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

IEA expects global clean energy investment to hit $2 trillion in 2024

By Nina Chestney 06/06/24
Global investment in clean energy technology and infrastructure is set to hit $2 trillion this year, twice the amount going into fossil fuels, an International Energy Agency report showed.
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Vermont Moves to Hold Fossil-Fuel Companies Liable for Climate-Change Damage

By Elizabeth Kolbert 05/27/24
On July 10, 2023, Vermont’s state capital, Montpelier, was hit with more than five inches of rain. The city sits at the confluence of the main stream of the Winooski and its north branch; the…
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13 Ways of Looking at Biden’s New China Tariffs

By Robinson Meyer 05/14/24
The United States raised tariffs on a range of Chinese-made climate technologies on Tuesday, including electric vehicles, solar panels, and battery components.
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Earth911 Podcast: Consumer Reports’ Chris Harto On The Lifetime Cost Of Climate Change

By Mitch Ratcliffe 05/13/24
Consumer Reports and Breakthrough Energy recently put numbers on the social cost of carbon, calculating the cost for an American child born in 2024 due to climate change. They found that an American child will…
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Behind the billionaire climate tax

By Arielle Samuelson 04/25/24
The climate crisis is extremely unaffordable. That’s the conclusion of a new study published in Nature last week, which found that global warming will cost $38 trillion every year by 2050. For comparison, the entire…
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Ministers of Germany, Brazil, South Africa and Spain: why we need a global tax on billionaires

By Svenja Schulze and others 04/25/24
When the governors of the World Bank and the International Monetary Fund convened for the spring meetings last week, it was all about the really big questions. What can the international community do to accelerate…
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Nobel Prize-winning economist calls for climate tax on billionaires

By Arielle Samuelson 04/24/24
For the first time, the world’s most powerful countries are considering a proposal that would tax the super rich and send the money directly to the people on the front lines of the climate crisis.…
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Biden’s Climate Cash Is Finally Pouring In

By Robinson Meyer 04/23/24
It took a year and a half, but over the past month, money from the Inflation Reduction Act has started to flow out in earnest. Among the grants given just in the past four weeks…
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Western States Could Make Billions Selling Renewable Energy, But They’ll Need a Lot More Regional Transmission Lines

By Wyatt Myskow 04/18/24
The four western states that have traditionally exported large amounts of electricity generated with fossil fuels to neighboring states are poised to draw tens of billions of dollars by exporting clean energy across state lines,…
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Climate change will make you poorer, according to a new report

By Samantha Delouya 04/17/24
Record-breaking heat waves, severe floods and acute wildfires, exacerbated by climate change, carry a colossal price tag: an approximately 19% reduction in global income over just the next 26 years, a new study published Wednesday…
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New study calculates climate change’s economic bite will hit about $38 trillion a year by 2049

By Seth Borenstein 04/17/24
Climate change will reduce future global income by about 19% in the next 25 years compared to a fictional world that’s not warming, with the poorest areas and those least responsible for heating the atmosphere…
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The economic commitment of climate change

By Maximilian Kotz, Anders Levermann and Leonie Wenz 04/17/24
Global projections of macroeconomic climate-change damages typically consider impacts from average annual and national temperatures over long time horizons. Here we use recent empirical findings from more than 1,600 regions worldwide over the past 40 years…
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KEY RESOURCES

Billion-Dollar Weather and Climate Disasters

02/28/24
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

Climate Change Could Cost Each American Born Today $500,000

By Scott Medintz   04/16/24  
You might have heard that climate change costs the U.S. economy hundreds of billions of dollars a year. Or that globally it’s expected to cause trillions worth of damage annually by 2050.
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Biden administration finalizes lightbulb efficiency rules

By Zack Budryk   04/12/24  
The Biden administration on Friday finalized lightbulb efficiency rules first proposed in late 2022. The final rule will more than double the required efficiency level for the most common lightbulbs, from 45 lumens (the unit…
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Union for Reform Judaism pledges to divest millions from fossil fuel industry

By Asaf Elia-Shalev   04/11/24  
The organization representing the largest American Jewish denomination is pledging to divest from the fossil fuel industry as a response to the climate crisis.
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Enverus Says Peak Oil Won’t Happen Before 2030 as EV Impacts Ebb

By Tope Alake   04/10/24  
Global oil demand won’t peak before the end of this decade because of underwhelming fuel economy standards and slowing adoption of electric vehicles in the US, energy researcher Enverus says.
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Dimon Calls Push to Stop All Oil and Gas Enormously Naïve

By Ruth Liao   04/08/24  
Jamie Dimon said US delays of liquefied natural gas projects were done for political reasons to pacify those who believe oil and gas projects should simply be stopped — a position he calls “wrong” and…
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RBC joins Citi, JPMorgan in disclosing green financing ratios

By Lamar Johnson   04/05/24  
New York City Comptroller Brad Lander announced Thursday that the Royal Bank of Canada agreed to a shareholder proposal from his office to disclose its clean energy financing ratios.
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Biden admin doles out $20B in “green bank” funding

By Ben Geman   04/04/24  
Biden officials just unveiled organizations that will receive $20 billion designed to flow into tens of thousands of clean energy and pollution-cutting projects nationwide. Why it matters: The "Greenhouse Gas Reduction Fund" is the largest…
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The Biden Administration Is Unleashing $20 Billion for Green Banks

By Emily Pontecorvo   04/04/24  
Vice President Kamala Harris and EPA administrator Michael Regan are in Charlotte, North Carolina this morning to announce the award of … wait for it … $20 billiondollars for climate mitigation and adaptation projects. This…
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Fed Blocks Tough Global Climate Rules for Wall Street Banks

By Alastair Marsh   04/03/24  
US regulators, led by the Federal Reserve, have thwarted a push to make climate risk a focus of global financial rules, according to people familiar with the matter. European central bankers have been advocating for…
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Higher temperatures mean higher food and other prices. A new study links climate shocks to inflation

By Seth Borenstein   03/22/24  
Food prices and overall inflation will rise as temperatures climb with climate change, a new study by an environmental scientist and the European Central Bank found. Looking at monthly price tags of food and other…
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Global warming and heat extremes to enhance inflationary pressures

By Maximilian Kotz   03/21/24  
Climate impacts on economic productivity indicate that climate change may threaten price stability. Here we apply fixed-effects regressions to over 27,000 observations of monthly consumer price indices worldwide to quantify the impacts of climate conditions…
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U.S. Approves $500 Million for Bahrain Oil Project, Despite Opposition

By Hiroko Tabuchi   03/14/24  
A federal bank that finances projects overseas voted Thursday to put $500 million toward an oil and gas project in Bahrain, a transaction that critics said was out of step with President Biden’s climate commitments.
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Global supply chains amplify economic costs of future extreme heat risk

By Yida Sun and others   03/13/24  
Evidence shows a continuing increase in the frequency and severity of global heatwaves1,2, raising concerns about the future impacts of climate change and the associated socioeconomic costs3,4. Here we develop a disaster footprint analytical framework…
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Carbon Markets Test the Limits of Voluntary Action

By Alastair Marsh   03/06/24  
The limits of voluntary climate action are evident everywhere you look. Every day it seems there’s another company scaling back its sustainability ambitions or another investment firm pulling out of industry coalitions set up to…
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US banks abandon ‘bare minimum’ environmental standards project, alarming climate groups

By Nina Lakhani and Dominic Rushe   03/05/24  
Four of the world’s biggest banks have left the Equator Principles, a set of minimum industry standards and safeguards for financial institutions to address environmental and social risks in countries where they finance fossil fuel…
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The most epic (and literal) gaslighting of all time

By Bill MCKibben   03/05/24  
I’m listening to John Coltrane through my headphones as I type, in an effort to stay calm enough that I don’t just start sputtering. You might want to do likewise as you read.
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A Carbon Tax Is Back on the Table

By Matthew Zeitlin   03/04/24  
Climate policy has been all over the place lately thanks to pressure from interest groups, pre-election jitters, and the plausibility of a re-elected President Donald Trump laying waste to existing climate policy. But further in…
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Exxon CEO blames public for failure to fix climate change

By Saul Elbein   02/28/24  
The world isn’t on track to meet its climate goals — and it’s the public’s fault, a leading oil company CEO told journalists. Exxon Mobil Corp. CEO Darren Woods told editors from Fortune that the…
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We are taking a devastating risk with the green energy sector – one that might cost us our future

By Brett Christophers   02/27/24  
We are living through perhaps the biggest and most important policy experiment in human history, without even being aware of it: we have been relying primarily on the private sector to put an end to…
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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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The power of climate-focused investing

By Ellen Dorsey   02/23/24  
The Feb. 21 editorial, “Investor climate activism isn’t working,” claimed that the divest-invest movement “has proved irrelevant or even counterproductive.” That’s dismissive of the thousands of students, teachers, doctors, mayors, union workers, faith leaders, pension…
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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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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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Plastic chemicals linked to $249 billion in US health care costs in 2018 alone, study finds

By Sandee LaMotte   01/11/24  
By contributing to the development of chronic disease and death, a group of hormone-disruptive plastic chemicals is costing the US health care system billions — over $249 billion in 2018 alone, a new study found.
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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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