A Difficult Couple of Days in NYC, But Still No Urgency to Invest in Wind and Solar

A Difficult Couple of Days in NYC, But Still No Urgency to Invest in Wind and Solar

It has been a difficult few days in New York as the air quality has been the worst in the world for most of the last 48 hours due to the wildfires in Quebec.

The City of course has seen tougher days, much tougher. It has also experienced climate-induced disasters before, including Superstorm Sandy in 2012 and catastrophic flooding that killed 14 across the City and left much of Central Park underwater less than 2 years ago.

Unfortunately, this event, like the last two, is not likely be the wake up call that will drive the world’s financial capital to close down its investments in fossil fuels and commit to a transition to wind and solar.

We want to believe that action will be taken in NY and DC to make the necessary investments in wind and solar so that mankind will finally act (already very late), but this is unlikely to do it. I find myself asking whether anything will change until it hits the pocketbooks of the wealthiest banking leaders. A flooding even on Dune Road in the Hamptons is more likely to result in action than a couple days of bad air quality.

I have said before that the four largest US banks – Chase, Citibank, Wells Fargo and Bank of America – need to perform stress tests in which they mark to zero the values of their fossil investments. The results of those test need to be balanced against real tests showing whether they – and the economy, writ large - can survive a massive disruptions to the functioning ecosystem. (https://www.bestcashcow.com/could-the-climate-crisis-lead-to-a-banking-crisis.html).

After accounting for the dramatic decline in the costs of wind (offshore wind and onshore wind), of photovoltaic cells and of lithium production – much of which we have seen in just the last year – it is clearer now that the transition is not just necessary, but cost-effective for those willing to fund it. A 2022 Stanford University study outlines the reality that a transition to wind, water and solar will cost $62 trillion globally, but will have a payback period of 6 years with $11 trillion in direct and indirect benefits annually. If not the current roster of major banks, then some other institutions needs to form or be former to make this investment and reap this reward.

Meanwhile, New Yorkers continue to suffer through lightheadedness from the smell of burning maple and just hope for an end to this.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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