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- Investors Can’t Diversify Away from Climate Risk
With the U.S. role in the Paris Climate Agreement hanging in the balance, over 280 investors managing a collective $17 trillion in assets spoke up in support of the agreement:
As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments. . . . . We urge all nations to stand by their commitments to the agreement.
Why do investors care? As pointed out in a blog earlier this year, for investors, it all comes down to risk and return. And, where climate change is concerned, this is a risk that is omnipresent.
Simply put, investors cannot diversify away from the risks of climate change. Unlike other risks such as currency fluctuations or new regulations, the disruptive impacts of climate change on the global economic system are so pervasive they cannot be offset by simply shifting stock portfolios from one industry to another.
A study from Cambridge University found equity portfolios face losses of up to 45% from climate shocks, with only half of these losses being “hedgeable.” Likewise, The Economist Intelligence Unit estimates that investors are at risk of losing $4.2 trillion by 2100, with losses accruing across sectors from real estate to telecom and manufacturing.
Because investors recognize that climate risk is unavoidable, they support a coordinated global effort as envisioned in the Paris Agreement. It is also why investors have already expressed such strong support for regulatory limits on carbon and methane emissions. Governments globally will need to take further proactive action to limit greenhouse gases, and incentivize technology shifts towards lower-carbon energy.
Seizing opportunities in a low-carbon economy
Technology changes will require significant adjustments in how global capital is allocated, which is an opportunity investors are eager to seize because of the promise of risk-adjusted returns in the space.
It is estimated that a shift to a clean-energy economy will require $93 trillion in new investments between 2015 and 2030 and the rise of impact investing shows markets are starting to respond to opportunities in renewable energy, grid modernization, and energy efficiency among others.
For example, the green bond market has grown from $11 billion to $81 billion between 2011 and 2016 with projections for 2017 as high as $150 billion. On top of this, leading global investment banks have already pledged billions towards sustainable investing.
And where capital flows, so do jobs.
As we’re seeing in the US, renewable energy jobs grew at a compound annual growth rate of nearly 6% between 2012 and 2015 and the solar industry is creating jobs 12 times faster than the rest of the economy. Similarly, the methane mitigation industry is putting Americans and Canadians to work limiting highly potent emissions from oil and gas development.
Technology and capital changes are already happening, but are unlikely to happen quickly enough on their own. Government policies and frameworks that speed this transition, like a price on carbon, will be critical.
Which brings us back to the importance of the Paris Agreement…
The Paris Agreement is crucial to addressing climate change
Investors vote with their dollars, and are strongly backing U.S. participation in the Paris Agreement. Global investors understand the risk of climate change and see the Paris Agreement as a good return on investment, with an optimistic $17 trillion nod to the power of capital markets to provide the innovation and jobs we need if the right policies are in place. The U.S. administration should ensure it is considering the voice of investors and the capital they stand ready to put to use as it makes its decision.Read more »Source: Main Feed - Environmental Defense | Published: May 24, 2017 - 5:42 am
- New Report: Access to Information Powers Safer Chemicals InnovationRead more »Source: Main Feed - Environmental Defense | Published: May 24, 2017 - 4:00 am
- April Showers Bring May Flows: What That Means for Louisiana’s Wetlands
April showers usually bring May flowers. They also often bring higher river flows. The heavy rainfall within the Mississippi River’s enormous drainage basin over the last month is currently flowing down the river toward the Gulf of Mexico. The U.S. Army Corps of Engineers began inspections along the Mississippi River on May 4th in response to the rising river. In Baton Rouge, the river stage is predicted to peak at 41 feet on May 27th. While a river stage of ...
The post April Showers Bring May Flows: What That Means for Louisiana’s Wetlands appeared first on Restore the Mississippi River Delta.Read more »Source: Main Feed - Environmental Defense | Published: May 23, 2017 - 2:29 pm
- President Trump’s Budget Proposal Abandons Louisiana Coastal Restoration
Groups call on Congressional leaders to fight for GOMESA funding, and other critical programs that protect communities and wetlands. (NEW ORLEANS – May 23, 2017) Earlier today, President Trump unveiled a budget proposal for Fiscal Year 2018 that would significantly set back coastal restoration and protection efforts in Louisiana. The proposal upends the Gulf of Mexico Energy Security Act (GOMESA), which is a commitment from Congress to share offshore energy revenues with four of the Gulf states that are impacted ...
The post President Trump’s Budget Proposal Abandons Louisiana Coastal Restoration appeared first on Restore the Mississippi River Delta.Read more »Source: Main Feed - Environmental Defense | Published: May 23, 2017 - 1:41 pm
- President Trump’s Budget Proposal Abandons Louisiana Coastal Restoration
- EPA Delays Efforts to Reduce Methane Pollution from Landfills
- Trump Budget Cuts Would Gut Our Ability to Protect Americans’ Health
- What we know so far about Rick Perry’s power grid “study”
By Jim Marston
Among Rick Perry’s first acts as Secretary of Energy was calling for a 60-day “study” of whether any policies or regulations have led to the premature retirement of coal or nuclear plants. I – and many others in the clean energy industry – are concerned this so-called study will amount to little more than a pro-coal fluff piece.
To people familiar with energy policy and the coal industry’s rhetoric, Perry’s request is a transparent promotion of coal and a backdoor attack on clean energy resources, like solar, wind, and energy efficiency. Besides, 60 days is barely enough time to fill job vacancies in a new administration, much less conduct a thorough analysis of America’s complex energy policies.
But until the report is released, we can only look at what Perry and other Trump appointees have said and done about energy, generally, and coal, specifically, to predict what arguments Perry’s office will make.
Over the next few weeks, EDF will examine several of the administration’s pro-coal arguments and explain why:
What we know so far about Rick Perry’s power grid “study”
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- Perry’s coal propaganda has nothing to do with reliability and everything to do with giving the pollution industry what it wants. The “grid reliability” angle is a ruse, and one Perry used a decade ago when he tried to fast track new coal plants in Texas. This issue has been studied relentlessly by grid operators and government agencies around the country, and the grid is handling coal’s decline just fine. The Trump administration is using the reliability argument as cover to distract the American people from their close ties with the coal industry. Just look at Perry’s staff at DOE – it’s a who’s who of the fossil fuel industry lobby. His Chief of Staff, who will manage the study, worked for the Edison Electric Institute – where he led its anti-solar campaign.
- Perry’s (and Trump’s and Pruitt’s) flip-flop on states’ rights is hypocritical. EPA Administrator Scott Pruitt recently took time off from decimating our clean air and water protections to second Perry’s argument that some state policies that encourage fuels other than coal could be a national security risk and should be reversed. I must admit, suggesting that coal makes America safer is a clever tactic. But it’s not true, and I suspect this tack is little more than a way for Perry and Pruitt to counter all their vile attacks against the federal government when they were governor of Texas and attorney general of Oklahoma. Apparently, states’ rights are so 2016.
- Coal is terrible for the economy, human health, and the environment. Propping up the ailing coal industry will hurt the economy and American jobs, serving as another broken promise from Trump. Market trends undeniably show that cleaner, smarter energy – like solar and wind – is creating more jobs than fossil fuel electricity. Furthermore, we know doubling down on dirty coal means more asthma attacks, more health problems for elderly Americans, and a more polluted future.
The Trump administration may look chaotic, but its actions suggest it is meticulously and unapologetically laying the groundwork for four years of pro-coal policy. This so-called study is just another step of the plan. See also Trump’s latest 2018 budget proposal – leaked last week – which aims to cut funding for DOE’s renewable and energy efficiency program by 70 percent.
So stay tuned. It’s going to be an interesting few weeks.
Photo credit: Gage Skidmore
This post originally appeared on our EDF Voices blog.Read more »Source: Main Feed - Environmental Defense | Published: May 22, 2017 - 6:30 pm
- Toxic secrets in our food? EDF joins in lawsuit aimed at protecting food safety
By Jack Pratt
Today, Environmental Defense Fund joined other groups in challenging a Food and Drug Administration (FDA) rule that allows chemical and food manufacturers to decide for themselves – in secret – what chemicals and food additives can be added to foods. The practice puts our health at risk and does not fulfill Congress’ requirement that FDA determine that chemical additives are safe before they can be used in food.
Americans would be shocked to learn that food companies routinely add novel chemicals to our food without first getting FDA approval. In doing so, the companies are exploiting a loophole exempting ingredients “Generally Recognized as Safe” (GRAS) from formal FDA review and approval.
Originally intended for ingredients like vinegar and olive oil, industry now abuses the GRAS loophole by bypassing FDA review and making safety determinations in secret. The alarming result: even FDA does not know what is in our food. In fact, FDA has no way to know what chemicals are actually being used in which food or in what quantities—even in baby food.
Last year, the FDA issued a final rule formalizing this outrageous practice. We described this decision as a lost opportunity for safer food additives when the decision was made. Today, EDF and our colleagues at the Center for Food Safety (CFS), Breast Cancer Prevention Partners, Center for Science in the Public Interest, and Environmental Working Group, represented by CFS and the environmental law firm Earthjustice, joined in filing suit against the FDA for unconstitutionally and illegally delegating that authority to self-interested food and chemical manufacturers.
It is disappointing that the groups were forced to take legal action. In addition to being a bad policy that doesn’t comply with law, or protect public health, the FDA is oddly out of touch with public sentiment. Just last week an industry funded survey showed overwhelming consumer concern about chemicals in food, including cancer causing chemicals, while showing diminished confidence in the food supply. This continues a trend that has been building for years. Food companies would be wise to take notice: adding secret chemicals without FDA scientific review to our food is no way to improve confidence in their products.
But with thousands of secret chemicals in our food, we can’t wait for industry or FDA to wise up. Today’s lawsuit seeks to force FDA to do what should be common sense—determine that food additives are safe before they can be added to our food.Read more »Source: Main Feed - Environmental Defense | Published: May 22, 2017 - 6:03 pm
- Protecting people's health while growing Texas' economy
By John Hall
Why not both?
With Texas’s plentiful natural resources and cutting-edge research and development capabilities, we don’t have to choose. If planned strategically, protecting our health and growing the economy go together. Our policymakers and business leaders should make note of our recent history as they’re planning for our future.
Under former Governor George W. Bush, Texas refineries and petrochemical companies met or exceeded established ozone policies while expanding, innovating, and generating record sales growth. Now, smarter and more efficient energy sources are helping to clean our air while creating higher-than-average paying jobs and attracting large-scale investments into the state.
Beyond ozone protections
In accordance with the federal Clean Air Act’s 1990 amendments, the Environmental Protection Agency’s health-based ozone standards required large industrial facilities to drastically cut their nitrogen oxides and volatile organic compound pollution. Moreover, project sponsors had to completely offset the emissions resulting from expansions at existing facilities and newly constructed plants, plus an additional 10 to 20 percent margin.
Initially, many Texas business leaders boldly predicted refining and petrochemical facilities would be forced to shut down, costing thousands of Texans their jobs.
But instead, these ozone protections inspired innovation across the industry. Companies were able to go above and beyond simple compliance, and existing operations continued as new plants and major expansions came online. Growth generated greater revenues while giving Texans healthier air, water, and land.
Thanks to related research, development, and innovation sparked by these standards, the Houston Ship Channel today is buzzing with activity, serving as one of the largest refining and petrochemicals hubs in the world.
Clean energy potential
Similarly, clean energy can simultaneously grow the economy and lower pollution. And, it’s booming in Texas.
Last year, wind provided nearly 15 percent of power in the Electric Reliability Council of Texas (ERCOT), which manages the flow of electric power to 24 million Texas customers (representing about 90 percent of the state’s electric load). And, Texas is on track to become the fastest-growing utility-scale solar market in the United States.
As more clean energy comes online, it often replaces dirty coal-fired electricity. Consequently, by lowering Texas’s coal power plant emissions approximately 30 percent—an achievable goal—2,300 Texas lives and $20 billion in associated costs could be saved.
Meanwhile, the wind and solar power industries now employ more than four times as many Texans as the fossil-fuel electricity industry. Plus, nearly 150,000 Texans work in energy efficiency-related jobs. And, wind energy has sparked more than $30 billion in capital investment, far surpassing any other state.
There are clearly cost-effective ways to protect people and the environment while facilitating economic growth. Texas’s refining and petrochemical industry did it, and the booming clean energy economy here is doing it now. Influencers and policymakers, however, need to recognize and leverage available opportunities. An easy way to give Americans cleaner air and a jolt to the economy is to continue to encourage clean energy’s growth—or at least don’t stand in the way of its impressive momentum.
This post originally appeared on the Cynthia and George Mitchell Foundation blog.Read more »Source: Main Feed - Environmental Defense | Published: May 22, 2017 - 5:10 pm