JPMorgan Chase, the biggest bank in the United States, announced it is abandoning the U.N. Net-Zero Banking Alliance on Tuesday, joining the nation’s other five largest banks in a major institutional shift that seems to have been encouraged by the reelection of President-elect Donald Trump.
Last week, Bank of America, Citigroup, and Morgan Stanley joined Goldman Sachs and Wells Fargo in announcing their exit from the NZBA, which was formed soon after President Joe Biden was sworn into office in 2021 to align “lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.” JPMorgan Chase joined them this week.
NZBA methods were as pernicious as its stated goals were delusionary.
A global conspiracy of more than 140 banks from 44 countries combined through the NZBA to enrich themselves by funneling capital into supposedly “clean” energy projects that would enable the global economy to produce zero carbon emissions by 2050. Their governments would help by funneling taxpayer subsidies into these energy projects.
In addition to goosing “clean” energy supply, the banks agreed to starve fossil fuel projects of capital needed for them to survive. Governments worldwide pledged to assist this throttling of fossil fuel energy by making its production more expensive.
For example, Biden’s Treasury Department issued nine “Principles for Net-Zero Financing & Investment” last year to help banks coordinate investment in clean energy projects while denying it to fossil fuel sources. At the same time, Biden’s dishonestly named Inflation Reduction Act funneled billions of dollars in subsidies to the same projects, and his Environmental Protection Agency issued regulations to drive fossil fuel power plants out of business.
These policies enriched bankers and politically connected investors but raised energy prices for everyone and killed jobs in carbon-emitting industries such as manufacturing.
The financial pain caused by the NZBA comes without any corresponding environmental benefits because a net-zero economy is an empty slogan rather than an attainable reality. In the three years NZBA existed, global carbon emissions rose rather than fell as anyone not wearing ideological blinders knew they would.
To maintain living standards in the U.S. with zero emissions by 2050, the country would have to install more than 1,000 wind turbines every day, or one nuclear power plant. The U.S. builds just 3,000 wind turbines a year.
Globally, 18% of total energy consumption comes from non-fossil fuel sources, marginally up from 14% a decade ago. But that rate of fossil fuel replacement would reach net zero in the year 2250, about 200 years after the stated goal. Unless Democrats want a total collapse of the global economy, which some of them seem indeed to desire, fossil fuels are here to stay.
Alternative fuels do not decrease fossil fuel use. They simply add to supply and increase overall energy use. This is not a bad thing, but it has nothing to do with reaching zero carbon emissions.
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The world’s climate is changing — it always has been — but it is not close to being our greatest challenge. China is building two new coal-fired electricity plants a week and 30 navy ships every year. President Xi Jinping is determined that China will supplant the U.S. as the leading power in the Pacific and then globally.
It is encouraging to see the new Trump administration right-size our energy priorities and even better to see the financial sector recognizing reality and acting accordingly.
This article was originally published at www.washingtonexaminer.com
