Nine Republican senators last week urged the Federal Reserve to stop engaging in “climate activism,” saying that the institution’s “credibility hangs in the balance.” In a letter, the senators pointed to a pilot climate change scenario analysis exercise the agency is conducting with some of the largest banks to gather information on climate risk management. They also singled out climate risk events and conferences hosted by Fed banks.
“All of this work is being done and man hours are being spent on climate change by an institution that has no statutory authority to do so, and without any scientific expertise,” the senators said. “There is no shortage of work to be done on issues directly within your statutory authority as evidenced by the Fed’s recent whiff on inflationary policy and inept oversight leading to the [Silicon Valley Bank] crisis.”
The senators accused the Fed of signaling to banks that investment in traditional energy development was “inherently risky and disfavored” by having large banks model for a net zero emission economy. “The independence of the central bank is a hallmark of our financial system and is crucial to protecting it from partisans with short-term interests, however, this independence has been greatly undermined by the Fed’s persistence on entering into the political arena—especially on the issue of climate change,” they said.