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.

Click on any circle to learn about one of the billion-dollar weather events, or any state to learn about billion-dollar droughts, between January 2000 and January 2022. Source: National Oceanic and Atmospheric Administration’s National Climatic Data Center.

CREDIT: C2ES

CURRENT NEWS

KEY RESOURCES

Billion-Dollar Weather and Climate Disasters

10/06/22
Summary of U.S. billion-dollar weather and climate related disaster research, methodology, and data sources.

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

Kerry expects ‘very tricky’ year for climate fundraising

By Timothy Puko   12/08/22  
Fresh off some setbacks at a global climate summit, White House climate envoy John F. Kerry said he expects a challenging year ahead in raising the trillions of dollars necessary to address climate change.

BlackRock draws an activist investor who wants Fink out

By Andrew Ross Sorkin   12/07/22  
In recent years, BlackRock has become one of the most prominent voices in support of investing in accordance with environmental, social and corporate governance — or E.S.G. — principles. That approach has drawn support from…

How to pay for climate justice when polluters have all the money

By Bill McKibben   11/19/22  
The climate summit just concluding in Egypt ran hard into one of the world’s greatest structural problems: most of the money is in the Global North, but most of the need is in the Global…

Will Taxing the Windfall Profits of Oil Giants Fix Countries’ Economies?

By Patricia Cohen   11/18/22  
Major oil and gas companies have raked in multibillion-dollar profits at unheard-of levels. Households around the world are reeling from soaring energy prices, while governments are struggling with outsize spending and slowing economic growth.

How a ‘Carbon Cage’ Blocks Climate Mitigation

By Kate Ervine   11/18/22  
The majority of humans on the planet are now feeling the effects of climate breakdown. With the planet 1.2 degrees Celsius warmer than preindustrial levels, devastating wildfires, heat waves, floods, droughts and storms are increasingly…

Ed Markey: I’ll Organize Senate Dems to Demand World Bank Chief be Fired!

By Bill McKibben   11/11/22  
Amid the general chaos and tension of this climate summit—exacerbated by the fact that Joe Biden is speaking today—I sat down for a quiet twenty minutes with Massachusetts Senator Ed Markey. He’s arguably done as…

Studying climate change, sea level rise in Clearwater could prevent catastrophic damage, officials hope

By Regina Gonzalez   11/11/22  
The city of Clearwater has set out to understand how it will be impacted by climate change, sea level rise, and the devastation of tropical storms and hurricanes.

Clean Energy Is Booming. Now Here’s the Bad News

By Mitch Jones   11/09/22  
When it comes to building more clean energy, there’s good news all around. New wind and solar generation surged 22 percent this year, which is part of a longer-term trend. Environment America found that the…

Autumn/Winter 2022

11/07/22  
The lesson we can take from this special print issue is the need for everyone in the sector—investors, regulators, lawmakers, and developers—to be braver.

King oil reigns over American politics

By Meg Jacobs   11/05/22  
President Biden knows the political power of the price of gasoline. About two weeks ago, fearing what an uptick in gas prices might do to Democrats at the ballot box in the midterms, Mr. Biden…

Explainer: How can climate finance be increased from ‘billions to trillions’?

By Josh Gabbatiss   11/04/22  
From the moment in the early 1990s when nations began grappling with the threat posed by climate change, money has been at the heart of discussions.

Official: 2021 Colorado wildfire losses surpass $2 billion

10/27/22  
A wildfire that destroyed nearly 1,100 homes and businesses in suburban Denver last winter caused more than $2 billion in losses, making it by far the costliest in Colorado history, the state insurance commissioner said.

With Fossil Fuel Companies Facing Pressure to Reduce Carbon Emissions, Private Equity Is Buying Up Their Aging Oil, Gas and Coal Assets

By Nicholas Kusnetz   10/24/22  
When Continental Resources announced a deal last week to take the oil company private, it joined a trend that has swept across the fossil fuel sector in recent years. With investors agitating for energy companies…

Energy loss is single biggest component of today’s electricity system

By Karin Kirk   10/24/22  
Traditional electricity generation has a thermodynamics problem: Burning fuel to generate electricity creates waste heat that siphons off most of the energy. By the time electricity reaches your outlet, around two-thirds of the original energy…

Protecting Communities from Climate Change Is Astronomically Expensive

By Karen Savage and Others   10/24/22  
A proposed series of sea barriers to protect New York’s harbor—which includes parts of New Jersey— from future storm surges? $52 billion. Reducing risk of future damage to Rhode Island’s coast? More than $254 million.…

The World Bank and IMF say they’ll do more to address climate change

By Richard Clark and Others   10/21/22  
Climate change was at the fore of last week’s International Monetary Fund and World Bank annual meetings in Washington, D.C. Protesters gathered outside the meetings to demand that the two preeminent international financial institutions take…

China accidentally made our gas much cheaper

By Robinson Meyer   10/19/22  
You’d be forgiven, at this point, for believing in what the MSNBC host Chris Hayes calls the “gas prices monocausal theory” of American politics. Every major political dynamic, every twist and turn in approval polling…

World rocked by 29 billion-dollar weather disasters in 2022

by Jeff Masters   10/19/22  
Florida’s Hurricane Ian, a $20 billion drought and heat wave in Europe, and deadly floods in Pakistan are among the catastrophes so far this year.

Treasury Dept. to ask insurers for data on climate risks

By Ephrat Livni   10/18/22  
The department is proposing to gather information from across the country to establish where climate change is making property insurance unaffordable or inaccessible.

Natural gas pushes utility bills higher as the weather turns colder

10/17/22  
The price of energy for Pennsylvania utility customers is likely to rise again this winter, riding the general inflation trend and, more specifically, the steep increase in the price of natural gas. This impacts both…

Can renewables solve the inflation crisis?

By Dave Keating   10/12/22  
Rising energy costs have been the main cause of rising inflation worldwide. Experts say the low-carbon energy transition could bring inflation down.

Leonard Leo Pushed the Courts Right. Now He’s Aiming at American Society.

By Kenneth P. Vogel   10/12/22  
Millions of dollars in television advertisements blasting schools for teaching critical race theory and assailing corporations like BlackRock, Uber and American Airlines for catering to “woke politicians.” A lawsuit pending before the Supreme Court to…

Ian is 15th billion-dollar disaster this year so far

10/11/22  
The U.S. was hit with 15 separate billion-dollar weather and climate disasters in the first nine months of the year, according to scientists from NOAA’s National Centers for Environmental Information.

Climate change plays role in home buyers’ and sellers’ decisions

By Sheri Koones   10/07/22  
Frances Anderton has covered Los Angeles design and architecture in print, podcasts, exhibitions, and at public events. For many years Anderton is well known in LA as the host of DnA: Design and Architecture, broadcast…

How Will OPEC’s Oil Production Cuts Affect Gas Prices and Inflation?

By David Mchugh   10/07/22  
Major oil-producing countries led by Saudi Arabia and Russia have decided to slash the amount of oil they deliver to the global economy. And the law of supply and demand suggests that can only mean…

The climate economy is about to explode

By Robinson Meyer   10/05/22  
Late last month, analysts at the investment bank Credit Suisse published a research note about America’s new climate law that went nearly unnoticed. The Inflation Reduction Act, the bank argued, is even more important than…

board of governors of the federal reserve system

10/04/22  
Federal Reserve Board finalizes updates to the Board’s rule concerning debit card transactions Agencies announce forthcoming resolution plan guidance for large banks and deliver feedback on resolution plan of Truist Financial Corporation

6 biggest U.S. banks to face climate tests in 2023

By Avery Ellfeldt   09/30/22  
The Federal Reserve soon will require that the six largest U.S. banks gauge the threats they face from climate change — and then adjust their business strategies accordingly. The central bank said Thursday its long-awaited…

Wealthiest 10% Responsible for Nearly 50% of Greenhouse Gas Emissions, Study Finds

By Olivia Rosane   09/30/22  
The paper, published in Nature Sustainability Thursday, looked at the difference in per-capita emissions across the global economic spectrum between 1990 and 2019. During this time, the top one percent of emitters were responsible for…

Hurricane Ian’s Devastation Shows the Challenge of Pricing Climate Risk

By Ephrat Livni   09/29/22  
Hurricane Ian, now downgraded to a tropical storm, is expected to inflict as much as $40 billion in property damage claims and much higher total economic losses, RBC Capital Markets analysts calculated in an early…

Federal Reserve Board announces that six of the nation’s largest banks will participate in a pilot climate scenario analysis exercise

09/29/22  
The Federal Reserve Board on Thursday announced that six of the nation's largest banks will participate in a pilot climate scenario analysis exercise designed to enhance the ability of supervisors and firms to measure and…

Head of World Bank under pressure after White House condemns his ‘climate denial’ comments

By Fiona Harvey   09/25/22  
David Malpass, president of the World Bank, faces an uncertain future this week, after the White House joined a chorus of influential figures in condemning his apparent climate denialism. Malpass remains in post for now…

World Bank’s Malpass faces calls to resign after climate change doubts

By Valerie Volcovici and Others   09/22/22  
World Bank President David Malpass came under heavy criticism on Wednesday after he declined to say whether he accepts the scientific consensus on global warming, rekindling concerns about the bank's lack of a deadline to…

The green IT revolution: A blueprint for CIOs to combat climate change

By Gerrit Becker and Others   09/15/22  
Companies and governments looking to combat climate change are turning to tech for help. AI, new technologies, and some promising tech-driven business models have raised hopes for dramatic progress.

Yvon Chouinard Just Gave Patagonia Away to Help the Environment

By Katherene Martinko   09/15/22  
Yvon Chouinard no longer owns Patagonia. Nearly 50 years after founding the enormously successful apparel company, now worth around $3 billion, the 83-year-old came up with an unusual solution to ensure that it continues in…

Natural gas prices continue to rise: what it means for the United States

By Marcelo Gonzalez   09/13/22  
Natural gas prices have doubled in the past year, putting pressure on American companies and consumers, a sign of U.S. vulnerability to international price fluctuations. After a decade of marginal or negative returns, U.S. drillers…

There’s a New Cop on the Banking Beat: Chief Climate Risk Officer

By Emily Flitter   09/12/22  
The Office of the Comptroller of the Currency announced on Monday that Yue Chen would be the agency’s chief climate risk officer. Dr. Chen will focus on developing a new system to assess climate-driven risks…

Oil and Gas Assets at Risk

Dr. Zeke Hausfather and Others   09/11/22  
When shockwaves ripple across global oil and gas markets, local communities in oil- and gas-producing regions of the United States feel pronounced economic repercussions. While Russia’s war in Ukraine is currently stimulating public interest in…

‘Transformational’: could America’s new green bank be a climate gamechanger?

By Joan E Greve   09/11/22  
The Greenhouse Gas Reduction Fund provides $27bn in funding for projects aimed at lowering America’s planet-heating emissions. Some of those funds, roughly $7bn, will be dedicated to clean energy deployment in low-income communities – but…
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As cost of climate change rises, UN urges compensation

By Wanjohi Kabukuru   09/09/22  
From drought to floods and sea level rise, the cost of damage caused by climate change will only get higher as the world warms, sparking concerns from both top officials and activists about how to…

New study more than triples estimated costs of climate change damages

By Dana Nuccitelli   09/08/22  
A peer-reviewed analysis by two dozen experts more than triples – from $51 per ton of carbon dioxide to $185 per ton – the federal government’s estimate of the “social cost of carbon” (SCC)...

White House policies rescued U.S. economy, Treasury’s Yellen says

By Chelsey Cox   09/08/22  
Treasury Secretary Janet Yellen praised Biden administration’s economic policies Thursday during a speech at a Ford Motor Company electric vehicle plant in Michigan.

Analysis: BlackRock too green for Texas; rest of Wall Street okay – for now

By Ross Kerber and Others   08/31/22  
Most big Wall Street firms passed a test for business as usual in Texas last week when state Comptroller Glenn Hegar kept all but BlackRock Inc.(BLK.N) off a list of companies whose stance on boycotting…

Pace of Climate Change Sends Economists Back to Drawing Board

By Lydia DePillis   08/25/22  
Economists have been examining the impact of climate change for almost as long as it’s been known to science. In the 1970s, the Yale economist William Nordhaus began constructing a model meant to gauge the…

It costs nothing to leave our trees as they are

By Carole King   08/25/22  
My career as a songwriter began in Manhattan, not far from where I was born. When I moved to Los Angeles in 1968, I became part of the singer-songwriter community that coalesced around Laurel Canyon.…

20 million US homes are behind on energy bills

By Mark Chediak   08/23/22  
Adrienne Nice woke up early on the morning of July 25 to news she’d been dreading. The power company, Xcel Energy Inc., had shut off the electricity to the small Minneapolis apartment she shares with…

Chart: America’s surge of spending on clean energy

By Ben Geman   08/23/22  
A new report from the think tank RMI has a banger of a graphic that puts new and recent energy laws into historical context.

Trillions at risk because central banks’ climate models not up to scratch

By Peter Hannam   08/10/22  
Climate research finds modelling used cannot predict localised extreme weather, leading to poor estimations of risk.

Fighting inflation with climate action

By Manuela Andreoni   08/09/22  
Democrats this weekend muscled through what would be the biggest expenditure ever by the United States to slow global warming, but you wouldn’t necessarily know from the name of the measure that it had anything…

Trillions of dollars at risk because central banks’ climate models not up to scratch

By Peter Hannam   08/09/22  
Trillions of dollars may be misallocated to deal with the wrong climate threats around the world because the models used by central banks and regulators aren’t fit for purpose, a leading Australian climate researcher says.…