This month, we’d like to focus on the power of compounding. We all know what it means for our savings or investment accounts: money set aside grows exponentially with time as it earns interest.
Compounding is also a powerful force in climate change – and not usually for good. For example, as our climate warms, sections of frozen arctic tundra are thawing, and greenhouse gases are released from the soil. Those gases accumulate in the atmosphere, causing further warming, which melts more permafrost, which releases more gases, and so on. It’s called a “feedback loop.” A little change at the start of the cycle produces outsized results down the road, risking a “tipping point” of no return.
February delivered further insights into the pace and implications of such compounded climate effects. More on that below. But last month also kicked up a range of developments that made us focus on the positive power of compounding in the climate fight, too – particularly on the social side. We humans also have “tipping points,” junctures when the accumulation of incremental change – in opinions, in innovation, in policy – suddenly delivers outsized results. And things that seemed impossible yesterday seem assured today.
C-Change Conversations is optimistic that climate logic is reaching one of those tipping points. Momentum is compounding everywhere – from our churches and electoral politics to our garden clubs, military, and businesses. What once seemed radical, now seems like common sense.
We hope you agree and will help us keep the conversation going about climate. It is a compounded interest we all share! And please forward this newsletter and be in touch with questions and comments.
The C-Change Conversations Team
A bit more on the notion that when it comes to climate, what once seemed radical, now seems like common sense. It is now common sense, for example, for businesses to plan for climate change because the risks are so great and the opportunities are so lucrative.
“Before Climate Change it was about doing the right thing. Now it’s just about business.”
From McKinsey Themes, a publication of McKinsey & Company
News Of Concern
Climate risks threaten much more than investor returns, so let’s look at this month’s developments that should keep the business community (and the rest of us) up at night.
For starters, we were reminded that permafrost isn’t the only compounding phenomenon to worry about. Research published in February identified 26 accelerators to global warming, or “amplifying feedback loops,” that aren’t being properly included in climate models and may exacerbate the challenges we face.
Melting sea ice is one of them. Ice (and snow) reflect solar radiation back into space. So as Earth’s ice caps melt, the planet loses some of its reflective capability and negative effects begin compounding. It’s a cosmic reason why new measurements showing record low levels of sea ice covering the Antarctic are so disturbing. A tipping point there could have catastrophic repercussions, destroying the local ecosystem and exposing the Antarctic ice shelves, which is the largest potential contributor to sea level rise in the future. (See video below.)
America’s continental interior is also facing compounded risk, scientists reported this month. Remember the climate-induced megadrought gripping much of the West that we’ve told you about before? That plus overconsumption is depleting major waterways and reservoirs – and is drying up Utah’s Great Salt Lake. The exposed lakebed harbors dangerous elements like mercury and arsenic that are easily windborn. A “Great Toxic Dustbowl” is brewing that could poison millions of local people.
Another cascading effect of global warming: deadly fungal infections. It seems that fungi typically have not thrived on human hosts who have average body temperatures of 98.6 degrees. That’s all changing as the organisms evolve to hotter climates. Some 7,000 Americans died of fungal infections in 2021, up from a few hundred annually in the 1970s.
And as we’ve reported before, natural disasters are getting more expensive and more frequent, with some areas getting compounding disasters – such as a forest fire that is followed by extreme floods and then mudslides. No wonder more Americans are being displaced by weather. The Census Bureau reports that some 3.4 million adults in the U.S. – 1.4% of the adult population – were displaced from their homes by weather disasters last year. That’s over four times the number of people estimated by the International Displacement Monitoring Center to have been displaced annually for the previous 13 years.
And there is another type of tipping point where the risk is compounding: financial tipping points, as climate change endangers our top economic regions across the world. According to new data from a climate risk specialist, Florida joins 16 Chinese provinces as the most climate vulnerable places on earth. The Sunshine State was ranked tenth most vulnerable with 18 other U.S. states in the top 100.
News Of Hope
So, what’s a state to do? A new modeling tool has some very specific, very tailored – and possibly very surprising answers, according to Forbes Magazine. The tool models various combinations of five “powerhouse policies” that will enable each state in the nation to bolster its economy while slashing emissions. The five policies aren’t secrets; they include clean electricity, zero-emission vehicles, and clean buildings. What is new is the compounded impact of innovation and incentives that have combined to afford big climate impacts with strong economic payoffs all across the country.
It’s no wonder, Forbes says, that many states want to follow leaders like Montana into a green future. It is a wonder, says Bloomberg News, that deep red Midwestern states like Indiana and Ohio – long dependent on coal for jobs and power – are suddenly part of the stampede. Bloomberg cites the same economic and policy incentives to explain a burgeoning “solar-farm boom so staggering” that the two states are now on track to trail only California and Texas for solar energy production by 2027.
It shouldn’t be a surprise Ohio and Indiana are moving forward, because it is smart for their economies. Because of these new economic realities, old political antagonisms are losing relevance. In fact, compounding pressures in the political sphere have been gaining momentum as prominent Republicans, such as the newest presidential candidate Nikki Haley, recognize that man-made climate change is real, and it’s imperative to take action.
Battery-powered cars weren’t expected to be cost-competitive for consumers for several years. But thanks to market forces, incentives, and the dropping cost of raw materials, electric vehicles, which are already cheaper to fuel and maintain, may have many more models that hit price-parity with gas-fueled cars this year.
EVs are just one factor driving another remarkable phenomenon: America’s gas consumption is falling significantly and is not expected to rebound. In fact, it’s falling so much that one S&P analyst has declared, “The heyday of gasoline is over.”
And then there are heat pumps. Powered by low-emission electricity, heat pumps are the cleanest choice for cooling and heating homes, and their popularity has been on the rise worldwide. The Chinese and European markets are particularly robust but the U.S. consumer is leaning in, too. Remarkably, more heat pumps were sold in America last year than standard furnaces, marking a surprising milestone. Given the slope of the respective curves, we’re hopeful that their popularity will continue to compound and help decarbonize the American household.
Let The Numbers Speak
Scientists say the Antarctic ice is melting much faster than anticipated. Ice shelves the size of England, France, and Texas could unleash vast amounts of water into the oceans, leading to rising sea levels and changing ocean patterns. Take a look at this video to see what they are learning, and experience both the beauty and the drama unfolding on this vast continent at the bottom of the world.