Jamie Dimon used a highly-anticipated letter published Tuesday to discuss the risk of banking contagion and threatening clouds hanging over the U.S. economy. But against the background of immediate economic dangers, Dimon spared some space to urge the U.S. to do more to meet the climate crisis, and took sides in one particular political debate to make his point.
The JPMorgan Chase CEOs annual letter to shareholders is a closely-watched affair for its insights into the economy and what is happening in the upper levels of Americas largest bank. In past letters, Dimon has not shied away from calling for a new bipartisan Marshall Plan for America to efficiently refocus spending on issues including high healthcare costs, student debt, and decaying infrastructure. He took the opportunity to do so again in his most recent letter, this time addressing attempts in Congress to overhaul requirements for clean energy technologiesefforts that have so far run into multiple political stumbling blocks.
To expedite progress, governments, businesses and non-governmental organizations need to align across a series of practical policy changes that comprehensively address fundamental issues that are holding us back, Dimon wrote. At the same time, permitting reforms are desperately needed to allow investment to be done in any kind of timely way.
Dimon is referring to repeated attempts in Congress to simplify and expedite the process of gaining a permit for energy projects. Technology to help decarbonize our energy systemincluding solar panels, wind turbines, and more transmission linesremains a darling for investors despite the souring market environment. Thats at least in part because billions in government funding has poured into clean energy because of President Bidens Inflation Reduction Act. The Biden administration considers investment in clean energy key to building the infrastructure it needs to meet its climate goals, which include 100% renewable electricity by 2035 and net-zero emissions by 2050.
But while interest and funds to build that infrastructure exists, permitting requirements still stand in the way. Politicians opposed to renewable power, NIMBY property owners, and even fossil fuel-reliant power companies have been known to employ experts who can obstruct approval processes, eventually holding up permitting for so long that companies interested in developing a clean energy project finally just give up.
Calls for permit reform
Policymakers like Senate Majority Leader Chuck Schumer and Democratic Sen. Joe Manchin have long argued for permitting reform, while Republicans have opposed it on the grounds of government overreach and far-left Democrats have warned easier permits could weaken environmental laws. Dimon is in favor of permit reforms, but in his view overhauls arent happening fast enough.
We may even need to evoke eminent domain, he wrote, referring to the governments ability to purchase private property for public use without requiring the property owners consent. [W]e simply are not getting the adequate investments fast enough for grid, solar, wind and pipeline initiatives.
This isnt the first time that Dimon has spoken about the importance of developing renewable energy capacity, along with domestic oil and gas production in the name of U.S. energy security, especially when the Ukraine War threw global energy markets into disarray. During a closed-door meeting between Biden and top-level executives last year, Dimon urged the President to create a new Marshall Plan for the U.S. and Europe prioritizing energy security and including oil and gas into the equation, Axios first reported.
In his letter to shareholders Tuesday, Dimon was vocal about the dangers of the climate crisis, and the rising costs of ignoring it.
The window for action to avert the costliest impacts of global climate change is closing, he wrote. The need to provide energy affordably and reliably for today, as well as make the necessary investments to decarbonize for tomorrow, underscores the inextricable links between economic growth, energy security and climate change. We need to do more, and we need to do so immediately.
In his letter, Dimon voiced support for large government spending packages approved under the Biden administration, including the IRA, the CHIPS and Science Act, and the Infrastructure Law. He wrote that the bills have significant advantages for U.S. manufacturing and job growth in addition to decarbonization, but cautioned that the spending had to be implemented effectively to bear fruitwhich would include smoothing over the permit approval process.
Permitting reform talks have been held up in Congress since last year, when progressive Democrats and Republicans formed an unlikely union to shoot down a permit reform bill involving a natural gas pipeline. But overhauling and easing energy permits continues to be a popular talking point in Congress.
Lawmakers from both parties have voiced support for simplified permit procedures. However, while most Democrats continued to press hard for faster renewable energy permits last month, Republicans have instead called to reform permits for oil and gas projects, requests that last year sparked condemnation from Democrats who said any permit reforms would primarily suit fossil fuel interests.
Any step forward on permit reform in a divided Congress will likely have to fast-track renewable as well as fossil fuel projects, but even that compromise could could end up as a win-win for Democrats, as Republicans have signaled they would be willing to back down their opposition to Democrat efforts to raise the debt ceiling in exchange for energy permit reform legislation.
