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Progressives push Fed to divert funding from fossil fuel companies

More than two dozen House Democrats on Thursday called on the Federal Reserve to use its full arsenal of policy tools to divert funding from the fossil fuel industry and onto communities affected by climate change and pollution.

In a letter to Fed Chairman Jerome Powell on Thursday, 25 Democratic lawmakers called on the central bank to take more aggressive action to tackle climate change, including several actions the Fed has explicitly refused to take.

“Without concrete targets and without measurable changes to the Fed’s surveillance framework and monetary policy activities, we fear that progress will be both too slow and insufficient to adequately address the reality of the crisis facing us. our economy and our planet are facing, ”wrote Democrats, led by Representatives Mondaire Jones (NY) and Rashida TlaibRashida Harbi TlaibHouse Republicans present resolution to censor the gathering of progressives of “the squad” behind Omar while accusing his detractors of bias Omar: I did not equate terrorist organizations with democratic countries MORE (Michigan.).

The Fed has drawn political fire from Republicans for its first steps towards the exam the risks that climate change poses to financial stability and the economy. The bank has set up two panels to research and identify these dangers, and is considering ways to integrate climate risks into its supervision of US banks.

Republicans have warned the Fed against moving banks and lenders from fossil fuel production to green energy. But Powell and other Fed officials have unequivocally ruled out that direction.

“We are not here climate decision makers who can decide how the United States will tackle climate change. We are a regulator that regulates part of the economy, ”Powell told a House panel in February.

Some progressive Democrats, however, are pushing the Fed to do exactly what Republicans pressured the bank to avoid.

“Given the Fed’s financial stability goals and its oversight role over these institutions, we believe there is a clear need and capacity for the Fed to incentivize and enforce a reduction in fossil fuel financing. “the House Democrats wrote.

Lawmakers have asked Powell to “explore all possible authorities he can use” to “encourage and support banking investments aimed at limiting the rise in global temperature … with particular emphasis on lending to low-income communities and communities of color “hardest hit by pollution and climate change.”

Democrats also called on the Fed to incorporate climate risks into its banking stress testing regime – another step the Fed has all but ruled out for now – and to steer future emergency lending facilities towards tackling climate change and away from supporting fossil fuel companies.

“We echo the calls made by climate activists and concerned citizens for further action to be taken to protect our financial system, our economy and our planet from the devastating effects of climate change, ”they wrote.

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