A few weeks ago, the chief executive of BlackRock, a $7 trillion investment fund, announced that they would make investment decisions with “environmental sustainability” as a core goal. This announcement follows on the heels of a letter, signed in December of last year by 631 investors representing $37 trillion dollars in assets, calling on governments to step up their efforts against climate change and commit to put their money behind their words.
Why are these fund managers, with their enormous financial clout, so outspoken about environmental issues?
From my experience working on Wall Street and Capitol Hill, it is not because they are “do-gooder environmentalists with a liberal agenda.” These announcements are driven by the significant investment risks — and opportunities — posed by environmental degradation. It is about saving and making money.
Laurence Fink, the head of BlackRock, went further, stating that climate risk will completely reshape the nature of capital markets themselves, forcing investors to “re-assess core assumptions about modern finance.”
If you don’t believe the hard-nosed capitalists, consider that, in November of 2019, more than 11,000 scientists declared a “climate emergency” and warned of “untold suffering” unless we act now.
Or that in October of 2019 a Pentagon report stated that “the U.S. military could collapse within 20 years,” due to the disruptions and dislocations caused by climate change.
Or that a 2018 article in The Wall Street Journal outlined how climate change is “Forcing the insurance industry to recalculate” how it assesses risk.
Or that the American Medical Association declared last year that climate change is one of the greatest public health threats that we face.
These are not environmental groups. These people are deeply aware of the massive risks to our way of life that climate change poses.
What do we do? Is it too late to do anything? It is not too late. The best option is to implement a market-based solution such as a “carbon fee,” which puts a price on the gases we emit in the course of doing business.
Contrary to what some might suggest, this is not a radical idea. We pay fees for our sewers, our trash and all the other things we dispose of, so why not carbon?
Economists agree. In 2019, the Wall Street Journal published a letter from 3,558 U.S. economists stating that “Global climate change is a serious problem calling for immediate national action,” and that, “a carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.”
Considering that all corners of our society — businesses, agencies and scientists — support a carbon fee, I strongly encourage our state and local leaders to consider a resolution supporting national carbon fee legislation such as H.R. 763, which is currently sponsored by almost 80 representatives (and recently promoted in a Deseret News commentary by the mayors of Heber City and Midway).
This legislation would not only discourage the emissions of heat-trapping gasses but would also mitigate the costs by passing revenues back to the people affected most. A market-based solution will pay huge dividends as we transform our economy into an environmentally friendly powerhouse.
Reversing climate change is not just a moral imperative. We need to do this for our collective health, well-being and safety, while at the same time creating lasting, sustainable wealth for generations to come.
K.C. Hildreth is an entrepreneur, business owner and consultant who lives in Park City.