![]() Given the size and scope of government intervention, we should be maximizing the public’s return on our investment. And finally, it undermines urgent efforts to counter surging carbon dioxide and methane emissions, which are bringing us closer to the catastrophe of an unlivably hot planet. It also forestalls the inevitable decline of an industry that can no longer sustain itself. It increases the likelihood that investors will be stuck with stranded oil and gas assets that society no longer needs. The decision to bring oil and gas into the Fed’s investment portfolio not only misdirects limited recovery resources but also sends a false price signal to investors about where capital needs to be allocated. Moreover, the Fed-subsidized loans come with no strings attached regarding the retention of jobs, C.E.O. Buying this bad debt is not likely to support the creation of jobs or even ensure that existing jobs survive. Almost 83 percent of the industry’s debt is now eligible for cheap refinancing by the Fed.įor taxpayers, shouldering these liabilities is a bad deal. Oil and gas companies now hold $744 billion in bonds and debt, much of it below investment grade or close to it. Many fossil fuel companies spent the past decade recklessly expanding production even as they failed to turn a profit. Parts of the industry are awash in hundreds of billions in risky debt. The Fed is ignoring clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment. These concessions to the fossil fuel industry are a risky investment in the past. Among those eligible for government assistance are many fossil fuel companies that were in deep financial trouble long before the pandemic began. Their allies in Congress and the administration have lobbied for changes to several of the Fed’s lending programs, including relaxing the Main Street Lending Program. Oil, gas and coal companies are set or are seeking to receive billions in federal aid - including at least $3.9 billion from the Paycheck Protection Program and at least $1.9 billion in tax credits tucked into the CARES Act passed by Congress. The Fed is singularly poised to seed strategic investments in future economic stability. That’s why it is imperative that we make investments now that will increase the resilience of our economy. Ignoring it, particularly to the benefit of fossil fuel interests, is a risk we can’t afford.įrom my time as a Federal Reserve governor and then deputy Treasury secretary, I’ve learned that times like this not only can determine our ability to recover from a crisis but can also help inoculate us against the next one. Climate change poses the next big threat. ![]() The coronavirus pandemic has laid bare just how vulnerable the United States is to sudden, catastrophic shocks. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |