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Former BlackRock executive seeks unity to combat climate change
(Bloomberg) — Paul Bodnar, former head of sustainable investing at BlackRock Inc., said climate activists need to stop “demonizing” the fossil fuel industry in order to make progress on the environmental front.
“There is a lot of demonization among the industry and the environmental community right now,” said Bodnar, who now serves as director of sustainable finance at the Bezos Earth Fund. a cooperative stance.”
Speaking Monday at the GreenFin 24 conference in New York, Bodnar pointed to coal mining as an industry that creates livelihoods and generates taxes that communities depend on — as well as investment.
Bodnar’s comments follow those of executives including KKR & Co. co-founder Henry Kravis, who said last week that climate activists underestimate the difficulty of shifting the economy to clean energy. “They don’t understand the facts,” he said after activists interrupted his speech to criticize KKR’s investments in fossil fuels.
In an interview after his presentation, Bodnar said that green activism has been framed as a struggle between good and evil. “The narrative, to some extent, is that the old economy is bad and the green economy of the future is wonderful and there is nothing in between,” he said.
Instead, there needs to be a “social compact” that recognizes that while highly polluting assets need to be retired, they also produce cheap energy for many people and have been an engine of development, he said.
As the world seeks to accelerate the transition away from fossil fuels to meet climate goals, this needs to be done “in a way that minimizes value destruction for workers, communities and investors,” he said.
“The more we get into a battle between left and right or between good and evil, the more friction we introduce into the energy transition,” said Bodnar.
Bodnar said some parts of the U.S. are experimenting with taxpayer-backed bond securitization programs, where energy companies work with utility commissions to retire coal plants early and establish agreements to provide green electricity. These programs can save both taxpayers and taxpayers money, he said.
Meanwhile, some in the financial sector mistakenly consider projects that focus on adapting to climate change, such as water pumps, air conditioning and wildfire analysis, as a “line item in the government budget,” Bodnar said. investment in which you will see engineered products,” said Bodnar.
“It’s a blind spot for capital markets today,” he said.
Bodnar previously worked in the Obama administration as a special assistant to the former president and senior director for energy and climate change at the National Security Council. Prior to that, she worked at the U.S. Department of State as lead negotiator for climate finance.
Bodnar’s comments come at a time when efforts to transition away from fossil fuels have been thwarted by Russia’s attack on Ukraine and growing energy demands linked to artificial intelligence.
Green energy stocks, as measured by the iShares Global Clean Energy fund, are down nearly 60% from their 2021 highs. The decline came as high interest rates, rising raw material prices and challenging persisters in the supply chain hampered the wind. and solar industries. At the same time, electric vehicle sales have slowed as higher financing costs weigh on consumers. This week, electric vehicle maker Fisker Inc. filed for bankruptcy.
(Adds comment from Bodnar in fifth paragraph.)
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