As President Obama heads to the Arctic to discuss climate change, just mere weeks after approving Shell Oil’s bid to drill for oil in the treacherous Chukchi Sea, a very different group is sounding the alarm over the dangers of a warming climate. That group, surprisingly, is Wall Street bankers.

Citibank has released a new report showing that taking action now against the growing threat of climate change would save an astonishing $1.8 trillion by the year 2040. Conversely, the report says that if no action is taken, the economy will lose as much as $44 trillion during that same time period.

As Think Progress points out, the Citibank report takes into account the potential lost revenue from leaving resources in the ground — including 80% of coal reserves, half of the world’s gas reserves, and a third of global oil reserves — and still concludes that the global economy would see a net gain.

This report offers a very stark contrast to the typical talking point that we hear as to why we can’t take action on climate change — that action would simply cost too much. 

But this is not the first time that financial leaders have warned about the financial dangers of climate change.

Earlier this summer, a group of current and former Wall Street executives and former U.S. Treasury Secretaries warned that a 2 degrees Celsius increase in global temperatures could result in property losses in the state of Florida totaling $23 billion by the middle of this century. On top of the economic losses from property being underwater, the Southeast would also begin to see an alarming rise in yearly deaths due to extreme heat, with some estimates putting the yearly death toll as high as 35,000 people a year.  Agricultural losses could be as high as 20% of current yield.

If Wall Street understands the threat of climate change, even if only in terms of dollars, then this begs the question as to why they continue to fund climate change denying politicians.

Since 2014, Wall Street banks, real estate firms, and insurance companies — all industries that have expressed enormous concern over the financial threat of climate change — have poured an astonishing $507 million into political campaigns and lobbying activities.  62% of this money went to Republicans.

The reason that Party split is significant is because we have more climate change-denying members of the House and Senate then at any other point in time, and nearly every single one of them are members of the Republican Party.  According to an analysis by Think Progress, 53% of Republicans in the U.S. House of Representatives deny that climate change is real, and 70% of Republicans in the Senate refuse to admit that climate change is real.

If they want to be taken seriously, and if they want their financial concerns addressed by politicians, then Wall Street bankers need to immediately stop the flow of corporate campaign cash that is going to climate change deniers. As long as those people hold seats of power in Washington, D.C., then we will continue to see action stalled year after year.

Image source – Huffington Post UK.

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After years of economic crisis and the rise of social movements like Occupy Wall Street, the idea that there is something rotten in the financial sector has become commonplace. Banks that were too big to fail before the bailouts are bigger than ever, and investment in oilsands expansion, fracking, arctic oil exploration and deep-sea drilling continues at an alarming pace.

Financial activist Brett Scott describes the situation succinctly: “The financial sector right now is crap at social justice and crap at ecological sustainability.” But Scott believes there’s another crucial point that often gets overlooked in critiques of the financial system.

"Even if the financial sector was socially just and sustainable, there is still the sense that we actually have no democratic access to it," says Scott. "Politicians always seem fixated about how to make the sector into a more benign dictatorship, rather than focusing on how to increase people's sense of personal participation in it."

Reducing the sense of personal alienation that people feel in relation to the financial system was one of the goals that motivated Scott to write The Heretic’s Guide to Global Finance, published last year by Pluto Press. The book explains the basic functioning of financial markets in language that’s easy to understand, and provides ideas to contest the power of big money in determining the shape of our collective future. Since the continued growth of the fossil fuel industry relies heavily on investment from major financial institutions, Scott’s work provides a much-needed critical counterpoint to the system.   

Compared to the popular portrayals of stockbroker decadence in films like The Wolf of Wall Street, Scott’s book doesn’t rely on a story of bad behavior to explain why the financial system produces such spectacularly negative effects. Speaking as someone who has worked in the financial sector, Scott insists that most traders bear little resemblance to exaggerated cinematic villains like Gordon Gekko. When it comes to character or moral bearing, “there’s nothing fundamentally different between the people in the financial sector and those in the rest of the world,” Scott says.

For Scott, both moral judgment and technical discussions about how the financial system could be better regulated are less important than figuring out how to make finance more democratic.

“I’m not actually that interested in the big battles over the regulatory stuff, or how good or evil some particular CEO is,” he says. “I’m more interested in the power dynamic between the person on the ground and the financial sector.”

It was the unequal power dynamic between financial insiders and outsiders that motivated Scott to find out firsthand what makes the world of finance tick. Hailing from a background in activism and NGO work in South Africa, Scott had grown frustrated with the fact that he was fluent in macro-level critiques of the financial system, but still didn’t really understand the details of how money gets invested in concrete projects like mines and oil and gas operations.

Intent on figuring out the game from the inside, Scott moved to London in 2008 to join a start-up derivatives brokerage firm, where he spent two years learning the ropes of high finance. While he was on the phone persuading clients to buy derivatives, Scott was also doing a kind of activist research, learning how different financial products work and studying the relationships between financial professionals.

One of the key take-home points from his anthropological foray inside the financial sector is that investment decisions are not just about business, but are always inherently political. “One thing I always try to get across to activists is that fund managers are making political decisions with their money,” says Scott. “You’re deploying resources that you could deploy somewhere else, in a way that benefits some people and not others, and that’s incredibly political.”

Decisions about where to invest are ultimately decisions about what kind of a world we want to live in. If the financial system functioned under democratic oversight, putting money into projects like building desperately needed renewable energy infrastructure would be a no-brainer.

But as it stands, investment decisions are made by a small moneyed aristocracy of bankers and their corporate and political allies—which is why money continues to flow into profitable but destructive dirty energy.  

As Scott sees it, the undemocratic power concentrated in the financial sector is reinforced through the vocabulary of economic rationality that shapes our everyday lives. “The pseudo-scientific language of the financial sector is one way that people distance themselves from thinking about the underlying exploitation,” Scott explains.

We’ve become so accustomed to hearing endless reports about economic growth, yield spreads and returns on equity that it’s easy to lose sight of the human and ecological reality underneath the jargon.

A useful strategy for waking ourselves up to the social relationships that actually constitute economic activity is to denaturalize the language we use. Instead of talking about money, Scott refers to “COGAS”: claims on goods and services. It’s a simple linguistic move, but one that can help to break the spell of finance and get us thinking about the fact that money is ultimately just a socially-constructed medium of exchange, not some magic totem with unquestionable power over our lives.

Scott views strategies such as the oilsands divestment campaign in much the same way. Rather than use divestment as a tool to actually starve companies working in oil and gas extraction of operating funds, Scott sees the campaign as a means of changing the cultural consensus around fossil fuels.

“That to me is a really key thing about divestment, is how do you start to make it increasingly socially unacceptable to assume that it’s normal to invest in destructive projects. I don’t think the divestment projects in themselves are going to stop it, but they challenge the notion that something is normal,” he says.

Both in his book and on his blog Suit Possom, Scott’s writing is full of ideas for how to challenge the daunting authority of the financial sector, and experiments that could help to create better systems of sharing, exchange and investment that can go beyond the logic of profit. Somewhere between radical activist and entrepreneur, Scott is informed by what he describes as a “hacker ethos.”

“A hacker approach involves exploring a system and developing an acute sense of how you’re connected into it,” Scott says. Whether you’re into cryptocurrencies like BitCoin or disruptive forms of shareholder activism, The Heretic’s Guide to Global Finance offers some solid tools for taking control of the financial system.

You can find more of Brett Scott’s writings on financial activism and alternative economics on his blog, including plans for a London School of Financial Activism, due to launch this year.

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We are living in difficult times. The ongoing economic crisis started by the 2008 Sub-Prime Mortgage Scandal has all of us thinking about our future. We are vulnerable to unethical appeals to our anxiety in the form of quick fixes and easy profits. The promise of "Ethical Oil" is the worst of these appeals. We have to resist. Even more, we have to take decisive actions that the current leadership will not. To quote a famous man, we have an ordeal before us of the most grievous kind and we need a new generation of leadership to tackle it. We need the next Great Generation.

In 2008, world financial markets collapsed in dramatic fashion due to unethical investment practices, particularly in the previous five years. Toxic subprime mortgages had been injected like a virus into securities like Collateralized Debt Obligations (CDOs). Investment banks around the world were in on this scam and kept pushing it far beyond the point where it was obvious something had to give. Last year, the U.S. Financial Crisis Inquiry Commission concluded:

"the crisis was avoidable and was caused by: Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the tide of toxic mortgages; Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk; An explosive mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis; Key policy makers ill prepared for the crisis, lacking a full understanding of the financial system they oversaw; and systemic breaches in accountability and ethics at all levels.“

How could the crisis have been avoided? People entrusted with our collective futures were warned. In 2005, economic oracle and author of the bestseller Irrational Exuberance, Robert Shiller warned the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation about a housing bubble that might lead to a worldwide recession. His advice was ignored. Also in 2005, Greg Lippmann, the head CDO trader at Deutsche Bank, called the CDO market a ponzi scheme and bet $5 billion against the housing market. He did this with full knowledge of Deutsche Bank management. All the while, the very same bank continued to sell CDOs to investors.

These are only two examples of many key moments in which the financial crisis could have been mitigated if elected officials and their appointees had acted in a responsible manner. This would have meant acting in the interest of the majority of people.

Warnings came and went, but the cash cow freight train kept hurtling toward the inevitable outcome: outright failures of some of the oldest, most established banks in the world. The impact on average people was and continues to be devastating.

It is interesting to note, however, that those who benefited from the ongoing sale of unethical securities continued to reap huge bonuses even after the collapse, paid for by consumer tax dollars. That's right. Not only did the wealthy get even wealthier from unethical behavior, they continued to do so even after being caught out. The mass of us paid for this with our savings, with our taxes, with our jobs and with our security. They are wealthier, and we are all the poorer for it. 

Fast forward three years. In May 2011, with the support of less than 25 percent of eligible voters, and with the oil-producing communities as its base of organisational and financial strength, the Conservative Party of Canada succeeded in forming a majority government. 

Backed by the evangelical Right and the heavily foreign-owned tar sands industry, and against all warnings about climate change, the Harper government is enacting an aggressive pro-Tar Sands agenda. Ring any bells?

Add to this the fact that Canada's system of government puts extreme power in the hands of the Prime Minister of a majority government, and you have a recipe for four years of disastrous policy. Indeed, the first six months has seen Canada embarassed on the world stage numerous times for its contempt for anything resembling a global warming treaty. In addition, Canada has been actively sabotaging climate policies in other countries.

I grew up in Alberta and worked on the oil fields around Edmonton in the early eighties. Those were the now vanishing days of pumping sweet, light crude from the golden wheat fields of the prairies. Alberta is now known for exploiting the world's largest deposit of tar sands, and there's nothing pretty about it. The environmental record of this project is well documented.

Unfortunately, the damage to Alberta's North is not the most serious problem. The biggest threat comes from the idea that we can get away with burning the carbon sequestered in the tar sands. We can't.

This is well documented by unprecedented scientific collaboration around the world. It is a fact that if we burn the 230 billion tons of carbon locked in Alberta's tar sands it will spike global warming to catastrophic levels. The global climate will start to change more quickly than we can manage.

The social and political upheaval resultant of rapid warming would be far worse than previous wars, famines or environmental catastrophes. It would alter the course of humanity forever. Millions, perhaps billions will be negatively affected by the changes that we invited upon ourselves.

If what I have said sounds hyperbolic, that's because we all want to believe that it is. We want to maintain our bias toward a positive outcome. Rational people, when confronted with facts over and over, eventually come around to recognize the truth. Sometimes too late, but they eventually do.

In our time, unfortunately, there are those among us who are willing to take money to cover up or blur the facts – people who consciously choose to lie about the future and attack legitimate science for their own short term benefit, or for the industries they protect. 

It is unethical beyond comprehension to rob future humans of climate stability and security for the sake of more profits for today's elites. Unfortunately, as there was leading up to the subprime scandal in the USA, there is groupthink of an unprecedented level occurring in Canada right now. 

The political and economic elite will nod gravely at the idea the Canadian economy will collapse if we don't go ahead with the tar sands expansion, when the opposite is true.

Companies line up for a chance to extract the oil and ship it anywhere they can sell it.

Pipelines crossing thousands of miles of pristine wilderness are hard-sold to communities. 

Supertankers sailing in narrow channels of rich coastal fishing grounds are needed, say our leaders, in spite of the risks. 

Communities whose livelihoods depend on the oil industry return Conservative, pro-tar sands politicians to our national government in record levels of popular support.

Politicians talk about "Nation Building" when no such plans exist.

And, yes, PR professionals like those behind the Ethical Oil campaign continue to take money and benefits today while selling our children and grandchildren down the river.

Canada is being run like a colonial outpost and our Federal and Provincial governments facilitate rapid resource extraction at the highest profit.

Certainly there is plenty of money to be made, just as there was with the toxic securities that drove the 2008 collapse. The pear-shaped outcome of burning the tar sands will be similar. Elites will be safe and the masses of the population in general will pay dearly. Even the one percent will feel the impact but the difference for the poor will be the exponentially larger scale of the disaster.

The psychology is all too familiar. Groupthink helps us go into a mode where the anonymity of the crowd absolves us of sin: "Everyone else is doing it, I should get in on it. It's not me who makes the call. I'm just going along. I owe it to myself and my family to get the best return I can."

We do it on a national level as well. The USA, like a big brother, behaves badly on the world stage, and Canada, like a little brother, accused of misdeeds, says "if the USA doesn't have to behave, we don't either."

****

In this time I think a lot about my grandparents' generation. We just buried a 90 year old in my family who fought in the Second World War. He was a member of the "Greatest Generation" that suffered in the Great Depression and sacrificed millions of their lives to beat back Fascism.

Elites in their generation wanted to work with fascists. Initially, there was a policy of Appeasement.

It's not that different today. The stakes are the same, or higher. Elites pushing the Carbon agenda want to stay the course. Don't upset the apple cart. Like the Subprime scandal, we appear willing to go full tilt until the last drop. We seem willing to blind ourselves to the climate catastrophe by lapping up the nonsense of industry-funded fringe climate change deniers. Mass media continues to present their nonsense as morally, ethically and scientifically equal to the results of unprecedented global scientific collaboration. In the name of "Balance"? This is a tragedy.

If my grandparents' generation was the last great generation, who will be the next? Is it too late for the Boomers? Will it be my generation, Generation X? Will it be Generation Y? The Millenials?

Our descendants will identify two key generations: the last to turn a blind eye to climate change in the pursuit of one more dollar, and the first to say "enough" and make the difference.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.