Climate change denyers have in recent months put forth a conspiracy theory that discussion surrounding climate change exists only to undermine the framework of “free-market” economies. Their efforts to continue delaying decisions in the sphere of government is being undermined by decisions from corporations to begin taking risks of global warming pollution into account when lending:
Banks, investment firms, corporations and utilities have begun to price out carbon emissions at $20 per ton. Bank of America, the nation’s second-largest bank, is the latest addition to this list. In a February speech, CEO Ken Lewis stated, “We need a stable and predictable regulatory environment with a bias toward clean energy and the green economy. When innovators and financial backers are confident of government support, risk calculations change and good things happen.”
To help realize that stable market, he announced the bank’s decision to price global warming pollution at $20 to $40 per ton in assessing risks for lending.
This announcement follows an earlier call to action by more than 60 leading investors, asset managers and companies with assets totaling $4 trillion. This group, which includes ALCOA, Sun Microsystems, and Dupont, called on the federal government to tackle global warming and included a call for pricing of global warming pollution.
Denyers arguments were incredibly weak to begin with, but these developments should clarify just how far into the fringe they really are. If the nation’s 2nd largest bank and groups with $4 trillion in assets are pricing in greenhouse gas emissions into risk analyses, it means they can’t seriously want to undermine their own economic foundations. Further, those investors and asset managers aren’t rabid environmentalists, a favorite boogeyman of the radical right.
So what would this mean in the real world? The cost of coal has jumped by 50% in the past seven years and additional coal plants are being considered for construction. Some math from the op-ed:
With an added charge of just $30 per ton, the mid-range of what banks and businesses are already planning for, the cost of power for Coloradans would skyrocket. As a typical coal plant generates 3.7 million tons of carbon dioxide per year, this charge would add $111 million per year to the operating cost of a single plant. Multiply that by the 50 years that a typical plant will run and those additional costs run into the billions.
With businesses on board, it is time to ignore the denyers and deal with reality in a responsible fashion. If denyers can see beyond their radical ideology, they’re welcome to join the discussion.