ECONOMICS

ECONOMICS


ECONOMICS

The vast economic implications of climate change are explored here as we acknowledge  the interrelationships of economic and financial risk that are associated and often amplify one another --for example, weather-related property destruction can lead to bank losses, leading to less lending, leading to reduced investment, etc. We are watching, in these pages, the federal reserve closely as they monitor these connections – along with the actions of international organizations, governments, businesses as we search to develop an understanding of the implications of climate change for the financial sector and the financial stability of ourselves, our families, and our world.

We are also looking to gain information which can, in turn,  wield influence and encourage action by individuals, communities, financial organizations (such as pension funds), insurance companies, corporations and governments. Each member of the economy can influence change within their area of influence if they realize the extent of their power and wish to exercise it.

The section is organized in the following way:

CORONAVIRUS: As a result of the pandemic, global emission dropped in 2020 but the decline wasn’t nearly enough to halt the buildup of greenhouse gases in the atmosphere. This page also appears in the HEALTH section of the website.

COSTS: Extreme weather events cost U.S. taxpayers $99 billion in 2020 and things are only getting worse, and that is not taking into consideration the health impacts, and other side effects of climate change. Economic experts and climate insurers have warned that if climate change continues unmitigated, the world economy (particularly in developing countries) will lose growth opportunities in the trillions of dollars.

JOBS: Our future economic health will be heavily impacted by the jobs a clean energy future can deliver. It focuses on where the green jobs are growing.

INVESTMENTS AND DIVESTMENTS: As individual shareholders, we can take advantage of ESG (Energy, Sustainability, and Governance) investing and deliver our dollars to organizations, corporations and ideologies that are fighting against climate change. We can also divest from those organizations as can university, government and union pension funds.

INSURANCE: Insurance companies are in the business of predicting future loss, and so must ensure that they reserve for such events. What happens when history is no longer a reliable guide for predicting the future? Going forward, insurance companies may have a heavier hand in shaping human behavior. It’s unlikely that homebuyers would purchase (or be able to purchase) a house in uninsurable areas, for example.

HOUSING: Extreme weather has caused the burning and flooding of thousands of homes. It has destroyed power in both the 2019/20 Texas winter freeze and the 2021 summer hurricanes. It has disproportionately harmed the poor who have fewer resources to move. We have numerous mitigation and adaptation measures to explore.

THE CIRCULAR ECONOMY: Eliminating waste and pollution, this is instead a closed-loop system emphasizing reuse, recycling, sharing, and repair. Ideally, waste and pollution are cut out of the equation in the design phase, and products and materials are kept in use. One of the tools in our tool box.

CARBON PRICING: Burning fossil fuels is by far the greatest source of the greenhouse gases causing climate change. However, the full cost of fossil fuel energy is not included in the price of the fuel. We pay for that later when we deal with the consequences of global warming. Using a car to illustrate this point, “We pay for the gas, we pay for the car, and we pay for the insurance, but we don’t pay for the pollution that comes out of the tail pipe.” This page explores different carbon pricing solutions and appears again in our POLITICS section.

CREDIT: C2ES

CURRENT NEWS

KEY RESOURCES

Origin of the Network for Greening the Financial System

11/30/21
At the Paris “One Planet Summit” in December 2017, eight central banks and supervisors established the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). Since then, the membership of the Network…

Tracking climate mitigation efforts in 30 major emitters

11/02/21
This report by NewClimate Institute, International Institute for Applied Systems Analysis (IIASA) and FTSE Russell tracks climate mitigation efforts in 30 countries and regions. Our analysis shows that emissions trends remain far from the goals…

Gauging Economic Consensus on Climate Change – Issue Brief

04/14/21
We conducted a large-sample global survey on climate economics, which we sent to all economists who have published climate-related research in the field’s highest-ranked academic journals; 738 responded. To our knowledge, this is the largest-ever…

Climate Roadmap for U.S. Financial Regulation

04/08/21
The Biden Administration has taken office with an urgent climate mandate to act on climate and announced a “whole-of-government” approach in response.1 Because climate change threatens our financial system and, indeed, entire economy, the United…

Addressing Climate as a Systemic Risk: A call to action for U.S. financial regulators

10/01/20
This Ceres report outlines how and why U.S. financial regulators, who are responsible for protecting the stability and competitiveness of the U.S. economy, need to recognize and act on climate change as a systemic risk.

Moving To A Finite Earth Economy – Crew Manual

04/25/20
Moving To A Finite Earth Economy By 2030 Addresses Two Critical Human Issues: The Existential Threat Of Climate Change, And The Fact That Growth Economies Are The Root Cause.

Resources as a Constraint on Growth By William D. Nordhaus

12/18/19
Things which have traditionally been treated as free goods-air, water, quiet, natural beauty-must now be treated with the same care as other scarce goods.

MORE NEWS

VOX

Can we save the planet by shrinking the economy?

By Kelsey Piper  Photo: Maranie Staab/Bloomberg/Getty Images   08/03/21  
Social media gives everyone the opportunity to argue with the world. So if you want to persuade people about the need to tackle climate change and how we should do it, social media is a…

How Financial Institutions Can Help Combat Climate Change

By TechFunnel Contributors   07/15/21  
There is often an assumption held by ordinary people that finance and positive environmental change are oxymorons. that the finance industry exists to serve the bottom line and nothing else. This has slowly been changing…

Fannie and Freddie Mortgages Vastly Underestimate Flooding Risks

07/15/21  
Climate-induced flooding has inundated coastal cities, yet new reporting from Politico shows that government mortgage lenders like Fannie Mae and Freddie Mac continue to pump money into severely flood-prone property markets. 
AP

Senate Democrats reach $3.5 trillion budget agreement

By Alan Fram And Lisa Mascaro  Photo: AP Photo/J. Scott Applewhite   07/14/21  
Senate Democrats announced late Tuesday that they’d reached a budget agreement envisioning spending an enormous $3.5 trillion over the coming decade, paving the way for their drive to pour federal resources into climate change, health…

Remarks by secretary of the treasury janet l. Yellen at the venice international conference on climate

07/11/21  
Thank you, Ignazio, for hosting us today, and how appropriate to be in Venice. Even if this weren’t a conference about climate change, how could we not raise the issue here? For all of us,…

UN chief urges G20 finance chiefs to support global COVID vaccine plan, climate finance

Photo: Karina Zambrana   07/09/21  
“To restore trust in multilateralism, we need to deliver on vaccines, economic recovery and climate finance”, he said in a video message to G20 finance ministers meeting in Venice, Italy.  “With your leadership and political…

US’s Yellen urges better coordination on carbon policy

By David Lawder  Photo: Shawn Thew/Pool via REUTERS/File   07/09/21  
U.S. Treasury Secretary Janet Yellen called on Friday for better international coordination on carbon-cutting policies to avoid trade frictions, days before the European Union is due to unveil a controversial carbon border tax.

Sustainable development report shows devastating impact of COVID, ahead of ‘critical’ new phase

Photo: Patrick Brown   07/06/21  
The Sustainable Development Goals Report 2021, launched on Tuesday at UN Headquarters in New York, shows the toll that the COVID-19 pandemic has taken on the 2030 Agenda, as the landmark annual High-Level Political Forum…

COVID-19’s socio-economic fallout threatens global coffee industry, study finds

06/29/21  
COVID-19's socio-economic effects will likely cause another severe production crisis in the coffee industry, according to a Rutgers University-led study. The study, which appears in the journal Proceedings of the National Academy of Sciences, included…
TNR

The Bipartisan Infrastructure Bill Is a Gift to Wall Street, at the Planet’s Expense

By Kate Aronoff  Photo: Miguel Medina/afp/getty Images   06/23/21  
The financial crisis that began in 2008 wasn’t great for Wall Street titans: Regulators cracked down on them, protesters occupied them, and public opinion soured against them. They managed to make out pretty well in…
VOX

“Back to normal” puts us back on the path to climate catastrophe

By Rebecca Leber  Photo: Hans Gutknecht/Los Angeles Daily News/Getty Images   06/15/21  
The Covid-19 pandemic upended daily life so drastically that there was a moment when it seemed to be making a dent in the climate crisis. Rush-hour traffic disappeared, global travel slowed to a crawl, and…

‘No place to hide’: Central banks ramp up scrutiny of climate risk

By Lorraine Woellert  Photo: Susan Walsh-Pool/Getty Images   06/08/21  
As shareholders celebrate long-fought climate wins at some of the world’s largest corporations, a potentially more powerful financial movement is under way that could shift trillions of dollars in capital. The role of greenhouse gas…

First Thing: economic toll of climate crisis ‘will be like two pandemics a year’

By Miranda Bryant  Photo: Tom Nicholson/Reuters   06/07/21  
The world’s biggest industrialised economies will shrink by twice as much as they did during the coronavirus pandemic if they do not tackle rising greenhouse gas emissions, according to research.
NPR

A Tiny Fund Has Scored A Historic Win Against ExxonMobil Over The Future Of Oil

By Camila Domonoske  Photo: Logan Cyrus   05/26/21  
In a dramatic boardroom battle on Wednesday, a tiny hedge fund fought with the energy giant ExxonMobil over the future of the oil and gas industry — and won.

Biden Executive Order Targets Climate Financial Risks

By Avery Ellfeldt  Photo: Caroline Brehman Getty Images   05/21/21  
The directive charges federal agencies with assessing the potential economic toll of warming and urging regulators to it

Biden Signs EO to Evaluate and Mitigate Climate-Related Financial Risk

05/21/21  
Yesterday, President Biden signed an executive order on climate-related financial risk, a cross-governmental plan that directs federal agencies to identify and mitigate financial risks presented by climate change to Americans, businesses, and the government itself. The administration…

Biden orders U.S. agencies to assess, mitigate risks of climate change

By Andrea Shalal and Jeff Mason  Photo: Jonathan Ernst   05/20/21  
President Joe Biden on Thursday directed federal agencies to assess and mitigate the increasing and serious risks that climate change poses to individuals, businesses, the federal government and the U.S. financial system, the White House…

Exclusive Fed Privately Presses Big Banks On Risks From Climate Change

By Pete Schroeder  Photo: Jason Miczek   05/13/21  
The U.S. Federal Reserve has asked lenders to start providing information on the measures they are taking to mitigate climate change-related risks to their balance sheets, according to four people with knowledge of the matter.…

For Clean Energy, Buy American or Buy It Quick and Cheap?

By Noam Scheiber  Photo: Theophile Trossat   05/11/21  
President Biden says slowing climate change will create jobs. Tension between unions and environmentalists shows it’s not so simple.

Founder of Tesla supplier CATL topples Li Ka-shing as Hong Kong’s richest man

By Nadia Lam  Photo: Getty Images   05/05/21  
Robin Zeng Yuqun, the founder of Contemporary Amperex Technology (CATL), has overtaken Li Ka-shing as the wealthiest person in Hong Kong, according to Forbes. Zeng’s real-time net worth, which stood at US$34.5 billion as of…

Could a ‘Crypto Climate Accord’ erase cryptocurrencies’ carbon footprint?

By Justine Calma   04/08/21  
A newly announced “Crypto Climate Accord” aims to erase cryptocurrencies’ legacy of climate pollution. That’s a tall order considering the enormous amounts of energy that the most popular cryptocurrencies — bitcoin and Ethereum — consume.…

Biden tax plan replaces U.S. fossil fuel subsidies with clean energy incentives

By Timothy Gardner   04/07/21  
 U.S. Treasury Secretary Janet Yellen on Wednesday released details of a tax hike proposal that would replace subsidies for fossil fuel companies with incentives for production of clean energy in President Joe Biden’s infrastructure plan.

Budgetary Effects of Climate Change and of Potential Legislative Responses to It

04/04/21  
In this report, the Congressional Budget Office outlines the primary channels by which climate change and policies intended to mitigate or adapt to it affect the federal budget.

The Weekly Planet: 3 Ways That Biden Could Green the Financial System

By Robinson Meyer   03/31/21  
One of the core ideas of this newsletter is that you can’t fight climate change without altering the stuff of the world.

Short-Sighted Analysts Highlight a VW-Tesla Race to Dominate Electric Vehicles

By Steve LeVine  Photo: Wang Zhao   03/30/21  
For two weeks, Volkswagen has held auto industry analysts and reporters in unusual thrall: This 84-year-old German automaker, these opinion-makers have said, has managed a miraculous pivot from a legacy industrialist to a front-runner in…

Opinion: Government must come clean about the total costs of climate change

By Paul Bledsoe  Photo: Peter Nicholls/Reuters   03/25/21  
The March 18 front-page article “Regulators push Wall Street for disclosure on climate risks” noted that government statistics found 22 extreme weather events last year cost the nation nearly $100 billion. In fact, costs to businesses and especially federal taxpayers…

Biden administration wants the financial sector to face up to climate risk

By Steven Mufson and Juliet Eilperin  Photo by Callaghan O'Hare   03/18/21  
A growing number of federal regulators are pushing corporate America to reckon with the cost of climate change, arguing that global warming poses significant peril not only to the environment but also to the U.S.…

Bitcoin’s Climate Problem

By Andrew Ross Sorkin  Photo by Alessandro Bianchi   03/09/21  
“Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing.” That was what Bill Gates recently told me. At a time when companies and…

Large variation in daily temperatures linked to lower economic growth

By Adam Vaughan  Source: Nature Climate Change/Maximilian Kotz   02/08/21  
Economic growth is lower in regions that experience bigger swings in day-to-day temperatures, revealing a potential new cost of climate change that boosts the case for green investments and fossil fuel taxes.

General Motors to stop making diesel and gas vehicles by 2035

By James Crump   01/28/21  
General Motors (GM) has announced that it plans to end production of all diesel and gasoline powered cars, trucks and SUVs by 2035.

A surge in green financing boosts climate businesses

By Steven Mufson  Photo by Susan Montoya Bryan   01/27/21  
From a dorm room at Stanford University, two business school students designed a system of solar panels for the roof of a boarding school in Nairobi. It worked. The school saved money and replaced the…

Study: Accounting for value of nature reinforces Paris climate targets

By Dana Nuccitelli   01/26/21  
A new study in Nature Sustainability incorporates the damages that climate change does to healthy ecosystems into standard climate-economics models. The key finding in the study by Bernardo Bastien-Olvera and Frances Moore from the University…
NPR

Microsoft Pledges To Remove From The Atmosphere All The Carbon It Has Ever Emitted

By Camila Domonoske  Photo: Vesa Moilanen/AFP via Getty Images   01/16/21  
By 2050, the tech giant pledges it will "remove from the environment all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975."

Exclusive: Former UN climate head joins Impossible Foods

By Bryan Walsh  Photo: Sam Barnes/Sportsfile via Getty Images   01/15/21  
Christiana Figueres, an architect of the Paris climate agreement, will be joining the board of alternative protein startup Impossible Foods, Axios has learned.

Investors flee Big Oil as portfolios get drilled

By Karin Kirk  Graphic: Karin Kirk, Yale Climate Connections   01/14/21  
While climate advocates have long had science on their side, Big Oil has relied on leveraging its financial might and political clout to cast doubt on the practicality of moving the global economy away from…

Ocean 100: Profits from world’s seas dominated by 100 companies

By Umberto Bacchi   01/13/21  
Just 100 companies account for most of the profits from the world's seas, researchers said on Wednesday, calling on them to help save the oceans from over-fishing, rising temperatures and pollution. Together, the companies generated…

A record 22 billion-dollar disasters struck the U.S. in 2020

By Matthew Cappucci   01/09/21  
The year 2020 will go down in the history books as one riddled with a record number of billion-dollar disasters. According to a new report released by the National Oceanic and Atmospheric Administration (NOAA) on…

With Biden, The Whole Climate Will Change

Ken Silverstein  Photo: Mark Makela/Getty Images   01/04/21  
During the Trump Administration, a dark cloud hung over the nation’s environmental movement and specifically any attempts to mitigate climate change. But the election of Joe Biden to the presidency will change that — certainly…

The pandemic taught us how not to deal with climate change

By James Temple  Photo: Mario Tama/Getty Images   01/01/21  
We must transform the economy, not halt it, to prevent runaway warming. And we're doing it far, far too slowly today.
NPR

It Wasn’t Just The Pandemic: Oil’s Terrible, No Good, Very Bad Year

By Camila Domonoske  Photo: Andrew Caballero-Reynolds/AFP via Getty Images   12/31/20  
Between hurricanes, geopolitical rivalries, irate investors and climate pressures, oil producers faced a host of challenges that weren't created by the coronavirus — and can't be cured with a vaccine.

‘How much will it cost to slow climate change?’

By Sara Peach   12/14/20  
As a broadcast meteorologist, one of the most common questions I’m asked is the hardest one for me to answer! Some of my colleagues and friends understand that human-caused global warming is happening, but they…

A $7 trillion climate change warning to the stock market from its biggest shareholder

By Eric Rosenbaum  Photo by Jason Alden   12/13/20  
The evidence of climate change — from global temperature records to Arctic ice melt, wildfires, hurricanes and flooding — is accelerating. So is investment pressure on corporations.

For Biden’s Economic Team, an Early Focus on Climate

By Jim Tankersley and Lisa Friedman   12/11/20  
In announcing key economic advisers in the White House and the cabinet, the president-elect has emphasized action to boost clean energy and reduce emissions

The Climate Crisis

Photo by Erik McGregor   12/04/20  
In the meantime, however, most people need a bank and a credit card. As it happens, there are alternatives to the big players. Local credit unions are, in most cases, unconnected to the fossil-fuel industry.…

Why Business Should Back a Biden Climate Plan

By Kate Zerrenner   12/02/20  
During the George W. Bush presidential administration, I worked for the Government Accountability Office. One project on which I worked was a look at the economic costs and benefits of the U.S. not taking action…

Fighting climate change: Cheaper than ‘business as usual’ and better for the economy

By Dana Nuccitelli  Illustration: Hsiang et.al. Science   11/30/20  
Here's why moving now to combat climate change is cheaper and better for the economy than postponing action.

Banks Can’t Deny Services to Entire Industries Under OCC Proposal

By Andrew Ackerman  Photo by Angus Mordant   11/20/20  
Big U.S. banks can’t refuse to lend to entire categories of lawful businesses under a rule proposed Friday, following complaints that the oil-and-gas industry was unfairly denied financing by large lenders.

The ‘market’ won’t save us from climate disaster. We must rethink our system

By Robert S. Devine  Photo by David Mc. New   11/19/20  
Though it sounds like a generic phrase, “market failure” is actually a technical term. It doesn’t refer to scams like insider trading or corporate fraud. A failure occurs when the marketplace allocates resources in a…

How These 5 Banks Are Fighting Climate Change

By Dana George  Photo by Getty Images   10/17/20  
Global warming may be the most pressing issue of the 21st century. Human activity, like chopping down forests, has raised average temperatures worldwide by 1.8 degrees Fahrenheit since the 19th century. While that may not…

Tenth of pandemic stimulus spend could help world reach climate goals: Study

By Matthew Green   10/16/20  
The world could get on track to avert catastrophic climate change by investing a tenth of a planned $12 trillion in pandemic recovery packages in reducing dependence on fossil fuels.