The Biden administration and several members of Congress are proposing legislation for a National Climate Bank to use federal tax dollars to subsidize and finance “green energy” projects with private sector.
The idea of a federal lending vehicle, whether it’s creating a bank or other financing incentive, is nothing new. In reality, a National Climate Bank is another in a long line of corporate welfare schemes that use taxpayer dollars to subsidize and protect wealthy investors and corporations – with this latest example to address climate change.
The purpose of setting up a government-financed bank or lending program is for taxpayers to assume most or all of the risk for loans and investments in dubious projects that would not be financed apart from the government’s involvement. From a private investor’s standpoint, say, a commercial bank, it’s a head-I-win, tails-you-lose proposition – the “you” in this case being the federal taxpayer-funded “climate bank,” while the bankers and investors risk nothing in pursuit of profit.
U.S. Sen. Edward Markey of Massachusetts, the lead sponsor of the original Green New Deal in the Senate, is leading the effort for a National Climate Bank that would start with $50 billion in federal taxpayer funds, and receive $10 billion more annually in the next five years.
This is the same Sen. Markey who two years ago predicted Florida would be underwater for much of the calendar year due to climate change within 15 years. To justify using billions more taxpayer money for his climate bank proposal, he accelerated his timetable.
“The climate crisis has fully arrived,” Sen. Markey said when he recently unveiled his National Climate Bank Act. Last I checked, the state of Florida remains above sea level. But, whatever.
Another purpose for this federal climate bank would be to assist states and localities to set up their own such banks to lend and subsidize still more “green” projects with the goal of minimizing and somehow eliminating fossil fuels. Currently there are 21 such “green banks” in operation, according to the American Green Bank Consortium.
Solar projects, wind energy and electric vehicles already are heavily subsidized by the federal government and states using tax credits, loan guarantees, credit enhancements and flat-out grants. Climate banks would do more of the same “green pork.”
More taxpayer giveaways and more corporate welfare also will lead to more failed Solyndra-type projects. Solyndra was the solar panel manufacturer that received more than $500 million in federal loan guarantees that went bust when the company declared bankruptcy in 2011. The private banks and investors that loaned money to Solyndra were just fine since they got reimbursed by the federal taxpayers who lost out, which was the point of the scheme.
The private sector, specifically, equity firms, large corporations and banks, are usually attacked in popular culture for being greedy and causing economic downturns; except, the federal government’s policies are usually lurking behind as the primary malefactor. The last two major economic downturns were entirely or largely federal government-induced: last year, when it forced economic lockdowns during the pandemic; and when it encouraged the real estate bubble through subsidized lending and artificially low interest rates that led to the Great Recession in 2008-09.
With politicians like President Biden and Sen. Markey invoking a climate “crisis,” history is bound to repeat itself with their urgency to juice the private economy to finance and build energy projects that otherwise would be economic white elephants and money losers.
There also is the question of efficacy. Will any of these projects cool the planet in the decades hence? Even if man-made carbon emissions are altering the planet’s average global temperature over time, notwithstanding their infinitesimal make-up of atmospheric gases, none of the trillions of dollars spent by the U.S. will compensate for growing oil consumption and coal production by Communist China alone.
Private companies on their own can choose to invest in “clean” energy, without government backing, as many are doing. “Sustainable” investment funds received $350 billion during 2020; corporations and governments have issued more than $1 trillion in “green” bonds since 2007; and JP Morgan Chase and Citigroup recently pledged to invest $3.5 trillion between them in renewable energy projects.
In sum, a national climate bank is pointless, until you consider another perennial motivation. Regardless whether Sen. Markey and his colleagues believe their overheated rhetoric on climate, politicians themselves always stand to gain financially from expanding corporate welfare schemes like a climate bank, which is why such policies are so pervasive. Investor and corporate interests invariably donate millions of dollars to politicians’ campaign accounts with the expectation of—or in gratitude for—receiving billions of dollars in government guarantees and “investment.”
More government deficit spending and corporate welfare schemes in the name of saving the planet will inevitably lead to politicians and the wealthy enriching themselves, while everyone else assumes higher energy costs and taxpayer risk, to say nothing of burgeoning inflation looming. As for the climate itself, it will go on changing, as it has since the beginning of time.
May 30, 2021