The chickens are coming home to roost.
Even before the western United States became a regional inferno, even before the Midwest U.S. became a summertime flood zone, even before an annual hurricane season so bad that the government is running out of names to attach to them, even before Colorado saw a 100 degrees Fahrenheit heatwave swan dive into a 12-inch snowstorm within 48 hours.
Even before all that, we’d been watching the real-world risks of climate change looming and growing across the United States and around the world. And the costs, financially and otherwise, are quickly becoming untenable.
Lately, a steady march of searing heat, ruinous floods, horrific wildfires, unbreathable air, devastating hurricanes and other climate-related calamities has been traversing our screens and wreaking havoc to national and local budgets. And we’re only at 1C of increased global temperature rise. Just imagine what 2C or 3C or 4C will look like, and how much it will cost.
We may not have to wait terribly long to find out.
It’s natural to follow the people affected by all this: the local residents, usually in poorer neighborhoods, whose homes and livelihoods are being lost; the farmers and ranchers whose crops and livestock are withering and dying; the stranded travelers and the evacuees seeking shelter amid the chaos. And, of course the heroic responders to all these events, not to mention an entire generation of youth who fear their future is being stolen before their eyes, marching in the streets. So many people and stories.
But lately, I’ve been following the money.
The financial climate, it seems, has been as unforgiving as the atmospheric one. Some of it has been masked by the pandemic and ensuing recession, but for those paying attention, the indicators are hiding in plain sight. And what we’re seeing now are merely the opening acts of what could be a long-running global financial drama. The economic impact on companies is, to date, uncertain and likely incalculable.
The financial climate, it seems, has been as unforgiving as the atmospheric one.
Last week, a subcommittee of the U.S. Commodity Futures Trading Commission (CFTC) issued a report addressing climate risks to the U.S. financial system. That it did so is, in itself, remarkable, given the political climes.
But the report didn’t pussyfoot around the issues: “Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy,” it stated, adding:
Climate change is already impacting or is anticipated to impact nearly every facet of the economy, including infrastructure, agriculture, residential and commercial property, as well as human health and labor productivity. Over time, if significant action is not taken to check rising global average temperatures, climate change impacts could impair the productive capacity of the economy and undermine its ability to generate employment, income and opportunity.
Among the “complex risks for the U.S. financial system,” the authors said, are “disorderly price adjustments in various asset classes, with possible spillovers into different parts of the financial system, as well as potential disruption of the proper functioning of financial markets.”
In other words: We’re heading into uncharted economic territory.
Climate change, said the report’s authors, is expected to affect “multiple sectors, geographies and assets in the United States, sometimes simultaneously and within a relatively short timeframe.” Those impacts could “disrupt multiple parts of the financial system simultaneously.” For example: “A sudden revision of market perceptions about climate risk could lead to a disorderly repricing of assets, which could in turn have cascading effects on portfolios and balance sheets and therefore systemic implications for financial stability.”
And then there are “sub-systemic” shocks, more localized climate-related impacts that “can undermine the financial health of community banks, agricultural banks or local insurance markets, leaving small businesses, farmers and households without access to critical financial services.” This, said the authors, is particularly damaging in areas that already are underserved by the financial system, which includes low-to-moderate income communities and historically marginalized communities.
As always, those least able to least afford the impacts may get hit the hardest.
This was hardly the first expression of concern about the potentially devastating economic impacts of climate change on companies, markets, nations and the global economy. For example:
- Two years ago, the Fourth National Climate Assessment noted that continued warming “is expected to cause substantial net damage to the U.S. economy throughout this century, especially in the absence of increased adaptation efforts.” It placed the price tag at up to 10.5 percent of GDP by 2100.
- Last month, scientists at the Potsdam Institute for Climate Impact Research said that while previous research suggested that a 1C hotter year reduces economic output by about 1 percent, “the new analysis points to output losses of up to three times that much in warm regions.”
- Another report last month, by the Environmental Defense Fund, detailed how the financial impacts of fires, tropical storms, floods, droughts and crop freezes have quadrupled since 1980. “Researchers are only now beginning to anticipate the indirect impacts in the form of lower asset values, weakened future economic growth and uncertainty-induced instability in financial markets,” it said.
And if you really want a sleepless night or two, read this story about “The Biblical Flood That Will Drown California,” published recently in Mother Jones magazine. Even if you don’t have a home, business or operations in the Golden State, your suppliers and customers likely do, not to mention the provenance of the food on your dinner plate.
Down to business
The CTFC report did not overlook the role of companies in all this. It noted that “disclosure by corporations of information on material, climate-related financial risks is an essential building block to ensure that climate risks are measured and managed effectively,” enabling enables financial regulators and market participants to better understand climate change’s impacts on financial markets and institutions.
However, it warned, “The existing disclosure regime has not resulted in disclosures of a scope, breadth and quality to be sufficiently useful to market participants and regulators.”
An analysis by the Task Force on Climate-related Financial Disclosure found that large companies are increasingly disclosing some climate-related information, but significant variations remain in the information disclosed by each company, making it difficult for investors and others to fully understand exposure and manage climate risks.
The macroeconomic forecasts, however gloomy, likely seem academic inside boardrooms. And while that may be myopic — after all, the nature of the economy could begin to shift dramatically before the current decade is out, roiling customers and markets — it likely has little to do with profits and productivity over the short time frames within which most companies operate. Nonetheless, companies with a slightly longer view already are considering the viability of their products and services in a warming world.
Consider the recommendations of the aforementioned CFTC report, of which there are 20. Among them:
- “The United States should establish a price on carbon.”
- “All relevant federal financial regulatory agencies should incorporate climate-related risks into their mandates and develop a strategy for integrating these risks in their work.”
- “Regulators should require listed companies to disclose Scope 1 and 2 emissions. As reliable transition risk metrics and consistent methodologies for Scope 3 emissions are developed, financial regulators should require their disclosure, to the extent they are material.”
- The Financial Stability Oversight Council “should incorporate climate-related financial risks into its existing oversight function, including its annual reports and other reporting to Congress.”
- “Financial supervisors should require bank and nonbank financial firms to address climate-related financial risks through their existing risk management frameworks in a way that is appropriately governed by corporate management.”
None of these things is likely to happen until there’s a new legislature and presidential administration in Washington, D.C., but history has shown that many of these can become de facto regulations if enough private-sector and nongovernmental players can adapt and pressure (or incentivize) companies to adopt and hew to the appropriate frameworks.
Finally, there is collaboration among the leading nongovernmental organizations focusing on sustainability reporting and accountability.
And there’s some news on that front: Last week, five NGOs whose frameworks, standards and platforms guide the majority of sustainability and integrated reporting, announced “a shared vision of what is needed for progress towards comprehensive corporate reporting — and the intent to work together to achieve it.”
CDP, the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council and the Sustainability Accounting Standards Board have co-published a shared vision of the elements necessary for more comprehensive corporate reporting, and a joint statement of intent to drive towards this goal. They say they will work collaboratively with one another and with the International Organization of Securities Commissions, the International Financial Reporting Standards Foundation, the European Commission and the World Economic Forum’s International Business Council.
Lots of names and acronyms in the above paragraph, but you get the idea: Finally, there is collaboration among the leading nongovernmental organizations focusing on sustainability reporting and accountability. To the extent they manage to harmonize their respective standards and frameworks, and should a future U.S. administration adopt those standards the way previous ones did the Generally Accepted Accounting Principles, we could see a rapid scale-up of corporate reporting on these matters.
Increased reporting won’t by itself mitigate the anticipated macroeconomic challenges, but to the extent it puts climate risks on an equal footing with other corporate risks — along with a meaningful price on carbon that will help companies attach dollar signs to those risks — it will help advance a decarbonized economy.
Slowly — much too slowly — but amid an unstable climate and economy we’ll take whatever progress we can get.
Volkswagen ID.4 vs. Toyota RAV4 — ID.4 Has Lower Cost of Ownership in Many Scenarios
The Volkswagen ID.4 is one of our 4 finalists for the 2021 CleanTechnica Car of the Year award. It’s a good all-around vehicle, not a bare-bones budget car, but one key thing I noted about the ID.4 as potential justification for winning your vote is that it’s cheaper than the other models on the list.
With that in mind, I thought it would be interesting to look at how low its cost of ownership might actually be, especially in comparison to one of the best selling vehicles in the US and worldwide, the Toyota RAV4.
The RAV4 had 47,078 sales in the US in March alone. It had 114,255 in the first quarter of 2021. This is a vehicle to beat, and one that the Volkswagen ID.4 actually matches up well against. They have almost identical width (73″) and length (181″ — ID.4, 181–182″ RAV4), and the RAV4 is just slightly taller (67–69″ vs. 64″). The ID.4 should offer a better driving experience but otherwise has pretty much the same type of comfort, tech, and style. Well, in my opinion, it looks much better.
So, what does a cost comparison look like?
Before I get into the results, it’s important to highlight that any comparison like this requires a dozen or so assumptions, and individual cases can certainly vary tremendously. So, take a look at the assumptions more closely on the bottom of the article, and feel free to copy the spreadsheet and input your own assumptions in order to use your story and your expectations as much as you can muster. I tried to come up with 1) a moderate scenario; 2) a “high-cost, high-mileage” scenario; and 3) a “low-cost, low-mileage” scenario for this article, but there are basically unlimited variations on the theme.
On to the results from my cost of ownership comparison! (Oh, also, note that I thought up the different assumptions for the 3 scenarios and put them in before looking at the results. I did not modify results to suit my expectations — my expectations were slim anyway since I thought the results could go either way — and just tried to use reasonable assumptions for a few very different lifestyles.)
In the scenario using moderate assumptions, the Volkswagen ID.4 undercut every RAV4 model I included. It even slipped in below the base price of the most bare-bones, basic version of the RAV4, the RAV4 LE. When you climb up the ladder — to trims that are actually more similar to the ID.4 — the gap gets truly notable. This first round of assumptions results in an $8,000 savings over 5 years if you buy an ID.4 instead of a RAV4 XSE Hybrid! (Yes, please.)
Looking at the next comparison, I ramped up the miles traveled, the cost of gasoline, and the cost of electricity. The result was actually similar, though, with the ID.4 still handily beating the competition.
It wasn’t until I got to a “low mileage, low range” scenario that the ID.4 snuggled in between the higher-cost RAV4 EVs and the lower cost RAV4 EVs. Still, even in this scenario that is more challenging for an EV like the ID.4, it is doing quite well with a lower cost than the RAV4 XLE Hybrid or RAV4 XSE Hybrid.
All scenarios include these assumptions: $3000 down payment, 4% interest over 5 year loan period for remaining cost, $7500 federal tax credit for ID.4, $800 5-year maintenance cost for ID.4 and $2430 5-year maintenance cost for RAV4 models; 30 MPG for RAV4 LE and 40 MPG for the three hybrid RAV4 options; 2.857 miles/kWh efficiency for ID.4; no assumption for resale value after 5 years — add in your own expectation on that.
* This scenario assumes 13,300 miles driven a year; $0.11/kWh average rate for charging (across all charging in all locations across all 5 years); $3/gallon average across 5 years.
** This scenario assumes 20,000 miles driven a year; $0.30/kWh average rate for charging (across all charging in all locations across all 5 years); $4/gallon average across 5 years.
*** This scenario assumes 10,000 miles driven a year; $0.07/kWh average rate for charging (across all charging in all locations across all 5 years); $2.20/gallon average across 5 years.
Sources: Toyota, Volkswagen, US Department of Energy (DOE) Office of Energy Efficiency & Renewable Energy and US Environmental Protection Agency (EPA), Edmunds (but with the RAV4’s 5 year maintenance cost cut in half)
Photos courtesy of Volkswagen
Chicago EJ Advocates Notch Win After EPA Flags Civil Rights Violations
Chicago Mayor Lori Lightfoot indefinitely delayed a permitting decision on the relocation of a highly polluting metal shredding and recycling facility after the U.S. EPA said doing so could violate the civil rights of Black and Latino people who live there. “Substantial data indicate the current conditions facing Chicago’s southeast side epitomize the problem of environmental injustice, resulting from more than a half-century of prior actions,” EPA administrator Michael Regan said. “This neighborhood currently ranks at the highest levels for many pollution indicators.”
Research Management Group, which acquired the General Iron facility in 2019, is seeking to relocate it from the white and wealthy North Side neighborhood of Lincoln Park to a predominantly Black and Latinx community on the Southeast Side already plagued by numerous polluting industries.
History of environmental racism
“When you take a company that has a terrible track record from a predominantly white and wealthy community to a community that is majority Latino and Black, then you’re sending a strong message that you value certain people over others,” Olga Bautista, a member of the Southeast Environmental Task Force, who organized against General Iron’s move to the Southeast Side, told WGN.
“Because of these well-known degraded environmental conditions, the siting of this facility in Chicago’s southeast side has raised significant civil rights concerns,” Regan said. “EPA believes the issues raised by the HUD complaint deserve your careful consideration as the City weighs its environmental permitting decision on the RMG facility.” The delay of the General Iron permit is a major victory for neighborhood and environmental justice groups that fought to protect Southeast Side communities from yet another source of industrial pollution — a campaign that included hunger strikes — but organizers said much more is needed.
“Until we have the right policies in Chicago, we are all getting ready, taking this moment to catch our breaths and getting ready to work with the city to stop any companies trying to move in that don’t have our health in mind,” Bautista said.
Originally published by Nexus Media.
Insular Areas Climate Change Act: Strengthen Territories’ Response to Climate Disasters & Protect the Most Vulnerable
Courtesy of Union Of Concerned Scientists
Islands and their people are more vulnerable to climate impacts than continental jurisdictions. They are more unprotected from climate ravages that are becoming more ferocious. Their vulnerability is related to climate change, but more directly to the effect of human decisions. For this reason it is urgent that their problems be addressed decisively and effectively, and that we do not skimp on resources or strategies to protect their lives and infrastructure.
Under a changing climate, islands are increasingly suffering from hurricanes or typhoons, and are hard-pressed to withstand the damage caused by the winds and storm surges that they bring with them. The amount of drinking water that islands receive in the form of rain is limited by what can be collected in their land base, and the reliability that rain will fall in similar amounts compared with previous years is reduced by global warming. Also, sea-level rise and coastal erosion threaten the wellbeing of people, their communities, and infrastructure. Island flora and fauna are more sensitive to changes in temperature, precipitation, and sea level because their ecosystems have evolved in an isolated way after the separation of the continental masses, and due to the fact that they are on islands, they cannot move to adjacent areas. Although islands are found in all latitudes, such as Australia, Indonesia, the Caribbean Sea and the Pacific Ocean, most are found in tropical latitudes near the equator, where the impact of extreme temperatures is also more marked.
For example, on the Majuro Atoll in the Marshall Islands, where about 30,000 people live, a rise in sea level of just 91 centimeters (about 3 feet) — predicted by science based on the global trajectory of emissions of coal — would permanently submerge the atoll. In 2017, Puerto Rico and the Virgin Islands were hit in sequence by hurricanes Irma and María, destroying everything in their path and leaving a trail of misery and death in territories with social, economic and energy infrastructure already in bad shape due to decades of mismanagement and colonialism.
In Guam, Samoa, and the Marianas, elevated ocean temperatures are causing algae that feed coral reefs to abandon them, leaving corals without food and in danger of dying. The way in which these conditions of destruction and risk are addressed will determine the future of their ecosystems and populations.
The proposed Insular Areas Climate Change Act seeks to address the climate crisis in US unincorporated island territories
In October 2020, the Committee on Natural Resources of the House of Representatives announced the creation of the Insular Areas Climate Change Act, a bill whose purpose is to reduce climate impacts in unincorporated island territories. Congressman Raúl Grijalva (D-AZ), Chairman of the Committee, reaffirmed the obligation that Congress has to take action to protect lives and wellbeing in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the US Virgin Islands. The bill draft, which is in a public comments process, seeks the creation of programs and government agencies focused on the planning, management and implementation of energy resources, scientific research, and the provision of economic resources for the insular unincorporated territories controlled by the US. It is a good starting point and shows congressional commitment to address the climate crisis in the territories.
However, the bill requires mechanisms that help to first, address the true causes of climate vulnerability in island territories; second, to integrate the local knowledge that insular frontline communities already possess and the climate crisis response work that they carry out in the territories; third, promote collaboration between civil society and government entities; and finally, to communicate with transparency in English as well as in Spanish the results of the reports created by the working groups that will implement the law. In particular, we offer the following recommendations to fill these gaps and achieve a bill that truly fulfills its goal of empowering island territories to tackle the climate crisis:
1) Incorporate more precise definitions that reflect both the climatic and political vulnerability of the island territories
The term “territories” includes the unincorporated territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the US Virgin Islands. The unincorporated territories “belong to, but are not part of” the United States, and in them the Constitution does not apply in its entirety (see the Insular Cases on Puerto Rico and the Philippines). This adds a new dimension of climate vulnerability to the territories since they do not have the same constitutional mechanisms that the 50 states of the Union enjoy to request or receive support from the federal government. The bill should refer to the island territories as unincorporated territories, recognize the lack of political power and governance in them, and promote the development of mechanisms that increase their capacity to respond to the climate crisis they face. The bill should codify that the governance and management of the climate crisis is not limited to collaboration between the federal and island governments, that is, that it must include sectors of civil society such as non-governmental and community-based organizations, as well as academics and scientists already embedded in community work, who have broad and deep local knowledge essential to the search for solutions.
2) Integrate local knowledge in formulating solutions
Local knowledge refers to the unique knowledge created by a particular culture or society, and consists of indigenous, traditional or folk knowledge or science. Local knowledge among island communities is instrumental for the production of food and shelter, as well as for regaining control over their lives and well-being following disasters. It is developed and transmitted from generation to generation as an adaptation mechanism in the face of socio-environmental and agroecological challenges. It thrives on cultural values, and is as essential to sustainable development as physical infrastructure and financial capital.
The Insular Areas Climate Change Act should incorporate local actors from the non-governmental sector, grassroots organizations, as well as academics and scientists inserted in community work, who have led the community recovery after recent climatic catastrophes in island territories. The participation of these sectors of civil society in the recovery process is essential to enable climate resilience beyond what federal or territorial government policies could achieve. In particular:
- The Insular Areas Climate Change Act Must integrate civil society as members and direct consultative bodies to the groups and programs proposed through the project.
- The study proposed as part of the Act’s comprehensive energy plan must identify energy vulnerability and how it is distributed among the different economic sectors as well as among the population.
- The proposed Act’s Climate Change Insular Research Grant Program should establish protocols that ensure equitable forms of community collaboration and the development of the working capacity of civil society and existing local networks to manage grants and other resources.
- The proposed Act’s Energy Star Rebate program should prioritize the inclusion of the most vulnerable groups, support existing local efforts in the territories, and prioritize the direct installation of renewable energy resources.
3) Strengthen the functioning of the Interagency Task Force
- The proposed Act’s Interagency Task Force must integrate local actors from local government as well as members of non-governmental and other civil society groups, community leaders, grassroots organizations, and academics and scientists who are currently embedded in community work.
- The tasks to be carried out by the Interagency Task Force should be clearly specified to ensure that they can advance sustainability and resilience goals through the planning, implementation and evaluation of programs.
- The Interagency Task Force must promote the integration and meaningful participation of local actors in order to promote accountability of the task force’s actions, facilitate governmental and civil society cooperation and integration of local knowledge, and strengthen the task force’s credibility.
4) The comprehensive report must be available to the public
- The reports prepared by the Interagency Task Force must be available electronically and in print, in both English and Spanish.
- Specific guidelines on the content of the reports should be listed on the bill.
Clearly, the Insular Areas Climate Change Act proposes far-reaching programs and a substantial investment of resources. The changes we suggest are essential to ensure that resources are invested effectively and promote the resilience of our island communities and their ecosystems. It is counterproductive that the law only requires collaboration between executive governments at the local and federal level, especially when we consider that the island territories suffer serious vulnerabilities related to the lack of political power and governance.
A group of academics and professionals who are experts in the areas of climate change, energy sustainability, and building resilience have raised our concerns with the Committee on Natural Resources of the US House of Representatives. From our organizations — the Union of Concerned Scientists and the Resilience Law Center at the University of Puerto Rico — we advocate for these changes. It is clear to us that, even when island territories have very diverse populations and histories, the inclusion of local actors and prioritization of local knowledge will help balance power and correct the systemic failures that have left our populations so vulnerable and injured. Congress must not miss this opportunity to correct the course of the history of the territories over which it has control.
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Colonial Pipeline Shut Down By Ransomware Attack
The largest U.S. fuel pipeline remains shut down following a massive ransomware cyberattack on Friday. The Colonial Pipeline, described by one analysis as “the jugular of the U.S. pipeline system,” carries gasoline, diesel, and jet fuel from Texas to New Jersey and supplies fuel to much of the Southeast.
The attack and shutdown underscore the vulnerability of pipelines to cyberattacks. The Russian criminal group DarkSide is reportedly behind the attack. Operators of the Colonial Pipeline said they are in the process of bringing the system back online, but there was no indication of when that would happen from either company officials or outside experts.
Sustained outages could have significant impacts on fuel supplies along the East Coast. The Department of Transportation declared a state of emergency for 17 states plus DC on Sunday to help ease fuel shortages.
Attack and shutdown: New York Times $, Washington Post $, AP, NBC, CNN, The Verge, Politico, Axios, Earther, Bloomberg $, CBS; Outage duration scenarios: CNBC; Market response: Reuters, NPR; Administration response: Axios, Bloomberg $, BBC.
Originally published by Nexus Media.
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