The world needs to reach net-zero emissions in the physical world by 2050. You of all people know that financing leads real world impacts by decades. The old Line 3 Pipeline was built in the 1960s, started operating in 1968 (52 years ago) and is still pumping oil today. The Line 3 expansion project — which you are funding — will INCREASE the flow of tar sands oil through Indigenous territories in Minnesota. If pipelines last 50+ years, that means a project you are funding today will still be pumping oil in 2070. What about the projects you make loans for now? Or projects that receive new loans in 2030?
BOTTOM LINE: The projects you financed 30 years ago are causing emissions now and the projects you finance now will still be operational long after 2050. Even the IEA, a conservative and well-respected energy industry institution, says that in order to reach net-zero in 2050 there should be no new fossil fuel projects after 2021 — which is, *checks notes*, right now.
In the IPCC SR15, scientists said that our only hope of achieving a stable climate is abrupt and disruptive change. It might seem ‘reasonable’ to balance climate goals and economic goals, but physics doesn’t care. Banks don’t get to pretend to be voice of reason after spending DECADES resisting the kind of moderate incremental change that could actually have worked if we started in the 1990s. Abrupt and disruptive change is the sole answer because the banks missed every opportunity to do things in a slow and methodical way. In case you think the banks didn’t know they needed to act earlier, here’s a picture of a huge climate protests passing within a block of BMO’s Toronto headquarters in 1990. Two years before Bill Clinton was elected.
The IEA says that to reach net-zero by 2050, we need to stop building new fossil fuel projects in 2022. It’s that simple. Any company that is serious about transitioning shouldn’t be developing new mines or expanding infrastructure for fossil fuel distribution. Banks could easily say they won’t make new loans to any company that is still planning to expanding production and distribution of fossil fuels in 2022. That would keep those companies stable while actually driving the rapid transition we need.
Canada didn’t have a housing collapse in 2008 because our mortgage and lending markets are more tightly regulated. The Cleveland Fed says there was no subprime mortgage boom in Canada because: “bank capital regulation in Canada treats off-balance sheet vehicles more strictly than the U.S., and the stricter treatment reduces the incentive for Canadian banks to move mortgage loans to off-balance sheet vehicles. Finally, as noted above, the fact that the government-mandated mortgage insurance for high LTV loans issued by Canadian banks effectively made it impossible for banks to offer certain subprime products.” Unfortunately, instead of regulating the carbon bubble in a similarly sensible way, the Canadian government is fueling it with BILLIONS in fossil fuel subsidies. Without regulation, Canadian Banks are just as reckless as American banks.
Nota Bender: We are aware that Bender is only four years old when the show begins, but there was a considerable gap between the moment his factory was originally financed and the moment he was first activated.