Your money is your carbon
If you've got $125k in the financial system, it's doing as much damage as your cooking and your heating and your flying. These are the most important new climate numbers for many years
Earlier today I published a big story in the New Yorker about how banks are driving the climate crisis. A report from a consortium of environmental groups made clear that for the biggest, richest companies on earth, the cash they keep in the banking system (which gets lent out for pipelines and the like) produces more carbon than their actual, you know, business. Google emits more carbon from its money than its phones, and Netflix from its streaming, and so on.
The importance of this new report simply cannot be overstated. These numbers are the most revealing set of data points since those that I wrote about a decade ago in Global Warming’s Terrifying New Math and which helped launch the worldwide divestment movement. It is the Rosetta Stone for understanding how finance and the climate crisis are inter-related; it takes a formerly somewhat abstract relationship and recasts it in hard numbers. Put simply, at the moment the easy supply of money from the banking system to Big Oil drives the ongoing climate crisis. Capitalism is straight-up behaving like a suicide machine. Understanding this gives us some chance to fight back—the data in this report will become the new basis for pushing Wall Street on global warming.
Yes, the report focuses on the tech industry, and that’s important because it could lead these companies (all committed to reducing their carbon emissions fast and hard) to actually join those of us who have been trying to pressure the banks to shut off the money spigot for big oil. Jamie Dimon might listen to Jeff Bezos.
But the basic calculation works for anyone or any institution that has money in the financial system—a university, a pension fund, a national government. Your money is your carbon.
And that includes each of us, if we we have some money. Like corporations, each of us generates a certain amount of carbon from the ways we live: cooking, heating, driving, maybe the occasional flight. And probably we’re working hard to eliminate these sources—buying an EV or a heat pump, turning down the thermostat. But if we’ve also been lucky and prudent enough to be able to save for our retirement, say, or for our kids’ college education, then that money is generating huge amounts of carbon as it sits in the bank underwriting loans to Big Oil; in this respect we are mini-Googles.
Though they didn’t address individual holdings in the report, the authors told me that the findings are relatively easy to translated. Bottom line: if you have $125k in the bank, it’s producing as much carbon as the average American in an average year. The median retirement account for someone in their 60s (i.e. me) is $400k—in that case its emissions are dwarfing your daily life.
I’m just going to say that again. If you’ve got money, that money is giving off huge amounts of carbon. If you’ve got a considerable sum, it’s producing more carbon than anything else you’re doing. It’s just sitting there in the bank spewing carbon. Depending on how much money you have, your bank account is two or three or four furnaces chugging all day; it’s a trio of Escalades idling forever in the drive, or six, or nine. Without knowing it you’re setting your money on fire, over and over and over, and that fire is filling the atmosphere with greenhouse gases. Nothing could be more important.
In one sense this is bad news. Except that
it’s relatively easy to fix, for you anyway. If you’re Apple, you can’t really just switch your accounts from Chase to one of the few fossil-free accounts, because you have too much money. But if you’re a normal person, you can: Beneficial State Bank on the West Coast, Amalgamated Bank on the East Coast, Aspiration Bank on the web—these are examples of institutions that can cut your carbon footprint dramatically over night
It gives you really good reason to join in the campaigning we’re doing at Third Act to demand these banks change. (You can pitch in whatever your age). In fact, don’t cut up your credit card or switch your account just yet—these banks are so big that we want to do it en masse at year’s end so they’ll actually notice.
Again—for my money (ha!) these are the most important numbers for understanding our climate predicament in many years. Don’t worry, I’ll be repeating myself on this regularly going forward!
Oh, and I’d be grateful as can be if you’d spread this around
Please subscribe to this newsletter, if you can afford it. (It will take a little of that carbon-spweing cash out of your bank account, and it will let me keep doing this)
Thank you Bill for writing this article. I just want to take issue with promoting Aspiration as an alternative. I used to bank with Aspiration, but became disillusioned -- there is an in-depth Propublica article about them I hope folks will read when considering where to move their money: https://www.propublica.org/article/the-celebrity-backed-green-fintech-company-that-isnt-as-green-as-it-seems. I ended up moving my money over to Atmos Financial (while keeping my credit union accounts as well -- it's totally OK to have an open relationship with your bank!). Atmos has amazing rates (unlike my credit union) and (unlike my credit union, or basically any other banking provider) invests 100% of my deposits into climate solutions. (Full disclosure: after banking with Atmos, I ended up working there, running their nonprofit donation platform.) Atmos customers are rewarded for donating to a long list of climate-focused nonprofits -- we need to get Third Act onto that list!
You should also mention Climate First Bank as a "good" alternative!