In case you think I'm panicing, the New York Times catches up with me in U.S. Warns Climate Poses ‘Emerging Threat’ to Financial System by Alan Rappeport and Christopher Flavelle:
Climate change is an “emerging threat” to the stability of the U.S. financial system, top federal regulators warned in a report on Thursday, setting the stage for the Biden administration to take more aggressive regulatory action to prevent climate change from upending global markets and the economy.Below the fold, an even more depressing update.
Higher temperatures are leading to more natural disasters, such as hurricanes, wildfires and floods. These, in turn, are resulting in damaged property, lost income and disruptions to business activity that threaten to alter how assets, such as real estate, are valued.
At the same time, the move away from fossil fuels could cause a sudden drop in the price of stocks and other assets tied to oil, gas, coal and other energy companies, or sectors that rely on them such as carmakers and heavy manufacturing. Such a shift could hurt the stock market, retirement savings and other parts of the financial sector.
The report from the Financial Stability Oversight Council wasn't the only one released this week. The Director of National Intelligence released the National Intelligence Estimate on Climate Change. The report's key takeaways are:
We assess that climate change will increasingly exacerbate risks to US national security interests as the physical impacts increase and geopolitical tensions mount about how to respond to the challenge. Global momentum is growing for more ambitious greenhouse gas emissions reductions, but current policies and pledges are insufficient to meet the Paris Agreement goals. Countries are arguing about who should act sooner and competing to control the growing clean energy transition. Intensifying physical effects will exacerbate geopolitical flashpoints, particularly after 2030, and key countries and regions will face increasing risks of instability and need for humanitarian assistance.
- As a baseline, the IC uses the US Federal Scientific community’s high confidence in global projections of temperature increase and moderate confidence in regional projections of the intensity of extreme weather and other effects during the next two decades. Global temperatures have increased 1.1 ̊C since pre-industrial times and most likely will add 0.4 ̊C to reach 1.5 ̊C around 2030.
- The IC has moderate confidence in the pace of decarbonization and low to moderate confidence in how physical climate impacts will affect US national security interests and the nature of geopolitical conflict, given the complex dimensions of human and state decisionmaking.
Fossil fuel production planned by the world’s governments “vastly exceeds” the limit needed to keep the rise in global heating to 1.5C and avoid the worst impacts of the climate crisis, a UN report has found.That is a very scary graph.
Despite increasing pledges of action from many nations, governments have not yet made plans to wind down fossil fuel production, the report said. The gap between planned extraction of coal, oil and gas and safe limits remains as large as in 2019, when the UN first reported on the issue. The UN secretary general, António Guterres, called the disparity “stark”.
The report, produced by the UN Environment Programme (Unep) and other researchers, found global production of oil and gas is on track to rise over the next two decades, with coal production projected to fall only slightly. This results in double the fossil fuel production in 2030 that is consistent with a 1.5C rise.
Mark Sumner writes:
In particular, the sharply dropping cost of electricity from solar and wind—along with the increasing popularity of electric cars—places fossil fuels of all types in a unique bind. Prices may be high at the moment on speculation over near-future demands from China, but all those fuels—coal, oil, and natural gas—could lose value almost overnight. To a large extent, this has already happened with coal, with 11 of the top U.S. mining companies going through bankruptcy after the industry dropped sharply from 2008 peaks.Patricia Espinosa, executive secretary of the UN Framework Convention on Climate Change, said:
The whole fossil fuel sector could see much of its value erased as demand for those fuels crashes and investors take flight. Considering the size and value currently assigned to some of these companies, such a shift could not just spell doom for the fossil fuel corporations, but leave state governments, retirement funds, and individual investors holding the (suddenly empty) bag. Homes in areas dedicated to coal mining or oil and gas drilling could become worthless. So could massive refineries, giant port facilities, and thousands of miles of pipeline.
How those things are managed when the companies that once profited from them are no longer around is unclear. So is what to do about thousands of people stranded in areas that have lost their economic engine.
“We’re really talking about preserving the stability of countries, preserving the institutions that we have built over so many years, preserving the best goals that our countries have put together. The catastrophic scenario would indicate that we would have massive flows of displaced people.”
The impact would cascade, she said, adding: “It would mean less food, so probably a crisis in food security. It would leave a lot more people vulnerable to terrible situations, terrorist groups and violent groups. It would mean a lot of sources of instability.”
The weighted average Energy Return On Investment (EROI) has declined by a factor of around 5 in the past 70 years. On average, only about 85% of the energy coming out of the ground makes it into the pipelines. But the 15% also represents carbon emissions. The 85% is projected to be around 65% by 2050. Thus even if the plans in the UN report's graph were to come to fruition, and the temperature thus to rise nearly 3 ̊C, the amount of usable energy from fossil fuels would decrease.
|Delannoy et al Fig 1|
Our findings question the feasibility of a global and fast energy transition, not in terms of stocks of energy resources, but in terms of flows. They imply that either the global energy transition takes place quickly enough, or we risk a worsening of climate change, a historical and long-term recession due to energy deficits (at least for some regions of the globe), or a combination of several of these problems. In other terms, we are facing a three-way conundrum: an energy transition that seems more improbable every passing year, increasing environmental threats and the risk of unprecedented energy shortages and associated economic depression in less than two decades.The problem is that replacing fossil fuels with renewables requires energy input before they output energy. Ahmed writes:
So if we delay the clean energy transformation for too long, there might not be enough energy to sustain the transition in the first place — leading to a ‘worst of all worlds’ scenario: the collapse of both the fossil fuel system and the ability to create a viable alternative.There is a small ray of hope. Empirically grounded technology forecasts and the energy transition by Way et al shows that:
if solar photovoltaics, wind, batteries and hydrogen electrolyzers continue to follow their current exponentially increasing deployment trends for another decade, we achieve a near-net-zero emissions energy system within twenty-five years. In contrast, a slower transition (which involves deployment growth trends that are lower than current rates) is more expensive and a nuclear driven transition is far more expensive.Delannoy et al may have underestimated both the rate and the energy demands of deploying renewables.
So how are government's "slow AIs" responding to this barrage of warnings? Here are Justin Rowlatt & Tom Gerken reporting for the BBC in COP26: Document leak reveals nations lobbying to change key climate report:
The leak reveals Saudi Arabia, Japan and Australia are among countries asking the UN to play down the need to move rapidly away from fossil fuels.And the UN report:
It also shows some wealthy nations are questioning paying more to poorer states to move to greener technologies.
This "lobbying" raises questions for the COP26 climate summit in November.
The leak reveals countries pushing back on UN recommendations for action and comes just days before they will be asked at the summit to make significant commitments to slow down climate change and keep global warming to 1.5 degrees.
found that countries have directed more than $300bn (£217bn) of new public finance to fossil fuel activities since the beginning of the Covid-19 pandemic, more than that provided for clean energy.A major benficiary of these taxpayer subsidies is coal millionaire Joe Manchin, currently preventing the US government taking action to reduce carbon emissions:
Joe Manchin, the powerful West Virginia Democrat who chairs the Senate energy panel and earned half a million dollars last year from coal production, is preparing to remake President Biden’s climate legislation in a way that tosses a lifeline to the fossil fuel industry — despite urgent calls from scientists that countries need to quickly pivot away from coal, gas and oil to avoid a climate catastrophe.So what about corporate "slow AIs"? Of all the corporate "slow AIs" the insurance industry's ones should be the most worried, since they'll be on the hook for a lot of the costs. But The Oil Merchant in the Gray Flannel Suit by Alexander Sammon explains
One would think, then, that the insurance industry would be among the most forceful advocates for large-scale intervention on climate change, based on, if nothing else, that good old market homily that is self-interest. The losses keep mounting in the absence of aggressive measures. Either the federal government, in tandem with private investment, pays for a major decarbonization program, or the insurance companies pay for the cleanup. That shouldn’t be a tough decision for a bunch of fund managers to make.The "slow AIs" are OK making "tepid statements", but what they are doing is much worse:
Furthermore, because of their clout and institutional power, one would also assume that if insurers put their mind to it, they could be unusually effective advocates for a green transition. Just about the only time anything gets done in Washington is in those rare moments when a corporation or industry decides they want it to happen. That could be the legacy of insurance companies and climate change.
And yet insurers have not been terribly vocal about the climate crisis. In fact, they’ve been highly resistant to even small-bore climate solutions, instead opting for tepid statements about environmental sustainability.
But by loading up on stocks of oil and gas companies and energy utilities, purchasing corporate debt of coal and other fossil fuel firms, and underwriting the development of new infrastructure like pipelines and plants, much of which is being done at record rates, the insurance industry is currently propping up the industry that is expediting its own demise. Insurance companies are financially vulnerable to the ravages of climate change, but they also happen to be profiting off of its acceleration.Some insuurers' statements are a bit less tepid. Here is Peter Giger, Group Chief Risk Officer, Zurich Insurance Group writing for the World Economic Forum:
We need to act now on our climate. Act like these tipping points are imminent. And stop thinking of climate change as a slow-moving, long-term threat that enables us to kick the problem down the road and let future generations deal with it. We must take immediate action to reduce global warming and fulfil our commitments to the Paris Agreement, and build resilience with these tipping points in mind.But notice that the call to urgent action is addressed to "we". There's nothing in his post about actions that Zurich Insurance Group is going to take.
We need to plan now to mitigate greenhouse gas emissions, but we also need to plan for the impacts, such as the ability to feed everyone on the planet, develop plans to manage flood risk, as well as manage the social and geopolitical impacts of human migrations that will be a consequence of fight or flight decisions.
And of course the fossil fuel "slow AIs" are hard at work preventing action, as Hiroko Tabuchi reports in In Your Facebook Feed: Oil Industry Pushback Against Biden Climate Plans:
The ads appear on Facebook millions of times a week. They take aim at vulnerable Democrats in Congress by name, warning that the $3.5 trillion budget bill — one of the Biden administration’s biggest efforts to pass meaningful climate policy — will wreck the United States economy.The Economist has a long article examining the prospects for the upcoming COP26 conference, hosted by Britain's buffoon of a Prime Minister. It is entitled Broken promises, energy shortages and covid-19 will hamper COP26 and reaches this conclusion:
The paid posts are part of a broad attack by the oil and gas industry against the budget bill, whose fate now hangs in the balance. Among the climate provisions that are likely to be left out of the plan is an effort to dismantle billions of dollars in fossil-fuel tax breaks — provisions that experts say incentivize the burning of fossil fuels responsible for catastrophic climate change.
On Thursday, details emerged of an agreement between Senator Chuck Schumer of New York, the majority leader, and Senator Joe Manchin III of West Virginia, a Democrat with huge sway in the divided Senate who has said he doesn’t support such an expansive bill. According to a memo outlining the agreement, first obtained by Politico, Mr. Manchin said that if the legislation were to include extensions of smaller tax credits for wind and solar power, it shouldn’t undo tax breaks for fossil fuel producers.
Any progress made at COP26 will probably be incremental, not a “big leap” of the sort John Kerry, America’s climate envoy, has promised. That will enrage grassroots activists. And it hardly matches the scale of the challenge. Two years from now a “Global Stocktake” scheduled under the Paris agreement will examine how well governments are implementing their climate plans. If their most recent climate promises are any indication, the stocktake could reveal a rather bare cupboard.How do you think you'll manage in a world 2.5-3 ̊C hotter? You'd better start figuring it out, because that's where we are heading.
The World Meteorological Organization's Greenhouse Gas Bulletin: Another Year Another Record reports:
“The Greenhouse Gas Bulletin contains a stark, scientific message for climate change negotiators at COP26. At the current rate of increase in greenhouse gas concentrations, we will see a temperature increase by the end of this century far in excess of the Paris Agreement targets of 1.5 to 2 degrees Celsius above pre-industrial levels,” said WMO Secretary-General Prof. Petteri Taalas. “We are way off track.”
“The amount of CO2 in the atmosphere breached the milestone of 400 parts per million in 2015. And just five years later, it exceeded 413 ppm. This is more than just a chemical formula and figures on a graph. It has major negative repercussions for our daily lives and well-being, for the state of our planet and for the future of our children and grandchildren,” said Prof. Taalas
Before panicking, you should notice that today oil, gas, coal are invaluable raw materials for chemical industry rather that mere fuel :) - With my best regards, Natasha
The headline for Darren Boyle, Shekar Bhatia and Rory Tingle's article sums it up. Hypocrite airways? Jeff Bezos's £48m Gulf Stream leads parade of 400 private jets into COP26 including Prince Albert of Monaco, scores of royals and dozens of 'green' CEOs - as huge traffic jam forces empty planes to fly 30 miles to park.
For Julia Jacobo's COP26 report card: How the world's largest emitters are faring on climate goals it is the subhead:
"Not one country is on track to meet its goal heading into the summit".
Not accounting for externalities is a problem for climate policy. John Timmer reports that Pushing renewable power immediately could save trillions in health costs:
"The researchers' results say that, even if you ignore the climate benefits, moving away from fossil fuels rapidly would lead to benefits that, in the US alone, can add up to trillions of dollars before the century is over.
The authors state that we now have an "improved understanding of the human health impacts of exposure to both heat and air pollution." This turns out to be critical, since health impacts are far and away the most costly of those considered."
Fiona Harvey's Cop26: world on track for disastrous heating of more than 2.4C, says key report confirms my pessimism:
"The world is on track for disastrous levels of global heating far in excess of the limits in the Paris climate agreement, despite a flurry of carbon-cutting pledges from governments at the UN Cop26 summit. Temperature rises will top 2.4C by the end of this century, based on the short-term goals countries have set out, according to research published in Glasgow on Tuesday.
the sobering assessment of a rise of 2.4C from Climate Action Tracker (CAT), the world’s most respected climate analysis coalition, was based on countries’ short-term goals for the next decade."
As Mike Ludwig reports in Biden Administration Will Hold US’s Largest Offshore Drilling Auction Days After COP26, the US "slow AI" isn't deterred by all the hot air from Glasgow:
"The Biden administration is preparing to auction off more than 80 million acres of the Gulf of Mexico to oil and gas drilling companies less than a week after the United Nations COP26 climate conference in Glasgow, Scotland, where global negotiations over plans to reduce fossil fuel emissions faced an official deadline on Friday.
The annual Gulf of Mexico lease sale planned for November 17 in New Orleans is the largest federal offshore drilling auction in United States history and comes just months after Hurricane Ida unleashed dozens of oil spills and petrochemical leaks from aging fossil fuel infrastructure near the Louisiana coast."
In Australian Prime Minister Scott Morrison doubles down on coal after COP26, Maite Fernández Simon reports on the Australian slow AI's response to the Glasgow fiasco:
"Australian Prime Minister Scott Morrison said the coal industry will be operating in the country for “decades to come,” in response to British Prime Minister Boris Johnson’s remarks that the agreement reached at the COP26 climate summit in Glasgow, Scotland, sounds “the death knell for coal power.”
“I don’t believe it did, and for all of those working in the coal industry in Australia, they will continue to be working in that industry for decades to come,” Morrison told a group of reporters Monday"
Why would anyone believe that a meeting chaired by Boris Johnson would produce anything but hot air?
How the wind power boom is driving deforestation in the Amazon by Francesc Badia i Dalmases starts:
"What does the deforestation of balsa wood in Ecuador’s Amazon region have to do with wind power generation in Europe? There is a perverse link between the two: a drive for renewable energy has boosted global demand for a prized species of wood that grows in the world’s largest rainforest. As Europe and China increase the construction of blades for wind turbines, balsa trees are being felled to accelerate an energy transition driven by the need to decarbonize the global economy."
Tip of the hat to Eric Loomis.
Paul Saffo tweets:
"The super-wealthy are forcing the rest of us to breathe their exhaust. Literally."
He points out that an 11-minute "space flight" emits 75 tonnes of carbon, more that the lifetime emissions of each of the poorest 1 billion humans.
Rob Horgan provides another "Slow AI" example in £30bn rail electrification plan blocked by Treasury:
"The Telegraph has reported that the Treasury has blocked Network Rail’s recommendations to accelerate electrification of the country’s railways, set out within the Traction Decarbonisation Network Strategy"
Tommy Greene provides another in Wales coalmine extension may soon be approved despite Cop26 pledges:
"According to Wales’s deputy climate change minister, Lee Waters, the Aberpergwm scheme could emit 100m tonnes of CO2 over its lifetime, along with considerable quantities of methane. He says the date of the licence means that new devolved powers – which came into force in 2018 and have been used to block new opencast mining applications – do not apply to this case. Waters has written to the Department for Business, Energy and Industrial Strategy, in which the Coal Authority is housed, to request the licence be cancelled."
K.E.D. Coan's Extreme weather could be as expensive as investing in cutting carbon ASAP reports on a new study that:
"is part of the largest effort so far to systematically model the costs and benefits of limiting warming outright. This is compared to allowing temperatures to surpass the Paris targets temporarily, and relying on massive removal of carbon dioxide in the second half of the century to compensate."
"projected the maximum effects on heatwave duration and frequency, drought frequency, energy demands (for heating and cooling), and crop loss for maize, rice, soybean, and wheat. Across all of these, there were negative impacts associated with each 0.1°C of warming. Overshoot scenarios were slightly worse than those that kept temperatures low—but the biggest factor was keeping overall temperature rise as low as possible.
The authors also aggregated estimates from other recent studies to explore the relationships between temperature and GDP growth, and to narrow projections down to a regional level (as opposed to global). From this analysis, they found that increases in heatwaves had the most severe impact, and that these disproportionately affected Brazil and West and Southern Africa."
Investors aren't worried about coal's carbon emissions, and companies' Slow AIs are paying attention. After major mining companies announced plans to abandon coal, The Economist describes what happened:
"Thungela’s shares, after a rocky start, quadrupled in value in a matter of months. Glencore, shortly after 94% of shareholders had approved its coal-reduction plans, bought out its joint-venture partners Anglo and BHP in a Colombian coal mine that will bolster its overall output from about 104m tonnes in 2021 to 122m tonnes within two years. BHP has reportedly put its retreat from thermal coal under review because of rising prices and changing investor attitudes. In a sign of the times, Bravus Mining and Resources, a subsidiary of the Adani Group, an Indian conglomerate, said on December 27th that it was about to export coal from the Carmichael mine in Australia for the first time. It has overcome a decade of opposition from environmentalists to bring the project to fruition.
Only concerted government action to tax carbon emissions and redesign energy systems will kill off king coal."
Ben Goldfarb's How do you make a movie about a hyperobject? is a fascinating account of the genesis of the climate change allegory Don't Look Up.
Shell’s Massive Carbon Capture Plant Is Emitting More Than It’s Capturing by Anya Zoledziowski reports on an expensive greenwashing effort:
"A first-of-its-kind “green” Shell facility in Alberta is emitting more greenhouse gases than it’s capturing, throwing into question whether taxpayers should be funding it, a new report has found.
Shell’s Quest carbon capture and storage facility captured 5 million tonnes of carbon dioxide from the hydrogen produced at its Scotford complex between 2015 and 2019. Scotford refines oil from the Alberta tar sands.
But a new report from human rights organization Global Witness found the hydrogen plant emitted 7.5 million tonnes of greenhouse gases in the same timeframe—including methane, which has 80 times the warming power of carbon during its first 20 years in the atmosphere, and accounts for about a quarter of man-made warming today."
Jerri-Lynn Scofield's Nothing Fundamental Has Changed: Biden Administration Greenlights More Fossil Fuel Drilling Permits in 2021 for Public Lands and Waters than Did Trump in 2017 starts:
"As he moves into his second year as President, it seems the only promise Joe Biden has made good on is his pledge that “Nothing fundamental will change.”
This promise even applies to policies on climate change where voters might have expected Biden to pursue initiatives that curtailed expansion of the oil and gas industry. No such luck. Instead, Biden seems to be following in the footsteps of the last Democratic president, who proudly and publicly took credit for the oil and gas boom."
Jillian Ambrose reports that the UK's "Slow AI" is alive and well in North Sea Abigail oilfield plan approved despite climate goals:
"The Abigail oil and gas field off the east coast of Scotland was quietly approved by the government’s Oil and Gas Authority (OGA) last month, defying climate experts who warned at the Glasgow conference in November that no new fossil fuel developments would be compatible with the world’s climate targets."
Aaron Cantu's How Oil Lobbyists Continue to Exert Influence on California Regulators and Lawmakers shows some of how the "Slow AI" works:
"An email exchange from last spring, obtained by Capital & Main through a records request, confirms that the industry was able to win a subtle but significant change to a bill that would have codified California’s 2045 net-zero greenhouse gas emissions goal into law before it even went to a committee hearing.
Specifically, the changes removed a provision mandating that 90% of emissions reductions be achieved only through actual cuts to pollution, rather than carbon dioxide removal. According to Muratsuchi, the bill was likely altered after Susan Chan, the chief consultant for the Joint Legislative Committee on Climate Change Policies who was in contact with various interested parties, discussed proposed changes with one or more lobbyists.
The bill eventually failed, in no small part because of the industry’s continued opposition since it barred captured carbon from counting toward emissions goals if later used to recover new oil."
Thousands of Planes Are Flying Empty and No One Can Stop Them by Chris Stokel-Wlaker reveals that:
"Lufthansa, Germany’s national airline, which is based in Frankfurt, has admitted to running 21,000 empty flights this winter, using its own planes and those of its Belgian subsidiary, Brussels Airlines, in an attempt to keep hold of airport slots.
A Greenpeace analysis indicates that if Lufthansa’s practice of operating no-passenger flights were replicated equally across the European aviation sector, it would mean that more than 100,000 “ghost flights” were operating in Europe this year, spitting out carbon dioxide emissions equivalent to 1.4 million gas-guzzling cars. “We’re in a climate crisis, and the transport sector has the fastest-growing emissions in the EU,” says Greenpeace spokesperson Herwig Schuster. "
In Climate change: Top companies exaggerating their progress - study Georgina Rannard writes:
"Many of the world's biggest companies are failing to meet their own targets on tackling climate change, according to a study of 25 corporations.
They also routinely exaggerate or misreport their progress, the New Climate Institute report says.
Google, Amazon, Ikea, Apple and Nestle are among those failing to change quickly enough, the study alleges."
And in “What If I Can’t Insure My Home At All?” Sam Mellins writes:
"Major insurance companies are choosing to protect the fossil fuel industry while abandoning homeowners whose safety and livelihoods are being threatened by the industry’s carbon emissions.
Insurance giants Chubb, Liberty Mutual, and AIG are three of the biggest insurers of fossil fuel infrastructure around the world. But the companies have just announced plans to scale back their homeowner coverage in California, where they insist future climate-related losses will likely prevent them from turning a profit."
Aaron Cantu's How Oil Lobbyists Continue to Exert Influence on California Regulators and Lawmakers starts:
"While Gov. Gavin Newsom and other California leaders trumpet the state’s progress on reducing emissions, emails obtained by Capital & Main show that the oil and gas industry continues to exert influence over critical climate policy. With the Legislature poised to consider far-reaching legislation in the next few months, the industry’s sway with both elected officials and regulators threatens to undermine the state’s efforts to address climate change."
It is a detailed look at how they weakened a bill before killing it.
Tom Espiner's Big banks fund new oil and gas despite net zero pledges continues the theme of this post:
"HSBC put an estimated $8.7bn (£6.4bn) into new oil and gas in 2021, while Barclays put in $4.5bn, and Deutsche Bank loaned $5.7bn, the campaign group estimated.
The fossil fuel giants receiving the funding included Exxon Mobil, Shell, BP, and Saudi Aramco."
Amy Westerfelt's The great greenwashing scam: PR firms face reckoning after spinning for big oil is way too optimisitic:
"This week a peer-reviewed study confirmed what many have suspected for years: major oil companies are not fully backing up their clean energy talk with action. Now the PR and advertising firms that have been creating the industry’s greenwashing strategies for decades face a reckoning over whether they will continue serving big oil."
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