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.

CURRENT NEWS

Image By CCR + AI
Highlight Article

Climate justice: rooted in community

02/23/24
In the spirit of community and solidarity with other organizations doing important work, we at Climate Solutions wanted to showcase a Seattle-based grassroots organization doing some real good. Young Women Empowered’s mission is to cultivate…
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Scoop: Climate advocacy group launches campaign to fight ESG backlash

By Ben Geman 02/22/24
A young advocacy group that defends climate-focused investing is launching the next phase of its campaign Thursday.
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The ESG Backlash on Wall Street Spurs a Jump in ETF Closures

By Isabelle Lee 02/15/24
Interest in sustainable investing has taken a back seat in the past year after the environmental, social and governance strategy found itself enmeshed in a viscous political storm.
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The economic impact

02/13/24
Instability in food supplies in multiple countries contributes to growing political risk, with trade disputes, increased competition and inequality, social unrest, and rising criminality. These factors add to volatility for businesses, with delays affecting third-party…
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Image By CCR + AI
Highlight Article

The Climate Foundation Funded by Laurene Powell Jobs Has More Than $3 Billion to Spend — and a Deadline

By Jim Rendon 02/07/24
Jared Blumenfeld has more than $3 billion to fight climate change, and he needs to get it out the door before 2035. It’s an unusual mandate in the often slow-moving world of foundations that are…
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An Ounce of Prevention is Worth a Pound of Cure

By David Houle 02/06/24
In this century, there has been a developing conversation about the transition from fossil fuels to clean energy. It is long past time for humanity to dramatically reduce our reliance on fossil fuels… yet we…
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Big Oil Is Doing Great … Except in California

By Matthew Zeitlin 02/02/24
Both Exxon and Chevron reported substantial fourth quarter and full-year 2023 earnings Friday — $36 billion and $21 billion for 2023, respectively, their second highest annual profits ever. Both also called out California, however, once…
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Hidden Subsidies Prop Up New York’s Fossil Fuel Industry

By Colin Kinniburgh and Julia Rock 02/02/24
ON A CRISP EVENING last spring, nearly 100 people packed into an elementary school auditorium in the Hudson Valley town of Athens. They had shown up to weigh in on the future of the town’s…
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A Superfund for climate change? States consider a new way to make Big Oil pay.

By Katie Myers 02/02/24
Last July, the normally warm and humid but still pleasant New England summer was disrupted by a series of unusually heavy rain storms. Flash floods broke creek banks and washed away roads, inundating several cities…
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Global Clean Energy Spending Surges to $1.8 Trillion. It’s Not Enough

By Will Wade 01/30/24
Global spending on the clean-energy transition hit record highs as the world moves to rein in climate change, but it’s still not enough to get on track to net-zero emissions.
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Companies Are Snapping Up New Clean-Energy Tax Credits

By Richard Rubin and Amrith Ramkumar 01/18/24
A nascent market for clean-energy tax breaks is surging faster than expected, with deals totaling as much as $9 billion already done and tens of billions more expected this year.
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Flush With Investment, New U.S. Factories Face a Familiar Challenge

By Ana Swanson and Jim Tankersley 01/15/24
The Biden administration has begun pumping more than $2 trillion into U.S. factories and infrastructure, investing huge sums to try to strengthen American industry and fight climate change.
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KEY RESOURCES

Billion-Dollar Weather and Climate Disasters

01/06/24
Summary of U.S. billion-dollar weather and climate related disaster research, methodology, and data sources.

Principles for Net-Zero Financing & Investment

09/25/23
In recent years, financial institutions — including over 100 U.S. firms1 — have independently made voluntary net-zero commitments. Successful execution of such commitments can help firms mitigate exposure to climate-related risk and unlock economic opportunities…

National Green Bank

06/27/23
CGC is a non-profit with a mission to halt climate change by accelerating investment in clean energy technologies. CGC achieves this by advocating for, creating and implementing Green Bank finance institutions. Green Banks are a…

World Energy Investment 2023

05/31/23
This year’s edition of the World Energy Investment provides a full update on the investment picture in 2022 and an initial reading of the emerging picture for 2023.

F o s s i l Fuel Finance Report 2022

04/03/23
n a year that saw unprecedented attention to banks’ role in driving climate change, one of the most important developments flew largely under the radar: La Banque Postale — a major French bank with $901.7…

Track public money for energy in recovery packages

08/02/22
As governments across the world continue to invest hundreds of billions in the energy system to reboot their economies, our analysis is expanding to cover more countries and provide a more comprehensive global picture. Countries…

Task Force on Climate-related Financial Disclosures

04/18/22
Financial markets need clear, comprehensive, high-quality information on the impacts of climate change. This includes the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.

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

World’s Biggest Banks Made $3 Billion on Green Debt in 2023

By Tim Quinson   01/03/24  
For the second year in a row, global banks made more money underwriting bonds and providing loans for green projects than they earned from financing oil, gas and coal activities.
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Wall Street Makes Zero Progress in Energy Finance Transition

By Tim Quinson   12/14/23  
The world’s largest banks are showing little or no progress when it comes to their promise to help the world avoid the worst consequences of global warming. According to researchers at BloombergNEF, the ratio of…
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The New World Bank Leader Has the Climate Crisis at the Top of His Agenda

By David Gelles   12/08/23  
For years now, heads of state and government, academics and development experts have been calling on the World Bank to lead in the fight against climate change.
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Climate Funds Look to Regain Footing After Three Down Years

By Tim Quinson   11/22/23  
Clean energy funds are dirt. They’ve slumped roughly 30% this year after losing almost 5% of their value in 2022 and a whopping 23% in 2021. The renewables industry has been battered by rising interest…
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How the World Bank’s new boss is navigating a clash over climate change

By Steven Mufson   11/20/23  
Fighting climate change increasingly comes down to money — who has it, who doesn’t and who has the levers to help the world’s developing countries withstand the ravages of climate change.
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Wind and solar energy are booming in surprising places

By Shannon Osaka   11/15/23  
a county named for its coal deposits — a power company is building hundreds of wind turbines. In Mingo County, W.Va., where many small towns were once coal towns, the Adams Fork Energy plant will…
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Nuclear Is Out, Hydrogen Is In: Where Countries Put Energy R&D Money

By Nathaniel Bullard   11/09/23  
Since the International Energy Agency was founded five decades ago, it has compiled data on the government research and development budgets devoted to energy in its 31 member countries. This lets us take a detailed…
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Environmental Groups Cut Programs as Funding Shifts to Climate Change

By Ralph Vartabedian   11/08/23  
The Natural Resources Defense Council is eliminating its longstanding program promoting nuclear safety and cleanup as donors focus on the climate crisis....
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In a Warming World, Clean Energy Stocks Fall While Oil Prospers

By Jeff Sommer   11/03/23  
Heat, drought, flood and famine. Evidence of climate change is all around us. If the planet is to avoid even more severe consequences from global warming, the world’s leading energy agency says, consumption of oil,…
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As climate disasters mount, the world isn’t spending nearly enough to adapt

By Maxine Joselow   11/02/23  
As climate change makes extreme weather events more intense and frequent, the world must spend hundreds of billions more a year — 10 to 18 times more than it currently spends — helping vulnerable people…
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Tiny Climate Crises Are Adding Up to One Big Disaster

By Nancy Walecki   11/01/23  
The Louisiana wildfire that upended Katie Henderson’s life was barely a blip on this year’s string of catastrophes. On August 24, just after she’d brought her 7-year-old son home from school, she spotted a red…
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Biden’s climate fight now has a Fed problem

By Jasper Goodman   10/31/23  
President Joe Biden’s clean energy plan is facing an unexpected threat: banking regulators. Biden is trying to funnel federal money to clean energy projects using billions of dollars in tax credits. The renewables industry relies…
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The Real Cost of Plundering the Planet’s Resources

By Elizabeth Kolbert   10/23/23  
The town of Spruce Pine, North Carolina, doesn’t have a lot to say for itself. Its Web site, which features a photo of a flowering tree next to a rusty bridge, notes that the town…
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‘A lot of anger’: U.S. faces flak as it pushes for World Bank to run climate fund

By Zack Colman   10/19/23  
The Biden administration’s proposal to put the World Bank in charge of a fund that would pay poorer countries suffering irreversible climate damage is threatening to rattle U.N. climate talks that begin next month in…
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Rich countries promised poor nations billions for climate change. They aren’t paying.

By Timothy Puko   10/09/23  
After years of promises of new climate funding, the developing world is coming to grips with a disappointing reality: Money still isn’t coming through fast enough to address the mounting challenges of climate change. Promises…
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If You Want Our Countries to Address Climate Change, First Pause Our Debts

By William Ruto and Others   10/08/23  
When poor countries are forced to default on their foreign debt, as Ghana and Zambia have done, they pay a heavy price. Cut off from credit of any kind, spending on health, education and dealing…
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Trillions in G20 fossil fuel subsidies fuel profits and climate change

By Michael Barnard   10/04/23  
According to the International Monetary Fund, in 2022 direct subsidies for the fossil fuel industry rose to US$1.3 trillion. In previous years, the industry averaged profits of $1.5 trillion, but last year their global profits…
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How do we raise trillions of dollars to fight the climate crisis? The answer is staring us in the face

By Gordon Brown   09/25/23  
After a summer of ever-more deadly floods, droughts and firestorms, two autumn summits – the G20 and the UN general assembly – have come and gone. Both failed to deliver the long-promised global plan to…
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Canada, a giant oil producer, urges others to end fossil fuel subsidies

By Timothy Puko   09/22/23  
Canada is pushing the United States and other major economies to follow through on pledges to phase out “inefficient” fossil fuel subsidies, which have soared despite the growing threat of climate change.
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White House Directs Agencies to Account for Climate Change in Budgets

By Coral Davenport   09/21/23  
A directive issued on Thursday by the Biden administration would, for the first time, have federal agencies consider the economic damage caused by climate change when deciding what kinds of vehicles, equipment and goods to…
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The Economic Stakes of the UAW Strike

By Lora Kelley   09/19/23  
The United Auto Workers strike has sparked fears of major economic turmoil, but the experts I spoke with think a recession is unlikely. Still, even if the economic effects of the strike aren’t felt nationwide,…
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Yellen Pushes Treasury, World Bank to Fuller Climate Reckoning

By Christopher Condon and Saijel Kishan   09/19/23  
Janet Yellen planted a flag during her confirmation hearing in January 2021. Climate change, she declared, was an “existential threat,” and as Treasury secretary, she would make it a focus of her work.
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World Bank spent billions of dollars backing fossil fuels in 2022, study finds

By Foina Harvey   09/12/23  
The World Bank poured billions of dollars into fossil fuels around the world last year despite repeated promises to refocus on shifting to a low-carbon economy, research has suggested.
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2023 Worst Year On Record For Billion-Dollar Climate Disasters, NOAA Says

By Robert Hart   09/12/23  
This year is already the worst year on record for billion-dollar climate disasters in the U.S., a report from the National Oceanic and Atmospheric Administration (NOAA) said, as experts warn that extreme events are likely…
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Our climate change debates are out of date

By Noah Smith   09/08/23  
Solar and batteries are going to win, and our thinking needs to adjust accordingly.
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FEMA allocates $3B for climate change as Congress stalls on disaster fund

By Jacob Knutson   08/28/23  
The Biden administration announced on Monday nearly $3 billion in funding for hundreds of communities across the U.S. to reduce their vulnerability to climate-change-influenced extreme weather events. Why it matters: The new money for resilience…
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Climate Risks Loom Over Panama Canal, a Vital Global Trade Link

By Somini Sengupta   08/25/23  
Drought, aggravated by the burning of fossil fuels, is slowing down the ship traffic that carries goods in and out of the United States through the slender and vital Panama Canal, while heat and drought…
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The staying power of fossil fuel subsidies

By Ben Geman   08/25/23  
Well over a decade after high-profile international vows to rein in subsidies for producing and using fossil fuels, they remain deeply woven into government policies. Driving the news: Two new reports reach similar conclusions, 14…
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Milton Friedman’s Alma Mater Exposes Huge Cost of Emissions

By Frances Schwartzkopff   08/24/23  
A study published by academics at the University of Chicago has found that corporate emissions are undermining prosperity. The damage caused when publicly traded companies emit greenhouse gases is equivalent — on average — to…
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The Trillions of Dollars Forgotten When Tracking the Energy Transition

By Nathaniel Bullard   08/17/23  
Last year, global energy transition investment topped $1.1 trillion, according to BloombergNEF. The International Energy Agency, using a more expansive definition of energy transition, tracked $1.7 trillion dollars in 2022. With 2023’s wind and solar…
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The richest Americans account for 40 percent of U.S. climate emissions

By Kasha Patel   08/17/23  
The richest 10 percent of U.S. households are responsible for 40 percent of the country’s greenhouse gas emissions, according to a study released Thursday in PLOS Climate. The study, which looked at how a household’s…
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Celebrating the Investment Reverberation Act

08/16/23  
Sure, inflation has been reduced from 8.3% to 3.2% since the passage a year ago of the “Inflation Reduction Act” (IRA). But the intended purpose of the IRA was bigger than short-term inflation reduction. Its…
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A Year Into Biden’s Climate Agenda, the Price Tag Remains Mysterious

By Leslie Kaufman   08/16/23  
It’s been exactly one year since President Joe Biden signed the Inflation Reduction Act, securing a core part of his domestic agenda with what’s by far the most significant climate law in US history. There’s…
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I Turned My House Into a Zero-Carbon Utopia

By Leah C. Stokes   08/14/23  
Last April, I decided to break up with my gas company. It wasn’t me; it was them. Like so many other fossil-fuel companies, SoCalGas was lobbying against clean energy while it continued to spew carbon…
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Clean Economy Works | IRA One-Year Review

08/14/23  
One year after the Inflation Reduction Act (IRA) was signed into law on August 16, 2022, private industry has announced at least 210 major new clean energy and clean vehicle projects across the country, according…
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Bankers Hate Saying ‘ESG’ But Are Hardwiring It Into Finance

By Alastair Marsh and Lisa Pham   08/14/23  
Bankers, money managers and other financial market participants are starting to loathe the label “ESG” — but they’re also sticking with the strategy, according to a Bloomberg survey.
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GOP Effort to Curb ESG Fails to Yield Concrete Results So Far

By Tim Quinson   08/02/23  
For all of the Republican Party’s furious opposition to ESG, its efforts to accomplish something on the legislative front have fallen short.
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One Year Of Our Clean Energy Boom

07/25/23  
Since the Inflation Reduction Act (IRA)'s landmark climate and clean energy investments became law in August 2022, companies have been racing forward with massive investments to build our clean energy future. New manufacturing in wind,…
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Climate Change Is Upending Farmers’ Livelihoods — and Exacerbating a Mental Health Crisis

By Mélissa Godin   07/17/23  
When Mike Rosmann, an Iowa farmer and psychologist, heard his phone ring on a spring morning in 2019, he knew he had to answer. In the previous four months, his state had experienced the wettest…
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Zombie Wells, Part 1: Texas oil wells are leaking toxic waste, and no one wants to pay to clean it

By Amanda Drane   07/17/23  
Mesquite waved in the breeze at Antina Ranch as well control specialist Hawk Dunlap dipped a stick into a hole in the ground and smelled it. “See?” he asked, extending the stick.
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FEMA set to run out of money before peak hurricane season

By Jacob Knutson   07/15/23  
The federal government's disaster relief fund is on pace to run out of money at the height of both the hurricane and wildfire seasons, a top official warned this week. Why it matters: Government funding…
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More than $2 billion committed at UK-US climate finance forum

07/11/23  
Finance leaders, companies and philanthropists have committed more than $2 billion to help finance efforts to reduce carbon emissions and boost climate resilience across Africa, Asia and Latin America, a joint UK-U.S. statement said on…
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Extreme heat will cost the U.S. $1 billion in health care costs — this summer alone

By Zoya Teirstein   07/10/23  
Extreme heat — summertime temperatures and humidity that exceed the historical average — is being made more frequent and intense by climate change. In the first two weeks of June, a late-spring hot spell prompted…
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They opposed the infrastructure law. Now, some in the GOP court its cash

By Tony Romm   07/09/23  
When the Biden administration awarded Alabama roughly $1.4 billion in late June to expand high-speed internet access across the state, its senior Republican senator rejoiced.
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The planet heats, the world economy cools – the real global recession is ecological

By Larry Elliott   07/09/23  
First it was the pandemic. Then it was the war in Ukraine. Next it could be the climate crisis. On Monday last week the world registered its hottest-ever day but the record lasted only 24…
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Oil giant Shell warns cutting production ‘dangerous’

By Simon Jack   07/07/23  
Cutting oil and gas production would be "dangerous and irresponsible", the boss of energy giant Shell has told the BBC. Wael Sawan insisted that the world still "desperately needs oil and gas" as moves to…
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Labor market impacts of destructive California wildfires

07/01/23  
The severity and destruction of wildfires in California have increased in magnitude every decade since the late 1900s. Some researchers have studied the impacts of wildfires on people’s health and earnings and on the environment,…
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A hail-battered June adds to billions in U.S. storm damage this year

By Bob Henson   06/29/23  
Countless thousands of Americans this month found themselves racing for cover, fretting about cars and roofs, and covering their ears from the deafening roar of heavy hail. Time and again this spring, and especially during…
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A Renowned Economist’s New Idea for Stopping Climate Change

By Peter Coy   06/26/23  
Robert Litterman is a legend on Wall Street. He earned a doctorate in economics from the University of Minnesota in 1980. In his 23 years at Goldman Sachs he oversaw quants, managed risk and developed,…
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Larry Fink “ashamed” to be part of ESG political debate

By John Frank   06/25/23  
BlackRock CEO Larry Fink said he's no longer using the term "ESG" (environment, social and governance) because it is being politically "weaponized" and he's "ashamed" to be part of the debate on the issue.
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