President Biden has announced Jerome Powell for a second term as Chair of the Federal Reserve. And that’s bad news for the climate. The Federal Reserve is the US’s central bank. So they set the rules for how money works and flows through the economy. During Powell’s his first term, as wildfires, hurricanes, droughts and floods raged across the States, he sat on his hands and allowed business as usual to continue. It’s likely he’ll do the same in his second term, which is what makes his appointment so enraging.
It’s especially frustrating given Joe Biden’s big words at COP26 – where he boasted about green policies and American leadership against climate change.
There is a glimmer of good news. The appointment for vice-chair is Lael Brainard. She understands that climate is a massive risk to the US economy, and that the Federal Reserve can, and should, act. She will definitely use her power to push forward a climate progressive policy. But without her driving the ship, she doesn’t get the final say. It’s a perfect example of Biden trying to look politically balanced, but risking everything in the process.
David Arkush, managing director of Public Citizen’s Climate Program, said that Powell’s re-nomination “doubles down on reckless Wall Street deregulation and dangerous dawdling on climate-related threats to the financial system, flouting Biden’s own whole-of-government approach to stemming climate threats”.
At the time of writing, there are still three important roles to fill at the Fed. And for all three positions, there are strong, climate focused candidates available. Joe Biden must act now to put them into office and make it the most climate progressive Federal Reserve in history. How many more wildfires and disasters will it take?