Let’s be honest: If we want the Green New Deal to succeed, then America’s banking system is going to make some major changes. The current banking system in the US doesn’t meet the equity or environmental aims of the Green New Deal, and many of the banks we put our money into actually support fossil fuels. To properly finance the Green New Deal, many activists have been rallying around the idea of a different type of financial institution: public banks.
As the name implies, they are publicly owned, often by cities, and accountable to the people who live there, not their shareholders. Big private banks like Wells Fargo tend to invest the money they hold in immediately profitable ventures, like securities trading and yes, oil projects, because the people who own stock in the banks demand large returns. In contrast, public banks are owned by the government, and their primary obligation is to support constituents. They can do this through making low-interest loans to small businesses or to necessary infrastructure projects.
In the past several years, public banking has gone from a fringe idea, buoyed by the controversy around DAPL, to a viable policy route that cities from San Francisco to Washington, DC, are considering. And it makes sense: if we want to aggressively decarbonize the economy, then leaving it up to private banks like Wells Fargo to divest from fossil fuels isn’t going to cut it.
