Abstract
The energy industry in the United States is headed toward an economic crisis with disastrous financial and climatic implications, both with national and global consequences. Future litigation against fossil fuel companies, potential aggressive regulation on extraction, and ever-decreasing renewable energy prices all stand as major threats to fossil fuel companies. Even as this potential looms, oil, gas and coal companies continue over-valued. When these pressures come to bear, market corrections could trigger a global financial crisis many times greater than that of 2008. This contribution aims to expose the looming carbon bubble threat in the US financial system. Additionally, it aims to explain how the Federal Reserve along with new and re-envisioned financial institutions, such as a national Green Investment Bank and a network of regional and local public banks, can pro-actively start deflating it today by enabling a planned transition away from fossil fuels.
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Notes
- 1.
111th Congress Public Law 203 (2010).
- 2.
The steps outline is an oversimplification of how fossil fuel companies’ resolution would take place, but it aims to provide a framework on how it could be implemented.
- 3.
“Quantitative easing” refers to the process by which the Fed increases the money supply in the economy, usually by purchasing financial assets in the market.
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Skandier, C.S. (2020). Planning for the Carbon Crisis: Reimagining the Power of the US Central Bank and Financial Institutions to Avert a Twenty-First-Century Climate and Financial Disaster. In: Walker, T., Gramlich, D., Bitar, M., Fardnia, P. (eds) Ecological, Societal, and Technological Risks and the Financial Sector. Palgrave Studies in Sustainable Business In Association with Future Earth. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-38858-4_9
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