News of Concern

Let’s start with the latest science which, fittingly for the holidays, comes from the Earth’s pole – albeit the Southern one.

A highly-regarded international research team announced this month that a cracking Antarctic ice shelf could disintegrate within 3-5 years, starting a chain reaction that would drop a glacier the size of Florida into the Southern Ocean and elevate sea levels as many as two to 10 feet. The increase will happen slowly, beginning in the next decade and accelerating over centuries, but it is a visible reminder we are setting something into motion that we can’t pull back and will change the contours of our coastlines forever.

What would 10 feet of sea level rise mean for the U.S.? Previous surveys have calculated that it would swamp more than 28 thousand square miles of land that is home to over 12 million Americans, including large parts of New York, New Orleans, Miami, Boston, and dozens of other major cities.

Rising sea levels, even at smaller levels, will create a very different world for our children and grandchildren. Climate Central’s ‘Picturing Our Future’ interactive graphics show projected sea level rise in iconic places like the Lincoln Memorial and the Sydney Opera House, demonstrating the likely outcomes if we stay on our current emissions trajectory to a 3℃ increase (5.4℉) by the end of this century or pivot to meet international goals of limiting the rise to 1.5℃ (2.7℉). The differences are stark, underscoring how every degree of increase matters.

The devastation would ripple far beyond the sunken acreage. For the first time, the annual report of the Financial Stability Oversight Council warned that climate change is an ’emerging threat’ to the U.S. financial system [paywall]. It spells out how the growing frequencies of fires, floods, and hurricanes will cascade through the entire economy, threatening the welfare of us all. And The Wall Street Journal became just the latest business-focused entity to warn of trillions of dollarsof stranded assets [paywall] due to rising tides of all kinds – elevated sea levels, to be sure, but also growing demands from investors, insurers, consumers, employees, and regulators for urgent action (see more below).

The drip, drip, drip of melting ice and bad news goes on. Another new study projects that mountainous U.S. states may be nearly snowless for multi-year stretches [paywall] after mid-century if warming doesn’t slow. The resulting loss of snowpack will profoundly disrupt the water supply of much of the American West. Despite all this – and despite all the net-zero pledges we told you about last month – the coal industry is set to experience record highs in 2022, according to the authoritative International Energy Agency. Coal, of course, is one of the dirtiest and most carbon intensive fossil fuels in our energy portfolio.

And, at the risk of overplaying the holiday theme, we’re dropping that coal right into the Christmas stockings of the younger generation – in more ways than one. Yet another new study concludes that children born today are statistically likely to experience seven times more extreme weather events [paywall] than their grandparents.

News of Hope

First, let’s pause to applaud the return of the United States to a leadership role [paywall] on climate. After years of backtracking, Washington is now committing significant financial resources and real diplomatic muscle to get out in front of global warming.

Of note, a delegation of Republicans was active at the climate summit this year. Led by Reps. John Curtis (R-UT) and Garret Graves (R-LA), the group sought to demonstrate conservative leadership to the global community and address Republican and independent voters who favor climate action.

The turnaround began reaping benefits immediately. Most dramatically, the U.S. and China announced a surprise agreement in Glasgow to boost their climate cooperation. The joint pledge by the world’s top two greenhouse gas polluters to take ‘concrete actions’ on emissions was hailed as a highpoint of the two-week conference.

There were other governmental commitments to cheer, as well. 110 nations signed on to a global methane pledge, promising to cut methane emissions by 30% by the end of this decade. (Methane is a greenhouse gas that is 84 times more potent than carbon.) Also by 2030, another 130 countries agreed to end or reverse deforestation.

But the real game changer may well have come from the corporate sector [paywall]. A proof point is the mobilization of $130 trillion in private capital, announced at Glasgow, to accelerate the global transition to a zero emissions economy. Those are the collective assets of the Glasgow Financial Alliance for Net-Zero, a coalition of 450 financial institutions from 45 countries, and they come close to matching the estimated $150 trillion price tag for decarbonizing the world.

Two other Glasgow “game changers” were the announcement of the new International Sustainability Standards Board, which will publish mandatory climate reporting standards by the end of 2022 and provide investors with greater transparency and encourage higher levels of investment, and the long-awaited adoption of rules for a new global carbon market. Some six years in the making, the initiative establishes a framework for how companies and countries can trade carbon emission credits across borders.

News of Hope

Despite all the obstacles – including a fair dose of skepticism – it’s hard not to applaud other developments in the climate space. First, let’s pause to praise some surprising new voices in the climate awareness choir. The United Arab Emirates and Saudi Arabia – two major oil exporting nations – have declared net-zero intentions by 2050 and 2060, respectively. And we hear that even natural gas producer Russia is considering a net-zero announcement at the Glasgow summit. By putting their countries’ long-term future ahead of their current income streams, these fossil fuel giants seem to be accepting the need to transition to renewable energy sources.

Few new choristers are more surprising, however, than Report Murdoch’s News Corp, a longstanding megaphone for those intent on downplaying the  risks of global warming. The corporate owner of Fox News and The Wall Street Journal has made a U-turn in its Australian publications, unveiling a comprehensive climate change campaign called ‘missionzero2050.’ It embraces the need to put “Australia on a path to a net-zero future.” Yet another sign of the times.

Back on home turf – or actually, just off shore – we’re also encouraged to see that the U.S. government is moving fast to scale up wind production. Following the big Martha’s Vineyard project we told you had been greenlighted a few months ago, the administration has now announced plans to open up almost the entire national coastline for commercial wind farm leases [paywall]. It’s a big deal: massive wind and solar deployment is America’s best bet with current technology to slash carbon emissions.

Innovation, of course, never stands still, and we are equally excited to see a surge of future-oriented projects taking flight. Some, quite literally. Examples are too numerous to list in this short newsletter, but here’s a sampling of just a few standouts that caught our eyes in October:

• A U.S. Air Force project to make jet fuel out of thin air
• Porsche tests low-carbon fuels in its race cars
• Most concrete produces pollution. This concrete is made of it
• Big Ag pays farmers for carbon mitigation
• The next best electric car battery may be here [paywall]
• An iron battery breakthrough could eat lithium’s lunch
• Electric car prices approach a milestone for affordability
• Cities start to electrify mass transit [paywall]

News of Hope

Clearly, there’s much that keeps us up at night. And yet, many key countries are moving faster and better to get a grip on the climate crisis in the runup to the next UN Climate Conference (COP26) that opens on October 31. While Australia seemingly wants to put its head in the sand regarding coal, this month China made a major announcement to stop funding coal plants around the world.

And as if vying to take the lead after years of American reluctance to act, President Biden announced that the White House will work with Congress to double the administration’s climate finance commitments to $11.4 billion by 2024. Equally important, he asserted that this will enable developed countries to keep a key commitment to the world’s poorer nations to mobilize $100 billion a year to support climate action in the developing world. The failure of developed nations to honor that pledge has been seen as a potential stumbling block for COP26.

More applause is warranted for the recent joint pledge by the U.S. and the European Union to slash emissions of methane – one of the world’s most potent greenhouse gases – by 30% over the next 10 years. Seven other countries have signed on, promising an important collective initiative to dial back the source of about a quarter of global warming to date.

On the domestic front, the Environmental Protection Agency issued a new rule to cut the use of  hydrofluorocarbons – a class of greenhouse gases that are hundreds to thousands of times more powerful than carbon dioxide and widely used in home refrigerators, air conditioners, and supermarket freezers. The bi-partisan support behind the plan to slash these super-pollutants is viewed as a major achievement.

Also this month, the Biden Administration announced that it will take immediate steps to protect Americans from extreme heat in the wake of a summer of lethal heat waves that killed hundreds of people around the country. Heat is the nation’s leading cause of weather-related deaths and the new initiative will involve multiple agencies.

Finally, we’re intrigued by news that the knowledge and technology behind the controversial practice of fracking (hydraulic fracturing) may power a shift to clean energy for oil companies and their workers.

News of Hope

Against all the bad news in July and August, the hopeful steps towards climate solutions that we want to highlight may look small – even, in some cases, like double-edged swords.

Take Congress. We’re very encouraged to see two bills have passed the U.S. Senate with important climate initiatives intact. The bi-partisan infrastructure bill [paywall] includes about $130 billion for climate initiatives including ‘climate resilience,’ renewable energy, public transit and the largest ever federal expenditure on electric car recharging stations. A few weeks previously, the Senate overwhelmingly passed the “Growing Climate Solutions Act” to help farmers make money by selling carbon credits. It was a rare upswell in bipartisan cooperation around a climate solution proposal. We’re hoping these examples of bipartisanship in support of climate action will endure and expand in future legislation.

In response to the climate urgency, California regulators are once again in proactive mode – taking steps to alter state building codes [paywall] to require solar power and battery storage in new commercial construction and some large residential projects.

The move is one of many indicators that the economics around energy and climate are changing rapidly – even faster than many business leaders have anticipated. Another sign is in a recent S&P Global Market Intelligence report that the value of fossil fuels is declining as renewable energy deployment accelerates – and concludes some $68 billion in coal and natural gas investment may have to be written off as stranded assets.

Although we don’t relish the prospect of investors and shareholders losing money, we do applaud forewarning – and the drumbeat of evidence that smart money will be pursuing clean energy investments across economic sectors. We note with pleasure that the market for hybrid cars is booming – boding well for electric vehicles – and even lawn care operations in politically conservative areas are shunning gas in favor of electric power.

And if you don’t think that’s innovative enough, we leave you with this: researchers in Oregon are working to make marine algae (aka seaweed) the food source of the future. It absorbs carbon, it grows easily, and it’s nutritious. According to the ‘aquaculturists’ behind the idea, it even tastes like bacon when it’s smoked and fried.

News of Hope

The aforementioned face-off notwithstanding, the big news in partisan politics in June was the tiny crack in the polarization around climate change. Nearly one-third of congressional Republicans just launched the Conservative Climate Caucus, and others are readying to unveil climate policies of their own.
 
And in boardrooms and shareholder meetings, more and more of America’s investor heavyweights are pushing the climate agenda. “Wall Street senses a new climate [no pun seemingly intended] and is positioning itself accordingly,” writes Tim Quinson in Bloomberg. Hurrah! Black Rock and Vanguard, for example, are vocally happy to back shareholder initiatives to disrupt the status quo at companies like Exxon and beyond, though we observe a robust dose of risk analysis at play in their calculations, also.
 
June saw several disruptive legal and policy initiatives at the national and state levels. Let’s start with Belgium. In a landmark ruling, a Brussels court has declared the country’s failure to meet its climate targets breached the European Convention on Human Rights. It’s the latest legal victory against governments that have broken climate promises and could have international implications.
 
In more news from Brussels, the 27-nation European Union is reportedly preparing to impose levies on imported goods with high levels of “embedded” carbon such as steel, cement, and aluminum. The idea is to penalize countries with lower standards for carbon reduction as the EU tightens its own environmental rules and shoots for climate neutrality by 2050.
 
Closer to home, the state of California’s insurance regulator is endorsing sweeping changes to discourage new house construction in fire-prone areas [paywall]. The proposed changes are a bit wonky but important, with potential for disrupting the state’s real estate market and becoming a model for other states where climate change is making home insurance a lynchpin issue.

Finally, we’ll leave you with this: “ecocide” has been defined by a panel of 12 legal scholars from around the world as a new, international crime with intended equivalence to genocide. Although the declaration carries no legal weight at this point, it envisions prosecutions before the International Criminal Court in the Hague and is considered an important milestone in the campaign to prosecute individuals and companies responsible for severe and widespread or long-term environmental damage, such as extensive deforestation of the rainforest or the Chernolyl nuclear accident.