The collapse of Sarah Bloom Raskin's bid to be the Federal Reserve's top banking cop shows how deeply oil industry allies in Congress are dug in against weaving climate change into financial oversight.
Catch up fast: Sen. Joe Manchin (D-W.Va) on Monday announced opposition to her nomination as vice chair of the Federal Reserve, effectively dooming her chances amid unified GOP opposition.
Why it matters: The stiff headwinds facing this nomination demonstrate how much resistance there is among the fossil fuel industry and its allies in Congress to integrating climate change risk analysis into the work of the country's top financial regulatory institution.
- It's not the analysis that worries opponents of her nomination, but where such studies might lead.
The big picture: Progressives and climate activists championed Raskin's nomination because they were eager to see someone with extensive knowledge of the ways in which climate change, through extreme weather and climate events, related geopolitical upheaval and other effects, poses economic risks.
- Not having her in the powerful role of vice chair of supervision means big banks will have less (but not zero) reason to worry about continuing to finance fossil fuel projects and plan for climate-related financial shocks.
The intrigue: The unprovoked Russian invasion of Ukraine impeded the Raskin nomination as well, since it helped cause gas prices skyrocket, and underscored the importance of relying more on domestically-produced energy.
- Manchin has argued for increasing U.S. oil and gas drilling in response to the war.
- In Raskin, Manchin saw an impediment to that vision.
- So too did many oil and gas companies and their trade groups, which lined up in opposition to her nomination, while environmental groups supported her.
Zoom in: In announcing his opposition to Raskin's nomination, Manchin pointed to her climate views, stating: "Her previous public statements have failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs."
- Her writings as an academic show that not only does she think the Fed should ensure that banks get prepared for the consequences of climate change, but also that banks and their regulators should play a positive role in a clean energy transition, shifting funding away from fossil fuels and toward clean energy.
- She played down the role of the Fed in picking energy winners and losers during her January testimony before the Senate Banking Committee, though ranking member Pat Toomey (R-Pa.) did not buy the reversal, dismissing it as a "confirmation conversion."
Between the lines: Assuming Raskin is forced to bow out, the Banking Committee Republicans' tactic of boycotting attempts to vote on Biden's recent Fed nominees will have paid off.
