WASHINGTON, D.C. – Two days after the summer solstice in June 0f 1988, National Aeronautics and Space Administration (NASA) scientist James Hansen went before Congress to announce that the “greenhouse effect” had arrived a century earlier than expected, just as an historic heat wave was beginning to sweep across the country, leading to the worst drought since the Dust Bowl and killing thousands of people.
ABC news anchor, Peter Jennings, followed Hansen’s impeccable timing on the network’s prime time broadcast the next evening, with stories about desperate farmers in Sumner County, Iowa, imploring the heavens for rain at spontaneous prayer vigils, and footage of telephone operators answering a flood of calls to a federal hotline for disaster relief as nearly half of the nation’s agricultural sector suddenly qualified for government assistance.
Months earlier, Hansen’s colleague and chairman of the space agency’s Earth System Science Committee (ESSC), Francis Bretherton, had predicted the unprecedented rise in temperatures in a Time magazine feature story, titled “The Heat is On – Chemical wastes spewed into the air threaten the earth’s climate”, and in May, Royal Dutch Shell executives were made privy to a secret report commissioned by the company, detailing how its own products contributed to the rise in CO2 emissions.
Man-made climate change was a novel concept for the vast majority of people, but for NASA and other Cold War-era defense entities that stood to lose their meal ticket as a result of Gorbachev’s ongoing reforms in the Soviet Union, the notion that human activity was precipitating an environmental catastrophe had been gaining momentum since the beginning of the decade and presented a golden opportunity to keep federal funds flowing.
At the start of the year, Bretherton’s committee called for the creation of a “comprehensive, integrated program” to “identify outstanding opportunities for the contribution of space observations to the study of Earth evolution on all timescales.” Formed in 1983, the ESSC was put together to pave the way for the agency’s turn away from interstellar space exploration to focus on monitoring the Earth’s atmosphere, land surface and oceans through Mission to Planet Earth (MTPE) – a $33 billion boondoggle described as the “largest science program the agency has ever undertaken”.
But, self-interested federal agencies were only part of the story. A paradigmatic shift was taking place at the highest levels of Western power structures as the nuclear standoff between the United States and the USSR was winding down, and a new ‘world order’ loomed over the horizon. In the first week of January, UK current affairs weekly The Economist published its infamous “world currency” issue, featuring the mythical symbol of transformation through fire on the cover, and warning readers to prepare for a global monetary system.
A fictional scheme named the “phoenix zone” by the unattributed authors would fix the problems caused by competing national monetary policies through the establishment of “a new central bank, descended perhaps from the IMF”, that would force greater economic integration. Admitting that such a plan entailed “a big loss of economic sovereignty”, the authors nevertheless argued that the existing floating exchange rates system already did much the same.
Overcoming resistance to a transnational economic policy mechanism was to be achieved through further “exchange-rate upsets” or “more stock market crashes”, like the crash that had just rattled markets only a few months before. The crash of October 19, 1987 – Black Monday – still holds the record of the worst downturn in Wall Street history and the first computer-driven market collapse ever. According to The Economist, a little more pain and a little more heat might help the governments of the world “subordinate their domestic objectives” and see the virtues of the phoenix.
Turning Up the Heat
Seven days after Barack Obama became President-elect in 2008, sitting President George W. Bush hosted an emergency meeting for the heads of state of G20 nations at the National Building Museum in Washington, D.C. for the first ever Summit on Financial Markets and the World Economy. Resolving to “enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems”, world leaders agreed to set their ‘domestic objectives’ aside for the creation of a new global monetary policy system at the forthcoming official G20 summit to be held the following spring in London.
When their entourages arrived at the British capital in April 2009, they were greeted by thirty-five thousand protestorsdemanding “climate justice” and an end to the “old ideas of unregulated free markets”, which according to a union organizer interviewed by The Guardian, had done “far too little to move to a low-carbon economy”. Organized by a “rainbow alliance” of more than 160 civil society groups, trade unions and NGOs under the Put People First rubric, the mass demonstration was propagandized as “the beginning of the fight for the next 20 years” by some of the more high profile rabble rousers.
London’s G20 summit was the launching pad for “grassroots” green youth ‘anarchist’ movements and other left-leaning, presumably anti-capitalist groups challenging the status quo, which would soon spread to the US as the Occupy Wall Street phenomenon and lay the ideological foundation to capture future generations through organizations like UK-based Extinction Rebellion (XR) and the Greta Thunbergs of the world, which drive the purported grassroots climate justice debate today.
Behind the public spectacle in Hyde Park, G20 leaders were signing off on the creation of an international body to monitor and address the risks posed to global financial markets. The Financial Stability Board (FSB) was spawned from the World Bank’s Financial Stability Forum, a small subsidiary of the global lending institution. Incorporated as a non-profit in Basel, Switzerland, the FSB would be funded by the Bank for International Settlements and comprised of all G20 member nations and the European Commission.
U.S. Treasury Secretary Timothy Geithner, appointed by the Obama administration earlier that January, described the FSB as “in effect, a fourth pillar” of the architecture of global economic governance. Simultaneously, current and former economic policymakers like ex-Fed chair Paul Volcker, business executives, and academics in the US held their own get together, known as the Group of Thirty, which issued a recommendation to create a stateside version of the FSB they called the Financial Services Oversight Council.
Their proposal resulted in the establishment of the Financial Stability Oversight Council (FSOC) and the Office of Financial Research at the US Treasury Department a year later through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Both of these agencies, along with the international FSB were created for the express purpose of reigning in the so-called “shadow banking” sector, which had nearly brought the global financial system crashing down between 2007 and 2008.
The subprime mortgage crisis had provided the perfect excuse to sell the nations of the world on the idea of sacrificing some of their “economic sovereignty” in favor of a more ‘stable’ economic paradigm. Driven by credit default swaps (CDS) – an over-the-counter (OTC) derivative invented by self-proclaimed “Cryptocurrency Queen“, Blythe Masters –, the controlled demolition of the global economy was orchestrated through AIG’s (American International Group) London subsidiary, AIG Financial Products (AIGFP).
AIGFP had been writing credit default swaps on subprime mortgage-backed securities at an extraordinary rate since 2007, and had accrued almost $440 billion worth of bonds by the end of 2008. Institutional investment firms like Bear Stearns and Lehman Brothers were used to inject the toxic instruments into the global financial sector, with the collusion of rating agencies vouching for them.
Foreknowledge of the impending ruin was evident months before when a mysterious insider placed $1.7m worth of put options on Bear Sterns’ stock at half the price only days after then Fed chair Ben Bernanke had announced a $200b lending program to “shore up confidence” in the credit markets. Four days later, Bear Stearns stock plummeted to single digits, making the anonymous trader or traders a tidy profit of $270 million. A Chicago-based securities firm executive interviewed by Bloomberg at the time made the obvious inference when he described the transaction as “not even on the page of rational behavior, unless you know something.”
The Federal Reserve Bank of New York (FRBNY) also seemed to know something when it withdrew their initial $25 billion credit facility it had initially extended to the embattled investment firm, causing the stock price to collapse and triggering the improbable futures contract payout. The fire sale of Bear Sterns to JP Morgan for just $10 a share took place the following day at an emergency meeting as the controlled demolition of the global financial system got underway.
By September, AIG’s derivative contracts began getting margin-called as the underlying subprime mortgage-backed securities started to unravel. With virtually no cash on hand to meet the calls, the federal government stepped in with an unprecedented $182 billion-dollar bail out, claiming that the insurance company’s interconnectedness to the global financial system made AIG “too big to fail”. Lehman Brothers, which held a massive position in the derivative markets, was sacrificed to the gods of Wall Street in the ensuing slaughter on the eve of the general election.
Former Senator Christopher Dodd, of one Obama’s primary challengers and then chair of the Senate Banking Committee, aired a campaign ad one week before the second Democratic candidates’ debate in 2007 presenting his plan to deal with greenhouse gases through alternative energy systems. It was the first time an American presidential candidate had ever introduced global warming as a campaign issue, according to NPR.
CNN host Wolf Blitzer moderated the debate in New Hampshire on June 7, which focused heavily on the Iraq war and rising gas prices. Dodd framed the issue as a question of oil “dependency on the Middle East” and proposed the development of “alternative technologies” to solve the knock-on effect of global warming, adding that a “carbon tax” could further help to reduce pollution and raise money to fund “other sources of energy”, such as wind and solar.
Dodd would bow out of the race in January, 2008, less than two months before the Bear Sterns fiasco. The senator would oversee the overhaul of the financial regulatory system alongside Congressman Barney Frank and create the provisions upon which the climate-related financial risk assessment criteria would rest. Both the FSOC and the OFR, established by Dodd-Frank, are central pieces in the ‘green’ economy framework.
The OFR runs a climate data and analytics program in collaboration with the Federal Reserve Board and the Federal Reserve Bank of New York, which is designed to provide FSOC member agencies with climate risk data. Launched in July, 2022, the pilot will inform the FSOC’s Climate-related Financial Risk Committee (CFRC), a staff-level interagency committee which was created in 2021 to coordinate the roll out of climate-related disclosure requirements, such as (Environmental, Social and Governance) ESG and others.
These initiatives dovetail with parallel efforts undertaken by the FSB, which established the Task Force on Climate-related Financial Disclosures (TCFD) in 2015. The TCFD, chaired by Michael Bloomberg, works with governments and private sector entities around the world to implement climate risk assessment frameworks into their economic policy and operations. A subsidiary body called the Taskforce on Nature-related Financial Disclosures (TNFD) was established in 2021 with HSBC and BlackRock as principal partners.
TNFD, which is run by former UK director of international development Andrew Mitchell, is tasked with engaging indigenous communities in Global South countries to integrate them into the ‘sustainable development’ frameworks, that are tied to the climate risk data flowing through the planetary surveillance systems pioneered by NASA’s Mission to Planet Earth and the Global Change Research Program (USGCRP), known as the Climate Change Science Program, which has been responsible for issuing the National Climate Assessments that have driven climate change policies at the federal level in the United States since the early 1990s.
Conclusion: Changing Perspectives
Royal Dutch Shell continued to commission confidential studies on climate change for 30 years before the existence of “The Greenhouse Effect” was made public in 2018 and despite the seemingly obvious conclusion drawn by critics, the implications of the petroleum giant’s awareness and proactive research into climate change are much more profound than would appear at face value.
The advent of climate change on the world political stage just before the formal end of the Cold War was no accident. It is also no coincidence that Anglo-American energy interests would find themselves at the vanguard of the scientific research surrounding the alleged threat to the planet by the use of fossil fuels, and oil, in particular.
After all, the “Seven Sisters” petroleum cartel controlled by the largest Western oil concerns had lost physical control of the resource as a result of the Suez crisis and subsequent developments in the Middle East, leading up to the oil shock of the 1970s. All of the best laid plans of the post war had to be abandoned if the West was to survive. The Petrodollar and floating exchange rates maintained a measure of control by giving the Anglo-American establishment levers with which to control the energy markets, but it was a temporary solution, at best.
Climate change is fundamentally about controlling energy resources. By tethering oil, natural gas and coal to a financial risk assessment model, possession of the actual resource becomes superfluous. Energy becomes information moving through the cybernetic pipelines of the data economy and the activists” calls for “climate justice” become more effective at defeating national sovereignty than any standing army.