Federal Report Warns of Financial Havoc From Climate Change – By Coral Davenport and Jeanna Smialek – The New York Times

“WASHINGTON — A report commissioned by federal regulators overseeing the nation’s commodities markets has concluded that climate change threatens U.S. financial markets, as the costs of wildfires, storms, droughts and floods spread through insurance and mortgage markets, pension funds and other financial institutions.

“A world wracked by frequent and devastating shocks from climate change cannot sustain the fundamental conditions supporting our financial system,” concluded the report, “Managing Climate Risk in the Financial System,” which was requested last year by the Commodity Futures Trading Commission and set for release on Wednesday morning.

Those observations are not entirely new, but they carry new weight coming with the imprimatur of the regulator of complex financial instruments like futures, swaps and other derivatives that help fix the price of commodities like corn, oil and wheat. It is the first wide-ranging federal government study focused on the specific impacts of climate change on Wall Street.

Perhaps most notable is that it is being published at all. The Trump administration has suppressed, altered or watered down government science around climate change as it pushes an aggressive agenda of environmental deregulation that it hopes will spur economic growth.

The new report asserts that doing nothing to avert climate change will do the opposite.

If People Grasped the Full Cost of Cars, They Might Make Greener Choices

“If more consumers understood the total costs of car ownership it could promote a shift to cleaner, lower-emission alternatives, according to a new paper co-authored by an economist at the Yale School of Forestry & Environmental Studies (F&ES).

In a survey of more than 6,000 consumers in Germany, researchers found that people underestimate the total cost of vehicle ownership by €221 ($240) per month on average. Although they correctly estimated their spending on fuel on average, they “severely” underestimated all other major expenditures, including depreciation, repairs, taxes, and insurance. The misjudgment amounts to 52 percent of the actual costs.

We discuss a set of potential solutions. For example, rather than having a label on new cars only showing the future fuel costs, the label could include the full expected monthly costs of ownership.
— Kenneth Gillingham
If these consumers were aware of the true costs, the researchers then calculate, it could reduce the number of cars in Germany by as much as 17.6 million, or 37 percent.

“If people underestimate how much it costs to own a car, they are more likely to own cars, rather than use other, cleaner, modes of transportation,” says Kenneth Gillingham, an associate professor of environmental and energy economics at F&ES and corresponding author of the paper. “And because repair costs are higher for conventional gasoline-powered cars, the underestimation could affect the uptake of electric vehicles as well.”

The researchers suggest that these miscalculations can be used as leverage in creating new policies that promote cleaner transportation choices — for instance, car sharing, alternative-fuel vehicles, public transport, biking or walking.”

Source: If People Grasped the Full Cost of Cars, They Might Make Greener Choices

Opinion | To Survive Disaster, Plan for the Worst – By Tina Rosenberg – The New York Times

By 

Ms. Rosenberg is a co-founder of the Solutions Journalism Network, which supports rigorous reporting about responses to social problems.

Credit…Rehman Asad/Agence France-Presse — Getty Images

“Disaster relief works like this: There is a flood, a drought, an earthquake, a famine, an exodus of refugees. Reporters swarm in, broadcasting images of suffering. Humanitarian workers on the ground analyze who needs what relief and draw up plans. The government asks for help. The United Nations coordinates international pledges. Relief comes in — money, bags of grain, medical supplies.

But by that point, weeks or months have gone by.

Rarely is there preplanning, pre-fundraising, or pre-agreement on a plan. “This is medieval,” said Stefan Dercon, a professor of economic policy at Oxford and a former chief economist of Britain’s bilateral aid agency, the Department for International Development. He and Daniel Clarke, head of the London-based Center for Disaster Protection, wrote the book “Dull Disasters? How Planning Ahead Will Make a Difference.”

“It is as if financial instruments such as insurance do not exist,” they wrote. “This is begging-bowl financing at its worst.”

But here’s what can happen instead — what, in fact, did happen in the Kurigram district of northwest Bangladesh in July. With colossal rains predicted, the United Nations World Food Program and the Bangladesh government identified about 5,000 particularly vulnerable families. Three days before the flood hit, they used mobile phone banking to send each family the equivalent of $53. With that money, the families secured their houses and belongings — for example, buying materials to lift their furniture off the ground. And they could pay the costs of taking their livestock and fleeing.”

Opinion | Want to Do Something About Climate Change? Follow the Money – By Lennox Yearwood Jr. and Bill McKibben – The New York Times

By Lennox Yearwood Jr. and 

“WASHINGTON — If you asked us why a dozen people sat on the floor next to the A.T.M. in a Chase Bank branch on Friday, waiting for the police to arrest us for this small act of civil disobedience, we would come up with the same answer as the famous robber Willie Sutton: “Because that’s where the money is.”

We don’t want to empty the vaults. Instead, we want people to understand that the money inside the vaults of banks like Chase is driving the climate crisis. Cutting off that flow of cash may be the single quickest step we can take to rein in the fossil fuel industry and slow the rapid warming of the earth.

JPMorgan Chase isn’t the only offender, but it is among the worst. In the last three years, according to data compiled in a recently released “fossil fuel finance report card” by a group of environmental organizations, JPMorgan Chase lent over $195 billion to gas and oil companies.

For comparison, Wells Fargo lent over $151 billion, Citibank lent over $129 billion and Bank of America lent over $106 billion. Since the Paris climate accord, which 195 countries agreed to in 2015, JPMorgan Chase has been the world’s largest investor in fossil fuels by a 29 percent margin.”

In Crucial Pennsylvania, Democrats Worry a Fracking Ban Could Sink Them – The New York Times

By Lisa Friedman and 

Ms. Friedman and Mr. Goldmacher traveled Western Pennsylvania together with The Daily, the Times podcast, to grapple with the fracking economy.

PITTSBURGH — Though they are both Democrats, John Fetterman, Pennsylvania’s lieutenant governor, and Bill Peduto, this city’s mayor, have their differences on the environment.

Mr. Fetterman, who toppled an incumbent Democrat in 2018 from the left, nevertheless calls Pennsylvania “the Saudi Arabia of natural gas” and sees extracting and taxing gas as critical to the state’s economy and the “union way of life.” Mr. Peduto lobbied unsuccessfully against a local petrochemical plant and is steering his once-struggling steel town to be independent of fossil fuels within 15 years.

But they agree on one thing: a pledge to ban all hydraulic fracturing, better known as fracking, could jeopardize any presidential candidate’s chances of winning this most critical of battleground states — and thus the presidency itself. So as Senators Bernie Sanders and Elizabeth Warren woo young environmental voters with a national fracking ban, these two Democrats are uneasy.

“In Pennsylvania, you’re talking hundreds of thousands of related jobs that would be — they would be unemployed overnight,” said Mr. Fetterman, who endorsed Mr. Sanders in 2016 before Donald J. Trump won his state, pop. 12.8 million, by just over 44,000 votes. “Pennsylvania is a margin play,” he added. “And an outright ban on fracking isn’t a margin play.”

BlackRock C.E.O. Larry Fink: Climate Crisis Will Reshape Finance – By Andrew Ross Sorkin – The New York Times

“Laurence D. Fink, the founder and chief executive of BlackRock, announced Tuesday that his firm would make investment decisions with environmental sustainability as a core goal.

BlackRock is the world’s largest asset manager with nearly $7 trillion in investments, and this move will fundamentally shift its investing policy — and could reshape how corporate America does business and put pressure on other large money managers to follow suit.

Mr. Fink’s annual letter to the chief executives of the world’s largest companies is closely watched, and in the 2020 edition he said BlackRock would begin to exit certain investments that “present a high sustainability-related risk,” such as those in coal producers. His intent is to encourage every company, not just energy firms, to rethink their carbon footprints.

“Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance,” Mr. Fink wrote in the letter, which was obtained by The New York Times. “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.” “

David Lindsay Jr.
Hamden, CT | NYT Comment:

An open letter to the NYT. This piece about Blackrock moving sustainability to central to its investing decisions is significant and exciting, but I would like the Times to do a major story on whether or not those investors with stock in fossil fuel companies such as Exxon Mobil should divest or remain as shareholders, if they want such companies to change direction and move rapidly away from fossil fuel extraction.

Many of my environmental friends think divestment is the only solution. I do not. I feel like environmentalists have more influence as an insiders and complainers and voters for change. I would love to hear what famous economists and financial experts think on this difficult subject.

Sincerely,
David Lindsay
Hamden CT.

Editorial | The World Solved the Ozone Problem. It Can Solve Climate Change. – The New York Times

By 

The editorial board is a group of opinion journalists whose views are informed by expertise, research, debate and certain longstanding values. It is separate from the newsroom.

“Nearly 50 years ago, three chemists named Mario Molina, Sherwood Rowland and Paul Crutzen found evidence that chlorofluorocarbons, chemicals known as CFCs and released from aerosol sprays, were weakening the ozone layer that functions as the earth’s natural sunscreen protecting humans, animals and plants from harmful radiation.

The discovery made big news and rattled the public. Aerosol sales dropped dramatically, and, despite pushback from the chemical companies that made CFCs, Congress in 1977 added protecting the ozone layer to the Environmental Protection Agency’s duties under the Clean Air Act. Not long afterward, the agency determined that the compounds, then widely used in refrigerators, air-conditioners and some industrial processes, posed an even graver threat to the atmosphere than first thought. Soon after, pressure began to build for a phaseout of CFCs in the United States as well as for an international treaty to find alternatives.

The case for global action became ever more urgent in 1985 when a British team discovered a hole in the ozone layer above Antarctica, followed by confirmation by NASA scientists of a connection between the hole and CFCs. With the rest of the world and even industry on board, the result was the 1987 Montreal Protocol, a landmark agreement banning chlorofluorocarbons and other ozone-depleting chemicals. End of story? Not quite. As it happened, the ozone-friendly replacements for the CFCs, known as hydrofluorocarbons, turned out to be distinctly unfriendly to the climate. So in 2016, the Montreal signatories reconvened in Kigali, Rwanda, and agreed to amend the original protocol to phase out HFCs and find substitutes more friendly to the atmosphere.

The bottom line is that the world, confronted with two dire threats to the earth’s fragile atmosphere, found two planetary responses with positive outcomes. The ozone layer is healing. That’s worth remembering as we struggle, often despairingly, to find common ground in the battle against climate change. Compared with the manifold complexities of global warming, dealing with ozone depletion was, in fact, relatively simple. But the key point is that it happened, and it’s worth asking why the world has not responded with similar resolve in dealing with the main global warming gases like carbon dioxide, about which we have known a lot for a long time.”

Opinion | Why Walmart and Other Companies Are Sticking With the Paris Climate Deal – By Kathleen McLaughlin and Andrew Steer – The New York Times

By Kathleen McLaughlin and 

Ms. McLaughlin is an executive vice president of Walmart. Mr. Steer is president of the World Resources Institute.

Credit…Nicholas Kamm/Agence France-Presse — Getty Images

“The Trump administration’s announcement this week that it would follow through with its plan to officially withdraw the United States from the Paris Agreement is deeply unfortunate. Leaving the accord will hamper America’s economic competitiveness and put Americans and people around the world at greater risk for climate-related disasters.

That’s why Walmart is one of over 3,800 American businesses, states, cities and other entities that have joined together in the coalition We Are Still In to continue our efforts to reduce greenhouse gas emissions to meet the goals of the Paris Agreement. Together, these entities represent nearly 70 percent of the country’s gross domestic product and two-thirds of its population. If this group were a country, it would be the world’s second-largest economy — behind the United States but ahead of China.

Why is the Paris Agreement so important? Climate change is a global challenge that requires a global response. Although the commitments are voluntary, the agreement sets a clear course toward a low-carbon future, with nearly 200 countries working together and playing by the same rules. The Paris Agreement provides the context for national and global policies in areas like agriculture and energy, which have direct implications for businesses with customers and suppliers around the world.

A decade ago, many people viewed climate action and economic growth as being in conflict. Now it’s clear that long-term growth and climate action are inextricably linked. For example, a report by the Global Commission on the Economy and Climate found that bold action on protecting the climate could generate over $26 trillion in benefits through 2030.”

Opinion | Climate Change Will Cost Us Even More Than We Think – By Naomi Oreskes and Nicholas Stern – The New York Times

By Naomi Oreskes and 

Dr. Oreskes is a professor of the history of science at Harvard. Professor Stern is chair of the Grantham Research Institute on Climate Change and the Environment.

CreditMike McQuade

“For some time now it has been clear that the effects of climate change are appearing faster than scientists anticipated. Now it turns out that there is another form of underestimation as bad or worse than the scientific one: the underestimating by economists of the costs.

The result of this failure by economists is that world leaders understand neither the magnitude of the risks to lives and livelihoods, nor the urgency of action. How and why this has occurred is explained in a recent report by scientists and economists at the London School of Economics and Political Science, the Potsdam Institute for Climate Impact Research and the Earth Institute at Columbia University.

One reason is obvious: Since climate scientists have been underestimating the rate of climate change and the severity of its effects, then economists will necessarily underestimate their costs.

But it’s worse than that. A set of assumptions and practices in economics has led economists both to underestimate the economic impact of many climate risks and to miss some of them entirely. That is a problem because, as the report notes, these “missing risks” could have “drastic and potentially catastrophic impacts on citizens, communities and companies.”

Opinion | Climate Change Will Cost Us Even More Than We Think – y Naomi Oreskes and Nicholas Stern -The New York Times

By Naomi Oreskes and 

Dr. Oreskes is a professor of the history of science at Harvard. Professor Stern is chair of the Grantham Research Institute on Climate Change and the Environment.

CreditMike McQuade

“For some time now it has been clear that the effects of climate change are appearing faster than scientists anticipated. Now it turns out that there is another form of underestimation as bad or worse than the scientific one: the underestimating by economists of the costs.

The result of this failure by economists is that world leaders understand neither the magnitude of the risks to lives and livelihoods, nor the urgency of action. How and why this has occurred is explained in a recent report by scientists and economists at the London School of Economics and Political Science, the Potsdam Institute for Climate Impact Research and the Earth Institute at Columbia University.

One reason is obvious: Since climate scientists have been underestimating the rate of climate change and the severity of its effects, then economists will necessarily underestimate their costs.

But it’s worse than that. A set of assumptions and practices in economics has led economists both to underestimate the economic impact of many climate risks and to miss some of them entirely. That is a problem because, as the report notes, these “missing risks” could have “drastic and potentially catastrophic impacts on citizens, communities and companies.”