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Gonzales: Reappointing Powell to Fed chair would be anti-climate move

State Sen. Sally Ann Gonzales represents LD 3 in the Arizona Legislature.

Climate change is producing record fires, floods, and countless natural disasters that are destroying homes, cities, and communities. As the nation’s central bank, the Federal Reserve could help mitigate this damage: it could divest from pollutants and encourage the development of clean technologies. Fed Chairman Jerome Powell has refused to do so, instead of using our banking system to back fossil fuels and perpetuate the climate crisis. Reappointing him to a second term would be devastating for our environment and damaging to our economy. 

Powell has long been supportive of the fossil fuel industry. As a partner at the Carlyle Group, a global private equity firm, he oversaw various deals that invested heavily in nonrenewable energy sources. These include financing various oil and gas exploration, drilling, and pipeline projects, as well as acquiring several gas exploration and production companies. During Powell’s tenure, Carlyle also purchased Magellan Midstream Partners, an energy transportation, storage, and distribution company, which has been responsible for countless oil spills and discharges that have harmed both the environment and our GDP.

These are not the only instances in which Powell has financed the contamination of the planet. When Powell was managing director and senior advisor for the Global Environment Fund, the company purchased and invested in forest harvesting and natural gas companies, both of which release greenhouse gases into the atmosphere. Greenhouse gases can create stronger and more threatening forest fires, leading to local labor market instability, property loss, and other long-term economic ramifications.

As Fed chair, Powell has yet to commit to stress-testing banks for climate-related issues. These tests would ensure that consumers are protected from climate-related losses due to negative economic shocks. His contemporaries, central bank chiefs around the world, have acknowledged the threat of climate change and have committed to incorporating climate into monetary policy decisions. European Central Bank President Christine Lagarde said that the bank would consider including climate risk disclosure conditions in its criteria for buying corporate bonds and accepting collateral.

Instead of regulating the fossil fuel industry, Powell has invested millions into these companies to enrich himself and hurt our financial system. He holds nearly $12 million in investments through BlackRock, a major investor in fossil fuels and deforestation. Powell also has between $1.5. million and $6 million invested in Vanguard, the world’s top investor in coal. To ensure the security of the companies in which he invested, Powell provided these companies with the Fed’s backing during COVID-19. While big banks like BlackRock received $75 billion in funds, millions of Americans lost their jobs and the planet continued to suffer.

If Powell is chair of the Fed for another four years, the planet will continue to see devastation while he profits. At a time when every second counts to mitigate the effects of climate change, we can’t afford to have this chair lead the Federal Reserve. Instead, we need someone who does not prioritize his own wealth over the health of the planet. As a proud environmentalist and state senator in Arizona, I urge President Joe Biden to recognize this and choose not to re-nominate Jerome Powell to a second term.

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