A pragmatic rejection of the “climate cartels” – is Watt unhappy about this?

Wells Fargo’s decision to withdraw from the Net Zero Banking Alliance (NZBA) is a stark reminder that not everyone in finance is willing to unquestioningly follow climate orthodoxy. The departure of the bank, one of the fossil fuel industry's biggest financiers, underscores growing doubts about the necessity and even legitimacy of these alliances. Wells Fargo's withdrawal marks a turning point in the global push for so-called “climate finance”, following Goldman Sachs' withdrawal from the NZBA earlier this month.

Rep. Jim Jordan, chairman of the House Judiciary Committee, described environmental alliances such as the NZBA as a “climate cartel,” accusing them of promoting collusion, manipulating markets and driving up energy prices. His committee found what it called “substantial evidence of collusion and anticompetitive behavior” by financial firms associated with these alliances. Against this backdrop, Wells Fargo’s decision reflects a rational alienation from an initiative that is not only fraught with legal risk but is also based on highly uncertain and controversial climate science.

NZBA: Flawed premise and sensational goals

NZBA was established in 2021 under the leadership of the Glasgow Finance Alliance for Net Zero (GFANZ) to position itself as key to global climate policy. More than 100 major banks have committed to aligning their lending and investment portfolios with the Paris Agreement, targeting net-zero emissions by 2050. , adopting “green” technologies while reducing the financing of fossil fuel projects.

However, this approach has serious flaws. It presupposes that the climate crisis narrative is based on conclusive science—an assertion that is far from proven. The models driving the net-zero agenda are rife with uncertainties, from exaggerated temperature projections to underestimation of natural climate change. Worse, they rely on speculative technologies such as carbon capture and storage (CCS), which are expensive, unproven and decades away from being scalable.

No wonder financial institutions like Wells Fargo are starting to see the holes in these grandiose promises. Climate finance marketed by groups such as the NZBA often prioritizes virtue signaling over economic and scientific reality.

Political and Legal Resistance: Growing Backlash

The U.S. political climate has become increasingly hostile to these climate initiatives, especially under scrutiny from Republican lawmakers. MP Jordan's criticism of the NZBA as a “climate cartel” is emblematic of wider skepticism about the net zero agenda. Texas and other states have filed lawsuits accusing the financial union of violating antitrust laws and artificially raising energy prices by blocking investment in affordable fossil fuels.

The accusations point to a larger problem: the NZBA’s mission to impose top-down centralized control over key economic sectors under the guise of climate management. This behavior is not only legally questionable, but also runs counter to free market principles. For a bank like Wells Fargo that is deeply involved in fossil fuel financing (and ranked second in bond and loan arrangements in the industry since 2020), staying with the NZBA could jeopardize its relationships with clients and create regulatory and reputational risks Open the door.

Why “climate action” is premature at best

One of the most glaring problems with coalitions such as the NZBA is their reliance on the assumption that urgent “climate action” is both necessary and beneficial. The foundation of this assumption is shaky. The science supporting catastrophic climate predictions is not as certain as advocates claim. Historical climate change, model inaccuracies and questionable data adjustments undermine the narrative of looming climate catastrophe. Furthermore, policies based on these flawed premises often lead to unintended consequences, such as rising energy prices, economic instability, and heightened geopolitical tensions.

Efforts to push for rapid decarbonization ignore these uncertainties while pursuing strategies that could undermine economic stability and social resilience. Renewable energy sources such as wind and solar, while growing in capacity, remain unreliable and insufficient to meet global energy demand without massive and expensive upgrades to grid infrastructure. At the same time, fossil fuels continue to supply most of the world's energy, ensuring the stability and growth of developing and industrial economies.

Wells Fargo's withdrawal from the NZBA is a presupposition of these realities. Rather than investing in speculative green technologies and committing to unachievable emissions targets, the bank has chosen to prioritize its fiduciary duties and financial responsibilities.

Wider trend: Rejecting 'green dogma'

Wells Fargo isn't the only bank questioning the environmental coalition's logic. Goldman Sachs, Franklin Templeton and other firms have recently withdrawn from climate initiatives such as the NZBA and Climate Action 100+, citing similar concerns about the economic and legal implications of their participation.

This trend demonstrates a growing rejection of what can only be described as “green dogma”. These measures require sweeping changes to the global economy but provide no clear evidence of their effectiveness or feasibility. Worse, they often fail to take into account the unintended consequences of their policies, such as rising energy costs, reduced industrial competitiveness, and increased energy poverty in vulnerable regions.

For financial institutions, the calculus is increasingly clear: Staying in these alliances carries more risk than reward. The costs of complying with net zero commitments – both in terms of compliance risk and reputational risk – are quickly outweighing any perceived benefits.

Conclusion: No crisis, no action

Wells Fargo's withdrawal from the NZBA is not a failure of climate policy, but an indictment of its business philosophy. The assumption that we face a climate crisis that requires urgent, radical action is not supported by evidence. Instead, uncertainties in climate science, the limitations of renewable technologies, and the economic risks of decarbonization suggest that a more cautious approach is necessary.

Rather than surrendering to political alliances that dictate economic behavior under the guise of saving the planet, institutions like Wells Fargo are demonstrating the value of skepticism and pragmatism. The reality is that the world does not need comprehensive climate action but rather stability, economic growth, and rational approaches to environmental challenges that avoid sacrificing prosperity on the altar of ideology.

With the NZBA and similar initiatives facing increasing scrutiny, it is time to rethink the entire premise of climate finance. The focus should be less on chasing utopian visions and towards policies and practices based on evidence, market dynamics and an understanding of the complex realities of the global energy system. Until then, withdrawals from these alliances are likely to continue — and rightfully so.

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