As climate mitigation costs become clear, banks and politicians blink
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Aggressive climate pledges seemed so heroic when they were announced a few years ago, but as the cost of such reforms begins to take shape, local politicians and some global businesses are beginning to blink.
Here in the Western U.S., both California and Washington state — which have enacted cap-and-trade programs to raise money from polluters and use it on climate mitigation in recent years — have started reconsidering as gas prices bite and fossil fuel companies say their hands are tied.
Washington opponents have gone so far as to file for a referendum to repeal the state’s program. While in California, a deadline to re-authorize its program past 2030 is getting uncomfortably close, threatening $4 billion in state revenue that Gov. Gavin Newsom has been partially using for general funds.
This week, Reuters reported in an exclusive that in internal papers tied to a report the big banks needed to make to the Federal Reserve last year on climate risk, Citibank C 0.00%↑ said that if planned climate reforms gained in scope in the next several years it could suffer up to $3 billion extra in losses in its loan book.
Advancements in climate reporting are allowing banks and governments to start to really calculate the cost of what they need to do to reduce climate risk and more and more they are spitting out concerning impact scenarios. Fair enough now; all investors need better clarity to make the most informed decisions.
But the numbers nobody seems to be running are the ones on what everything will cost if we don’t execute these reforms.
Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.
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Editor’s picks: Saving the ‘Yosemite of South America’; plus, get a conservation job
The ‘Yosemite of South America’ saved from development
After what is being described as a “decade-long battle between a wealthy industrialist and a band of activists,” a pristine wilderness area in central Chile will be preserved against development. The area, known as Hacienda Puchegüín, “is surrounded by national parks and is cut by wild rivers, forests of ancient Alerce trees and the Cochamó Valley, a cathedral of towering granite walls popular with rock climbers around the world,” according to a report from The New York Times. Roberto Hagemann, the Chilean businessman who owns the 325,000-acre property, has agreed to sell it for $63 million to environmentalists who spent years fighting efforts to develop the property, the NYT reports. The Nature Conservancy said this week it has joined Puelo Patagonia, Freyja Foundation, Patagonia Inc., and Wyss Foundation to launch the Conserva Puchegüín initiative to seal the deal and acquire Hacienda Puchegüín.
Climate conservation job-search site launches
Nearly a century after Franklin Delano Roosevelt established the Civilian Conservation Corps, President Joe Biden announced that Americans can now apply to join the American Climate Corps through a newly launched website, ClimateCorps.gov. The website will feature nearly 2,000 positions located across 36 states, Washington, D.E. and Puerto Rico. According to a statement from the White House, the positions are hosted by hundreds of organizations advancing clean energy, conservation and climate resilience. The website, which has launched in its beta form, will be regularly updated with new American Climate Corps positions. The goal is “to make it easy for any American to find work tackling the climate crisis while gaining the skills necessary for the clean energy and climate resilience workforce of the future,” according to the statement on the AmeriCorps website.
Latest findings: New research, studies and projects
Not all density is created equal
As the urgency of the climate crisis becomes increasingly apparent, many local governments are adopting land use regulations aimed at minimizing greenhouse gas emissions. The emerging approaches call for loosening zoning restrictions to unlock greater density and for strict new green building codes, writes the author of a paper titled Climate Zoning. The work is a forthcoming Vanderbilt Law Research paper published in the Notre Dame Law Review. From the abstract: “This article argues that both approaches are appropriate in some places but not in others. Not all density is created equal, and compact multifamily housing at the urban fringe may actually increase GHG emissions.” The paper proposes regulatory prescriptions specifically for local governments, aimed at producing density in low-carbon places and minimizing emissions in high-carbon ones. Author: Christopher Serkin, Vanderbilt Law School.
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Words to live by . . . .
“I demand a just transition, unbound by race, culture, class, or country. Because if we want peace, if we want justice, it takes just us.” — Climate activist Saad Amer, above, during the International Peace Day youth observance at the UN.