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Several progressive House Democrats introduced this week a bill seeking to mandate the Fed to ban banks from funding all fossil fuel projects after 2030, and require the systemically important large banks to align emissions financing with U.S obligations under the Paris Climate Agreement.
Congressman Mondaire Jones (D-NY), Congresswoman Ayanna Pressley (D-MA), and Congresswoman Rashida Tlaib (D-MI) introduced the so-called Fossil Free Finance Act, which would require the Federal Reserve to mandate that all bank holding companies with more than $50 billion in assets and all nonbank Systemically Important Financial Institutions (SIFIs) align their financing of greenhouse gas emissions and deforestation risk commodities with science-based emissions targets.
The bill requires the Fed to mandate large banks to commit to 50 percent reduction in financed emissions by 2030 and 100-percent reduction in financed emissions by 2050. The Fed mandate, as per the bill, would also ban the financing of all fossil fuel projects after 2030 and prohibit thermal coal financing after 2024.
“For too long, our federal government has looked the other way while our nation’s largest banks bankroll the dirtiest fossil fuel projects, exacerbating the climate crisis and setting us up for a massive, climate-induced economic collapse. That must change,” said Rep. Pressley.
Environmental and citizen organizations welcomed the introduction of the bill.
“The Fossil Free Finance Act sends a powerful message that Congress won’t accept the Federal Reserve’s failure to do its job,” said Yevgeny Shrago, policy counsel with Public Citizen’s climate program.
The bill, however, has very little chance of becoming law, The Hill notes.
The current term of Fed chairman Jerome Powell, a Republican, expires next February, and there has been pressure from the most progressive Democrats that President Joe Biden do not nominate Powell for another term.
According to The Hill, several House Democrats, including Rep. Pressley, have been demanding from President Joe Biden to replace Powell with a liberal who would incorporate climate change issues and concerns in the regulations of the banks.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com