In my last post I mentioned the $700 billion of taxpayers money that the government is considering contributing to bailing out Wall Street. It’s a bad deal, no question about it. The proposal amounts to a blank check being written to the very institutions that have gotten us into this mess in the first place, with no transparency or accountability and the assumption of all their risky investments by us, the taxpayer. There are no conditions attached to the proposed bailout such as oh, I don’t know – the usual things that people who provide capital are entitled to like a share in ownership.
Meanwhile, as we taxpayers are all staring gloomily down the gullet of worthless mortgage backed securities, the banks will be taking their new-found solvency, their intact oversized pay packets and busily stoking the flames of another crisis: the climate crisis.
The credit crisis and the climate crisis share more than just a common term (though there is no question that both are crises of epic proportions). They are also both, at their root, the result of a failure to regulate and an outgrowth of unfettered risky investments.
Had there been a modicum of effective government oversight guiding the investment banking industry during the boom years, it would not have been able to expand exponentially on financial instruments as worthless as hot air simply to feed the coffers of overpaid bankers. Likewise, if there were strong government regulation limiting greenhouse gas emissions, banks would not have sunk billions and billions of dollars into coal, oil and gas.
Without any oversight, the financial sector has done what it does best – made money. And when it all comes crumbling down, whether it be the credit crisis OR the climate crisis – it is ordinary people who are impacted the most and homes lost, whether by a category five hurricane or a financial tsunami.
Coal plants and oil expansion are toxic investments for the climate, people and the planet, which should, by itself, make them risky no-go investments for bankers. But the absence of effective climate change regulation means the banks can continue to invest as irresponsibly as regards the climate system as they did with mortgages, putting short term personal greed ahead of the public trust and shifting the burdens to the taxpayer of the huge decommissioning and clean up costs for the carbon-intensive infrastructure they financed and profited from.
Renewable energy by contrast is dropping rapidly in cost. In fact, according to Scientific American with an investment of just $420 billion over the next 40 years, we could completely replace our existing energy infrastructure with renewable energy and energy efficiency.
That’s less money than the Bush administration is proposing that we spend in nine months on bailing out Wall Street from the credit crisis while the banks continue to throw good money after bad by continuing to invest in risky carbon intensive projects. And while you may be able to bail out failing banks (even if you shouldn’t), there is no bail out for a dead planet.