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

Western States Could Make Billions Selling Renewable Energy, But They’ll Need a Lot More Regional Transmission Lines – Inside Climate News

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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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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Image By CCR + AI
Highlight Article

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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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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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

Biden to nominate Ajay Banga to lead World Bank

By Hans Nichols   02/23/23  
President Biden will nominate Ajay Banga, former president and CEO of Mastercard, to serve as president of the World Bank, the White House announced today.
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Where U.S. house prices may be most overvalued as climate change worsens

By Brady Dennis   02/16/23  
The nation’s real estate market has yet to fully account for the increasing threats to millions of homes from rising seas, stronger storms and torrential downpours, according to new research published Thursday.
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Chairman Whitehouse Statement on CBO Outlook

02/15/23  
Today, Senator Sheldon Whitehouse, Chairman of the Senate Budget Committee, issued a statement following the annual release of the Congressional Budget Office’s (CBO) Budget and Economic Outlook and a projection that the debt limit must…
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World Bank president, dogged by climate questions, will step down early

By David Gelles   02/15/23  
David Malpass, under fire for months by critics who accused him of climate denialism, said he would resign in June, a year before his term ends....
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Electric vehicle sales top $1 trillion in wake-up call for carmakers

By Colin McKerracher   02/14/23  
Global spending on electric vehicles is surging. According a new report published by BloombergNEF on investment in the energy transition, annual spending on passenger EVs hit $388 billion in 2022, up 53% from the year…
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Biden earmarks billions for rooftop solar under climate law

By Jennifer A Dlouhy   02/14/23  
In the government’s initial moves to allocate the $27 billion Greenhouse Gas Reduction Fund, it gave home and community solar a boost but dodged a decision on creating a national green bank.
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A Huge, Uncharted Experiment on the U.S. Economy Is About to Begin

By Robinson Meyer   02/12/23  
If you want to understand the immense windfall the Biden administration is about to bestow on green industries, take a look at hydrogen. Engineers still aren’t exactly sure what role the gas will play in…
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Electric vehicles could match gasoline cars on price this year

By Jack Ewing   02/10/23  
Competition, government incentives and falling raw material prices are making battery-powered cars more affordable sooner than expected.
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Crisis year 2022 brought $134 billion in excess profit to the West’s five largest oil and gas companies

02/09/23  
The global oil and gas industry saw historic gains from the fallout of the war in Ukraine, a global energy crisis and runaway climate change, as millions suffer the consequences.
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Five powerhouse, economically friendly policies that can slash emissions

By Sarah Spengeman   02/07/23  
Minnesota just passed a 100% clean electricity bill with one of the country’s fastest timelines to make the switch—by 2040. With its rich wind resources, a surprising amount of solar, and a strong clean energy…
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Big Oil is making billions, but don’t expect lower gas prices

By Kyra Buckley   02/03/23  
Exxon Mobil: $55.7 billion. Shell: $42.3 billion. Chevron: $35.5 billion. ConocoPhillips: $18.7 billion. As expected, oil companies are reporting blockbuster profits for 2022. But directing those profits in a way that shields consumers from chaotic…
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The man in charge of how the US spends $400bn to shift from fossil fuels

By Oliver Milman   02/03/23  
The Department of Energy’s loan programs office was ‘essentially dormant’, says Jigar Shah, its head – but now it’s ready to bankroll clean energy projects.
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Oil companies and the windfalls of war

By Joel Stronberg   02/03/23  
Putin’s war on Ukraine is approaching its one-year anniversary, with little to suggest it will be stopping any time soon. Looking at the…...
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This group is sharpening the GOP attack on ‘woke’ Wall Street

By Steven Mufson   01/30/23  
Consumers’ Research, bolstered by millions in undisclosed donations, targets investment firms and their evaluation of climate risks.
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‘Recession resilient’ climate start-ups shine in tech downturn

By Erin Griffith   01/30/23  
Tech workers and investors are flocking to start-ups that aim to combat climate change.
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How vulnerable is Wall Street to climate change? The Fed wants to find out

By Jake Bittle   01/21/23  
Regulators have long known that climate change poses a threat to the U.S. financial system. Major disasters like hurricanes and wildfires can wipe out buildings and crops, causing losses for the banks that make loans…
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National Academies’ Roundtable on Macroeconomics and Climate-Related Risks and Opportunities to Hold First Public Meeting on Jan. 23

01/20/23  
A new roundtable convened by the National Academies of Sciences, Engineering, and Medicine will hold its first public meeting on Jan. 23 to discuss challenges associated with incorporating the risks and opportunities presented by climate…
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White House Aims to Reflect the Environment in Economic Data

By Lydia DePillis   01/20/23  
The Biden administration has set out to measure the economic value of ecosystems, offering new statistics to weigh in policy decisions....
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Clean Energy Powers American Business

01/20/23  
Corporations purchased more clean energy in 2022 than any previous year, which is driving up demand for American clean energy and accelerating the clean energy transition.
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Wind Farms Deliver Economic Jolt to Rural Middle America

By Tim Henderson   01/18/23  
A wind power boom in the nation’s central corridor has been a financial windfall for some struggling rural areas. Coke County, Texas, which has a population of about 3,300, had the biggest increase in economic…
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New Initiative to Help Unlock $3 Trillion Needed a Year for Climate and Nature

01/17/23  
Philanthropic giving totalled $810 billion in 2021, but just 2% went towards reducing emissions New initiative, Giving to Amplify Earth Action (GAEA), will leverage philanthropic capital to help generate the $3 trillion needed each year…
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US climate envoy John Kerry outlines new principles for accelerating private capital needed for the energy transition

By Atlantic Council   01/15/23  
The 2023 Forum will have a special focus on the challenge of managing energy security priorities and decarbonization efforts in tandem, including the continuing impact of the crisis in Ukraine on the energy transition. This…
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Low-carbon investments to rise by $60 billion in 2023 as inflation weakens; hydrogen and CCUS spending to surge

01/13/23  
Spending on low-carbon projects will increase by $60 billion this year, 10% higher than 2022, led by wind developments but helped by a significant rise in funding for hydrogen and carbon capture, utilization and storage…
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Panel on “Central Bank Independence and the Mandate—Evolving Views”

By Jerome H. Powell   01/10/23  
I will address three main points. First, the Federal Reserve's monetary policy independence is an important and broadly supported institutional arrangement that has served the American public well. Second, the Fed must continuously earn that…
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1 big thing: The Greenland Block’s influence

By Ben Geman and Others   12/08/22  
An extreme weather pattern is affecting conditions across the U.S. and Europe, specifically a powerful area of high pressure across Greenland and Hudson Bay, Andrew writes. This feature, known as a "Greenland Block," along with…
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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.
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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…
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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…
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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.
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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…
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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…
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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.
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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…
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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.
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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…
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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.
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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.
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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…
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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…
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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.…
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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…
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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…
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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.
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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.
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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…
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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.
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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…
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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.
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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…
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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…
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