever hotter and more extreme by the year.

They Keep Us Off Balance, in Fear

When MAGA legislators force their taxpayers to support the coal, oil, and natural gas industries, while undercutting the efforts of local governments to free their communities from fossil fuels, they’re not just empowering their fossil-fuelized campaign donors. Their anti-climate laws and regulations are also part of a broader effort to impose ever tighter right-wing political discipline on society. To that end, the authors of such laws—directly out of the authoritarian playbook—are intentionally vague about what constitutes “boycotting” or “discrimination.”

They don’t spell out, for example, what a fund manager can or cannot consider in deciding which companies to invest in. That kind of vagueness is woven into all sorts of anti-democratic bills and laws that have been bubbling up in state governments lately. It’s intended to keep those of us who care about this planet’s future and that of our children and grandchildren off balance, fearful, and less likely to do what’s needed to keep our world safe, sane, and functioning reasonably well.

Like a doctor who might delay aborting an ectopic pregnancy until it’s too late because his state’s anti-abortion law doesn’t specify how “near death” the mother must be before he can do so without going to prison, like the teacher who might censor her own lessons because she can’t be sure certain historical information won’t lead a student to feel ashamed of being white and falsely report her for teaching “critical race theory,” like the journalist who might shrink from covering a story about a MAGA politician for fear of being wrongly sued for defamation, it’s easy to imagine investment advisors who handle state pension funds or contractors who sell to state governments fearing not also doing business with oil and gas companies so they won’t be accused of “discrimination” or “boycotting” and lose their contracts.

It turns out that we don’t even have to imagine that last scenario; it’s already happening. As Gelles of the Times recently reported, “There are some indications that the conservative pushback [against climate-friendly investing] is gaining traction. Vanguard, one of the world’s largest investment firms, recently withdrew from the Net Zero Asset Managers initiative, an effort intended to get institutional money managers engaged in the fight against climate change.”

This is bad news. At the very moment when the world’s most knowledgeable scientists are warning that an all-too-literal hell lies in store for us, tinpot legislators in MAGA states are preparing to enforce the dominance of a deeply fossil-fuelized version of capitalism. If so, the repercussions won’t stay confined within any state’s borders. All 50 states will be affected. That means, in turn, that communities are going to have to fight ever harder for the right of all of us to a livable future. Meanwhile, purple- and blue-state legislatures need to pass tougher laws that can help undermine the fossil-fuel industry. And the rest of us will have to focus big time on how best to flush coal, oil, and natural gas out of the economy for good before it’s too late.

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