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By Christopher Caldwell
Mr. Caldwell is a contributing Opinion writer and the author of “The Age of Entitlement: America Since the Sixties” and “Reflections on the Revolution in Europe: Immigration, Islam and the West.”
The big annual United Nations forum for debate on climate change ended this month in Glasgow in a way that left many attendees bewildered. Money men have taken the thing over.
COP26, as the event was called, was less like its predecessors and more like a second “Davos” — the January meeting of the World Economic Forum where the global economy’s moguls and regulators meet to map out our economic future. Dozens of private jets arrived for COP26, bringing investors and fossil-fuel lobbyists in embarrassing profusion. The finance writer Gillian Tett noted that between 2015 and today, the “tribe” of COP attendees had been transformed from one of “environment ministers, scientists and activists” to one of “business leaders, financiers and monetary officials.” That is bound to render the movement’s tactics and goals less democratic.
For environmentalists, COP26 ended in disarray, with the world’s two largest coal-burning countries, China and India, refusing to sign on to a phaseout of that dirtiest of fuels. For the finance industry, prospects were rosier. The new Glasgow Financial Alliance for Net Zero united 450 financial institutions around a “private-sector” plan to move the world to so-called net-zero carbon emissions. Bank of America, BlackRock, Goldman Sachs, Vanguard and Wells Fargo have signed on. Insurers (like Lloyds), ratings agencies (like Moody’s), pension funds (like the California Public Employees’ Retirement System) and financial-service providers (like Bloomberg) have also given their backing. They are ready to roll even if the COP activists are not.
The group is fronted by Mark Carney, a former Goldman Sachs executive and a former governor of both the Bank of Canada and the Bank of England, who is now the United Nations “special envoy” for climate and finance. About $130 trillion was said to be at the alliance’s disposal. That is serious money. It is more than the world generates in a year, and about six times the gross domestic product of the United States.
The alliance’s plan is vague. It involves “driving upward convergence around corporate and financial institution net-zero transition plans” and using financial “levers” to impose carbon-neutral rules on economic actors. The upshot: The alliance wouldn’t disburse the funds on climate “projects.” It would direct how those funds could be invested, favoring behaviors the finance industry deemed virtuous and freezing out those it deemed not. This would be an extraordinary concentration of political power in bankers’ hands — exactly the place where prudence might counsel us to fear power most.
“We can’t get to net zero by flipping a green switch,” Mr. Carney announced late last month. “We need to rewire our entire economies.” That is a euphemistic way of describing the sought-after “energy transition,” which would inevitably mean enormous expense, widespread disruption and a reassignment of many property claims. The question is whether financiers — as opposed to, say, scientists or voters — ought to be trusted to do the rewiring. The alliance seems to want to resolve that question before the wider public even realizes that it has been asked.
A case can be made that money managers have a certain legitimacy in leading any international effort to save the planet. It is the same legitimacy that such politically active celebrities as Charlize Theron and Bono and Sean Penn have. Their power isn’t democratic but it somehow feels like it is. You’ve “voted” for those stars by buying their products.
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