A state report estimates that Washington state taxpayers spent more than $1.2 billion in the 2019-2021 biennium on climate resiliency costs from forest fires to floods, ocean acidification to heat domes.
Sen. Reuven Carlyle (D-Seattle), chair of the Senate Environment, Energy & Technology Committee, will introduce a bill in the 2022 legislative session imposing a modest new climate resiliency fee on global financial institutions funding fossil fuel projects. The fee would raise approximately $80 million to $100 million a year to contribute toward those costs. The fee, in the form of a B&O surcharge, would be reduced and eliminated by 2050 if the financial institutions meet their stated goals of net zero carbon emissions for investments.
The revenue created from this initiative would be devoted to climate resilience activities to help communities adapt to existing climate challenges. Potential projects could include creating public cooling centers, relocating infrastructure at risk from peak flood events and sea level rise, and helping farmers and communities secure access to critical water supplies during more frequent and severe droughts.
At the same time, an analysis shared by Bloomberg Business of the world’s largest commercial and investment banks found that they invested more than $3.6 trillion combined into the fossil fuel industry in the five years immediately after the Paris Climate Agreement was signed.
“One of the most profound lessons from the UN Climate Summit conference was that global banks have financed almost three times more fossil fuel than clean energy projects since the Paris Agreement in 2016. At the same time, these same banks have made commitments to design net zero portfolio investments by 2050. This bill is simply asking those funding climate change to pay a modest fee toward the cost that Washington taxpayers are currently spending on climate resiliency. The fee goes away when the banks achieve net zero. It’s not a punishment or a tax, it’s a modest fee to contribute toward climate resiliency in our state.”
One of the biggest commitments from COP26 came from financial institutions who committed to get to net zero emissions targets in their investments by 2050.
In fact, over those five years the total funding for the fossil fuel sector has increased, despite these institutions’ public commitment to meeting carbon neutrality by 2050.
“Decarbonization and climate resilience efforts aren’t a white paper or an academic theory down the hall. Our central, steadfast focus in Washington is to build a sustainable future that truly benefits real people living real lives on the front lines,” Carlyle said. “The reality of the situation is we need everyone doing their fair share. These funds will go a long way to ensure Washington prepares itself for the challenge climate change poses to our economy, communities, and quality of life.”
Financial institutions would stop facing the resiliency fee in 2050, when their COP26 pledge to reach net zero emissions funding takes effect, or sooner if their underwriting and lending practices with respect to the fossil fuel industry drop to 5 percent or less of their 2022 levels.