Shrewd action to address current economic crisis may help prevent a future economic crisis caused by climate change

Washington, D.C. – As Congress considers a massive bailout for industries affected by the coronavirus outbreak, U.S. Senators Sheldon Whitehouse (D-RI), Martin Heinrich (D-NM), Ed Markey (D-MA), Jeff Merkley (D-OR), Richard Blumenthal (D-CT), Debbie Stabenow (D-MI), Tina Smith (D-MN), and Cory Booker (D-NJ) today called on congressional leaders to ensure any financial assistance for major airlines and foreign-flagged cruise lines includes reasonable environmental requirements to address pollution from these industries.  Taking action to address the world’s carbon footprint while shoring up the American economy during the current crisis would help prevent a future economic collapse that may be triggered by climate change if we don’t act soon.

“Given the large carbon footprint of commercial aviation, requiring reductions in carbon emissions would represent a major step in curbing our nation’s greenhouse gas emissions.  Requiring reductions in carbon pollution from foreign-flagged cruise ships, as well as reductions in other air pollutants and increased penalties for illegal dumping, would result in cleaner air and a healthier ocean,” the Senators wrote in a letter to congressional leaders.  “Business leaders are themselves increasingly recognizing that their companies must make positive contributions to society or risk losing their social license.  This is particularly true when companies ask American taxpayers for financial assistance.”

Senate Democrats’ Special Committee on the Climate Crisis held a hearing just last week in which a panel of financial experts testified to the enormous risks climate change poses to the economy.

The world’s foremost economists and financial institutions are sounding increasingly forceful warnings about the link between climate inaction and financial instability.  In January, the CEO of Blackrock—the largest asset manager in the world—warned in an open letter to CEOs that “[c]limate change has become a defining factor in companies’ long-term prospects,” and as a result “we are on the edge of a fundamental reshaping of finance,” one that is “compelling investors to reassess core assumptions about modern finance.”  Also in January, the Bank for International Settlements – known as the central bank of central banks – issued a report warning that “[c]limate change could … be the cause of the next systemic financial crisis.”  

Full text of the letter is available below.

 

 

March 18, 2020

 

The Honorable Nancy Pelosi                                      The Honorable Mitch McConnell

Speaker                                                                       Majority Leader

United States House of Representatives                    United States Senate

Washington, DC 20510                                              Washington, DC 20510

 

The Honorable Charles Schumer                               The Honorable Kevin McCarthy

Minority Leader                                                          Minority Leader

United States Senate                                                   United States House of Representatives

Washington, DC 20510                                              Washington, DC 20510

 

 

Dear Speaker Pelosi, Leader McConnell, Leader Schumer, and Leader McCarthy:

 

A number of industries have stated that they intend to seek financial assistance from Congress for losses related to the ongoing coronavirus pandemic.  For example, U.S. airlines announced that they are seeking $50 billion in financial assistance, or three times the size of the aid package they received after the September 11 attacks.[1]  President Trump has signaled that he intends to help other industries as well, including the cruise line industry.[2]

 

Given the poor environmental records of some companies in these industries, we believe that any such financial assistance should be paired with requirements that companies act in a more responsible fashion.  Air travel currently accounts for approximately 2.5 percent of total carbon dioxide emissions globally, and commercial aviation emissions are expected to triple by 2050.[3]  The foreign-flagged cruise industry has a checkered environmental record and most passenger liners burn heavy fuel oil, one of the dirtiest fuels.[4] 

 

Given the large carbon footprint of commercial aviation, requiring reductions in carbon emissions would represent a major step in curbing our nation’s greenhouse gas emissions.  Requiring reductions in carbon pollution from foreign-flagged cruise ships, as well as reductions in other air pollutants and increased penalties for illegal dumping, would result in cleaner air and a healthier ocean.

 

Business leaders are themselves increasingly recognizing that their companies must make positive contributions to society or risk losing their social license.[5]  This is particularly true when companies ask American taxpayers for financial assistance.

 

If we give the airline and cruise industries assistance without requiring them to be better environmental stewards, we would miss a major opportunity to combat climate change and ocean dumping.  At a recent hearing of the Senate Democrats’ Special Committee on the Climate Crisis, several financial experts testified about the severe risks climate change poses to our economy.  In light of this, efforts to address carbon pollution make good financial and economic sense.

 

Thank you for your consideration of this request, and we stand ready to assist you. 

 

Sincerely,

 

SHELDON WHITEHOUSE                                                  MARTIN HEINRICH

United States Senate                                                               United States Senate

 

 

JEFFREY A. MERKLEY                                                       CORY BOOKER

United States Senate                                                               United States Senate

 

 

EDWARD J. MARKEY                                                         RICHARD BLUMENTHAL

United States Senate                                                               United States Senate

 

 

TINA SMITH                                                                         DEBBIE STABENOW

United States Senate                                                               United States Senate