Greenwasher: US climate bill gives banks a green win
A US climate bill filled with green credits will create business for banks and provide relief from the backlash against ESG products.
The Inflation Reduction Act of 2022 is named in the Washington tradition of giving legislation a title that reflect the goals of its sponsors – in this case a desire for Democrats to be seen to tackle inflation.
The biggest portion of the bill is actually devoted to tackling climate change, in the form of $369 billion of spending, mostly in the form of tax credits for green initiatives.
Climate change activists can debate whether US politicians should have chosen incentives rather than sanctions to promote reform, but there is no question that the bill will generate business for banks.
Existing green banks set up by states in the US have generated $3.70 of private investment for each $1 of public money invested
Some of this will be indirect, as in the expected effect of $27 billion set aside for the first national green bank in the US, to be called the Greenhouse Gas Reduction Fund. Existing green banks set up by states in the US have generated $3.70 of private investment for each $1 of public money invested, according to a study last year, and a federal initiative may have a bigger multiplier effect.