The finance industry is issuing some of the direst warnings about climate change while funding the industry most responsible for it. Today’s example: JP Morgan.
The bank is the single biggest funder of fossil fuels in the world. But its economists wrote an internal report leaked to Extinction Rebellion on Friday stating that they “cannot rule out catastrophic outcomes where human life as we know it is threatened.” Please enjoy that thought as you slide into your weekend.
The report draws on the wealth of literature that’s already been published. So in a sense, the science inside isn’t so shocking as the messenger and their takeaways based on the science. The analysis is most worried about the tail risks of climate change. In plain language, that’s the less likely but utterly catastrophic outcomes of the climate crisis that keeps economists and scientists up at night.
We’re talking things like the sudden collapse of the West Antarctic Ice Sheet, sending sea levels more than 10 feet higher and displacing millions of people. Or a feedback loop where melting permafrost releases more carbon dioxide that causes more warming that causing more thawing and carbon emissions. These things are already happening but at a rate, we can somewhat handle. What’s worrisome is that we could cross a tipping point where they happen suddenly and humanity is left having to deal with a new, unsteady state.
“Although precise predictions are not possible, it is clear that the earth is on an unsustainable trajectory,” the JP Morgan analysts wrote. “Something will have to change at some point if the human race is going to survive.”
In a logical world, this would be enough to convince world leaders to act. The report calls for a global price on carbon as the single, most effective climate policy the world could pursue. Instead, governments are basically engaged in a game of chicken with the climate as they approve more fossil fuel development that will almost surely screw future generations. Though the report doesn’t mention JP Morgan or other banks and industries (cough, cough tech), they’re also to blame in enabling the crisis. With nationalism on the rise and Donald Trump scuttling climate ambitions and ruling a U.S. in the grips of climate denial, the odds of meaningful change and cooperation are not on the world’s side.
“Changes are occurring at the micro level, involving shifts in behaviour by individuals, companies and investors,” the report notes before that it “will push emissions in the right direction,” but not enough without the weight of government to really turn the ship around.
This type of response is in line with a scenario scientists schemed out where the world fails to cooperate and dissolves into a more fractured, less well-off state. That this is coming from the single largest funder of fossil fuels feels like McDonald’s suggesting you should eat healthier. A spokesperson for the financial giant told the BBC the researchers behind the report were “wholly independent from the company as a whole, and not a commentary on it,” which is pretty rich. But this is the exact type of analysis that JP Morgan and other big fossil fuel investors need to hear.
Activists have been putting outside pressure on JP Morgan and other banks to stop bankrolling the destruction of the biosphere. The report even notes public pressure has “changed rapidly,” and there’s been some success. But to really change the course of the world, some success isn’t enough.
It doesn’t mean everyone should throw up their hands and give into living in a completely degraded future. But at least the stakes are clear.