Depending on the part of the world you’re in, the mention of economist Mark Carney can elicit different responses. In Canada, Carney is widely credited with steering the country through the rocky waters of the 2008 financial crisis. But in the United Kingdom, he’s often labelled a political activist disguised as an economist.
Carney served as governor of the Bank of England until Jan. 31. During his tenure, he made a radical shift from economist and strategist to political activist with a clear agenda.
Following the election of Boris Johnson as prime minister, and the realization that Brexit was actually going to happen, the Bank of England was forced to pedal back some of its predictions of impending economic crisis.
In December, United Nations secretary general Antonio Guterres announced that Carney would lead a new push to ensure the financial sector embraces “climate emergency” issues as the UN special envoy on climate action. It’s a natural fit for Carney, who has been warning how climate change could “cause a new crash” since 2015.
Carney said disclosures of climate risk “must become comprehensive” and that “investing for a net-zero world must go mainstream.” It’s an assertion that demonstrates his willingness to advocate a political position while warning businesses that if they refuse to adapt to his vision, they could face severe financial penalty.
Carney isn’t afraid to throw his weight around either. As the chief of the international Financial Stability Board, he directed companies to disclose potential risks they face as a result of climate change, despite bankers and finance professionals not identifying any imminent threat. It seemed to be little more than a vanity project.
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In October 2019, Carney said transition to net-zero carbon emissions would change the value of every asset and raise the risk of shocks to the financial system.
He’s right. The value of assets in the fossil fuel industry will change, coal-fired plants are closing in major economies like the United States, but global energy demands are enormous and growing.
U.S. President Donald Trump has demonstrated his commitment to protecting the coal industry and has proposed relaxing environmental regulation to make it easier to establish new oil drilling sites and coal mines.
As it stands, renewable energy can’t meet the global economy’s growing demands for energy. The U.S. relies on fossil fuels for 80 per cent of its energy needs. In Canada, fossil fuels account for almost 90 per cent of domestic energy production.
In 2018, BloombergNEF’s annual survey of over 100 developing markets found that investments in solar, wind, and other renewable energy projects fell to US$133 billion, down $33 billion from the previous year. Clean energy investments in India are declining as the nation struggles to keep up with its growing energy demands, and China is relying on more coal than ever.
The renewable energy industry isn’t ready for prime time. And the movement behind it has a tendency to attract extreme-left, progressive ideologues.
Current renewable energy technology can’t satisfy demand and the costs are often prohibitive. Fossil fuel isn’t going away any time soon. Carney’s warnings, when put into the context of his tales of a Brexit economic doomsday, resemble threats more than honest analysis.
It’s also hard to ignore the political and professional affiliations of his wife. Diana Carney is an environmental activist who was previously vice-president of research at “progressive” think-tank Canada 2020 and is an ambassador for the World Wildlife Fund. As executive director of Pi Capital, her work focused on “climate and energy issues” and “identifying pathways for more sustainable capitalism.” She supports green economy initiatives and is recognized globally as a leading campaigner for radical policy to address what she identifies as a climate emergency.
The parallels between Diana Carney’s work and Mark Carney’s recent interventions in finance have not gone unnoticed. The couple even insisted in April 2013 that they’re separate people with separate opinions. Events since appear to suggest otherwise.
In fact, Carney’s vanity projects and haughty attempts to ensure businesses abide by rules dictated by his and his wife’s worldview pose two questions:
- Why should we trust Carney, a man who showed disdain for the Brexit decision made by the British people and who willingly incorporates the political agenda of his wife into his work as a leading global economist?
- Is he suited to being a leading voice on such a divisive political issue? If consensus, or even compromise, is ever to be reached on climate change and renewable technology, is Carney the man to do it or is he another ideologue who represents establishment scorn for regular people?
Carney is quickly turning into the Greta Thunberg of finance; only it’s his wife pulling the strings and not his parents.
Jack Buckby is a research associate with Frontier Centre for Public Policy.