On September 21st, 2014, the largest climate march in world history lit up New York’s city streets with colorful protesters. Leading the way of the 400,000-strong marchers were indigenous peoples from around the world, calling on world leaders to take action on climate change. As we argue in our new report (link below) climate risk bonds may be an important part of the solution.
Indigenous peoples were rightly on the front lines of the climate march: They are on the front lines of much of the oil, gas, coal and tar sands extraction globally. And they are suffering some of the biggest costs of climate change—cancers from poisoned waters downstream from tar sands mining, homes falling into the oceans and rivers as permafrost melts and flooding increases with a warmer climate. As subsistence-based peoples, many Native peoples are finding their ability to hunt and gather foods as they have for centuries harder as climate change accelerates, threatening their way of life.
Following the climate march, thousands of protesters “flooded Wall Street.” Two years earlier, in the wake of Hurricane Sandy on Oct 29, 2012, as the evening high tide was drawing closer, Wall Street was literally flooding, cars bobbing up from underground garages. So on September 22nd, 2014, protestors “flooded” Wall Street again to remind the world that our political and economic system continues to ignore one of the biggest crises—perhaps the biggest existential crisis of our time: climate change—while going full steam ahead with business as usual.
But in the context of a changing climate, we all know business cannot continue as usual. Among the things that must change: An economic system where oil, gas and coal companies make immense profits and control our politics while the rest of us pay the price for the destabilization of our atmosphere.
Among the demands that the indigenous-led protesters put forward in the New York climate march was the need to put a price on carbon. While a carbon tax (ideally, a fee and dividend of some sort, to avoid regressive impacts) is one approach, we propose here something that can both supplement a carbon tax or be done entirely independently: an immediate climate risk bond that all fossil fuel companies must pay, up front at the point of extraction, to ensure that the costs of climate change, now measuring in the trillions of dollars, are captured before any more mining of oil, gas and coal continues. The International Energy Agency tells us two-thirds of all proven fossil fuel reserves must remain in the ground if we are to avoid a rise in planetary temperatures over 2 degrees Celsius. Environmental justice demands that people who are suffering the costs of climate change, North and South, be compensated for the damages they are suffering now.
This concept of “climate risk bonds” attempts to put this price tag in place. We start with Alaska, where Native peoples are suffering enormous costs, right now, uncompensated, due to climate change. But this concept can be acted on in every jurisdiction in the country and the world, without the need for approval from a recalcitrant or corrupt national government. It is a tool we can use, right now, in our communities, to begin to level the playing field in favor of clean energy.
We are running out of time and climate risk bonds sends the correct signal of economic urgency we need to send, here and now: The costly age of fossil fuels is coming to a close. Here comes the sun!