China's new coal pledge; plus six ESG stocks up 1,000% since last Earth Day

Welcome to Callaway Climate Insights, Earth Day edition. Please mark this important day by sharing our journalism with your colleagues.

September, 2020: A wall of smoke clings to the western United States as wildfires rage out of control. NASA Earth Observatory image by Lauren Dauphin, using MODIS data.

The first part of the Earth Day leaders summit held by President Joe Biden on Thursday transpired with lots of speeches, a predictable technical difficulty, and a series of pledges, each one more unlikely than the one before. Highlights:

— Biden came through with a promise to reduce U.S. emissions by more than half (52%) by 2030 and said he could do it with one hand tied behind his back, i.e. without Congress.

— Japan said it would increase its cuts to 46% by 2030, from 26%.

— Canada increased its emissions reduction vow to 40% - 45%, up from 30%, by 2030.

— South Korea said it would eliminate public financing for overseas coal projects.

— China said it would start reducing coal consumption by 2026, moving that date up from 2030.

— Brazil’s Jair Bolsonaro said he would eliminate deforestation by 2030.

By far the biggest news of the day was Xi Jinping’s promise to begin phasing down coal consumption in China’s next five-year plan, which starts in 2026. The current plan calls for fossil fuel consumption to peak in 2030, and then gradually decline to net zero by 2060.

“We will strictly limit the increase in coal consumption over the 14th Five-Year period and phase it down in the 15th Five-Year period,” Xi said, speaking after Biden in what was the first meeting of the two leaders (virtually) since Biden was elected.

Of all the promises, China’s may be the most achievable.

Biden faces steep opposition in Congress to parts of his infrastructure plan, and is unlikely to come close to meeting his goals without legislative help. Canada has so far only achieved a 1% reduction in emissions, and is counting on a carbon tax to help it meet the rest of its goals. Brazil’s promise was, well, a promise.

But for China to make Xi’s pledge stick, it will need to start now. Coal consumption is expected to soar this year and scores of more plants are still to come on line, both in China and in other countries in its Belt and Road Initiative. The world’s largest greenhouse gas emitter can move the needle if it wants. So when Xi says something like this, heads turn.

The Climate Action Tracker said in a statement this morning the U.S. pledge alone could move the world 10% to 15% closer to its Paris Agreement goals of limiting global temperature increases to 1.5°C. above pre-industrial levels. No major blueprint for the Biden plan was announced, though that is expected in coming days.

As the leaders spoke, oil prices rose. They are up 20% year-to-date, a fair indication that at least some investors are still waiting to see some action behind the words.

More insights below. . . .

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.

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Callaway Climate Insights Indexes

. . . . Since Earth Day in 2020,  six stocks in the Callaway Climate Insights Climate Index have risen by more than 1,000%, reflecting both the early stage development for many climate companies as well as the volatility of the clean-tech sector. The top three performers were Blink Charging (BLNK), up  more than 1,900%; Sunworks (SUNW), up more than 2,300%; and MicroVision (MVIS), up more than 5,300% from Earth Day just one year ago. . . . 


ZEUS: The inevitable rise of the anti-climate investing strategy

. . . . If Mr. Potter from ‘It’s a Wonderful Life’ were alive today, he’d be shorting ESG stocks, arguing that they are the result of “a few starry-eyed dreamers … filling their heads with impossible ideas.” In his ZEUS column this week, David Callaway previews the rise of the anti-ESG funds, which focus on companies still dedicated to profit over purpose. Despite the success of the ESG theme, it’s inevitable some funds will take advantage of the messy metrics and regulations around them to create products that stand apart. But the universe of companies not looking at global warming is shrinking rapidly. . . .

Read the full ZEUS column


Dirty dozen: Biden remakes government in climate effort

. . . . President Joe Biden’s “whole-of-government” approach to climate change impacts almost every major branch of the federal government. In this special climate leaders summit feature, Sydney O’Shaughnessy examines how a dozen major agencies are responding to the presidential order. From the SEC and the IRS to NASA, climate change is now a priority. . . .

Read the full story


Thursday’s subscriber insights: A peek at our best offerings

. . . . History-obsessed Europe moves slow and steady when it comes to new laws and regulations, but this week’s climate moves by the European Union signaled a new era in the world’s regional leader on action against global warming. Read more here. . . .

. . . . Treasury Secretary Janet Yellen warned investors this week that her “whole-of-economy” approach to climate mitigation won’t work without billions in private funding for new renewable technologies. Read more here. . . .

. . . . Only two months after the Texas ice storms and gas power failures led to the deaths of more than 100 people, the state’s lawmakers are pushing legislation to boost the cost burden of renewable energy producers and, um, freeze them out of taking board positions on the state’s energy regulator. Read more here. . . .

Subscribers can read all of today’s insights here, or readers can …

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Editor’s picks: West Coast leads U.S. in air pollution, plus NextEra Energy’s big chance

‘State of the Air’ report: Air quality inequality

More than 40% of Americans live in areas with unhealthy levels of air pollution, with people of color three times more likely than white people to breath dangerous air. The American Lung Association’s State of the Air report, just released, tracks ozone and particulate matter pollution. The annual report found nearly 15 million more people living amid dangerous air pollution than last year. The six cities with the most dangerous particulate pollution — for those who live there an entire year — were in California, and all of the top 10 are on the West Coast. Burlington, Vt., Charlottesville, Va., Elmira-Corning, N.Y., Urban Honolulu and Wilmington, N.C. were ranked as the five cities with the best air quality.

New S&P sustainability analysis group

S&P Global announced the formation of S&P Global Sustainable1 this morning, bringing a new ESG and sustainability-focused group that aims to bring customers a “360-view” of relevant indexes, analytics and evaluations to help them achieve their sustainability targets. The new group will bring forth a new ESG-focused site, bringing all of S&P sustainability-related info from its renowned global pool of data into one public place. 

NextEra Energy poised to profit from Biden goals

NextEra Energy (NEE), one of America’s largest energy producers with about 55 gigawatts of generation capacity, is encouraged by President Joe Biden’s focus on clean energy, according to remarks from its earnings call Wednesday. The company says it has been discussing additional renewable credits, transmission credits and hydrogen with the Biden administration, as well as advocating for a clean energy standard. NextEra Energy has already made substantial commitments to renewables, with nearly 20 gigawatts of renewable capacity already. 


This week in wildfires

. . . . As of April 22, the Fire Information for Resource Management System reported 138 fires in the mainland U.S. classified as “light,” three new large incidents, one large fire contained and four large fires uncontained. The National Interagency Coordination Center reports that as of Wednesday, about 32,000 acres burned. . . . .


Latest findings: New research, studies and projects

The NOAA Weather Balloon facility sitting near the edge of the cliff at the Monomoy National Wildlife Refuge in Chatham. Photo: Bryce Williams of the National Weather Service in Boston.

Weather research station destroyed by … weather

A National Weather Service research station in Chatham, Mass. is being shut down because it’s being threatened by erosion and storm damage. “We had to say goodbye to the site because of where we are located at the Monomoy Wildlife Refuge; we’re adjacent to a bluff that overlooks the ocean,” Boston NWS meteorologist Andy Nash told the WHDH news station in Boston. “We had to close and cease operations there because that bluff has significantly eroded.” The research facility was evacuated March 31. While the area has been battered by waves, tides and storms for millennia, the damage from sea level rise and extreme weather has accelerated the coastal erosion, The Guardian reports. The station used to be about 100 feet from the cliff, but storm action last year alone reportedly washed away as much as 6 feet of land a day.

More of the latest research:


Words to live by . . . .

“The ultimate test of man’s conscience may be his willingness to sacrifice something today for future generations whose words of thanks will not be heard.”Gaylord Nelson.