The great California jump start; and why your bonus will soon be tied to climate change

Welcome to Callaway Climate Insights, and particularly to our new European subscribers. Enjoy, and please share.

The first quarter ended mixed for climate-related stocks, as measured by the Callaway Climate Insights Climate Index. Over the first three months of the year, the index fell 6.55 points, or 6.6%, to 94.09. Twenty-two stocks in the index rose while 32 fell. Leading performers during the quarter included MicroVision (MVIS), a maker of radar systems used in self-driving vehicle applications, Polar Power (POLA), a maker of direct current power systems, and Sunworks (SUNW), a maker of photovoltaic systems for commercial and agricultural use. 

It could be the mother of all jump starts.

California’s Pacific Gas & Electric Corp. (PCG) is working with German automaker BMW on a program to use electric vehicle batteries to power the state’s ailing electricity grid during blackouts or periods where it runs low on energy.

I admit, when I first read about this, I thought it might be an April Fool’s joke. But the studies started five years ago and have progressed to a third and larger stage, with the two companies hoping to sign up 3,000 BMW owners in the state to experiment in re-charging their batteries during times when solar and wind power are prominent on the grid, i.e. midday.

With more than 320,000 electric vehicle owners in California, and projections running up to five million by 2030, the idea of charging vast fleets of cars and trucks with renewable energy, and potentially using them to shore up the grid, has a certain moonshot appeal that Californians love.

In this state, no idea is too ridiculous. Energy authorities still rely on natural gas and nuclear power for more than half their energy needs, and even with gains in wind and solar, the state does not have nearly enough to meet projected demand. Especially with fire seasons growing longer and worse each year and with them, more blackouts.

We are still very much at the idea stage of adapting to climate change. And while this might seem far out, once you get to a micro-grid universe where local grids band together to provide power, ideas like these start to make a bit more sense.

If we can build 500,000 electric vehicle charging stations across the country in 10 years, per President Biden’s infrastructure plan, we can certainly envision using them for more than just our cars.

More insights below. . . .

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ZEUS: Why your bonus will soon be tied to climate change

. . . . As the former CEO of a publicly-traded news and information company, I benefited, and sometimes suffered, from rigid bonus rules tied to my performance in generating revenue. Reducing climate change was not among them, writes David Callaway. But a growing number of companies are beginning to link progress in reducing greenhouse gas emissions to executive compensation. This is the next step in the great climate disclosure debate on Wall Street, and it will move rapidly through compensation committees this year as shareholders demand it. Read more here about who is leading the way, how it will help diversity campaigns, and when it might hit your bonus. . . .

Read the full ZEUS column

EU notebook: Macron struggles to live up to big climate progress; and leaked document signals EU approval of nuclear energy

. . . . We hate to pick on the French government the day after it declared another nationwide Covid lockdown, but President Emmanuel Macron is facing rising anger over a series of climate pledges he made three years ago that have been dramatically watered down, writes Vish Gain from Dublin. French protesters have taken to the streets, and we all know what that means. Read more here. . . .

. . . . Also, a leaked document signals that the European Union is prepared to label nuclear energy a sustainable source of energy as early as this week, over the objections of many who see it as a dangerous and volatile force. Eastern Europe in particular has fought to use nuclear energy in its transition, because of its low costs and already existing production. Read more here. . . .

Read the full EU notebook

Climate-friendly beer and the search for the elusive bond ‘greenium’

. . . . As the market for green bonds grows, particularly in Europe, so too does the debate over whether there is indeed a “greenium,” or green premium on bond interest, writes Mark Hulbert. An academic search over a wide universe of green bonds found no evidence a premium exists, which calls into question the value of the securities in convincing companies to develop climate-friendly projects. Still, as one beer company has found, there are sustainable covenants that work. Read more here. . . .

Read the full column

Thursday’s insights: GOP sets up infrastructure roadblock; World Bank waters green goals

. . . . Think that Republicans are just going to lie down and let President Biden spend $2 trillion on infrastructure, including hiked corporate taxes to pay for it? Of course not. And the GOP fired the first salvo in what is likely to be a fierce Congressional war this week, filing legislation that would block imports of solar panels from China on humanitarian grounds. Biden, with super-slim margins in both the House and Senate, has said he is seeking bipartisanship in passing his infrastructure legislation — and certainly will garner some GOP support for more basic proposals, such as roads and air transportation — but this bill is a loud warning that he has a minefield to cross to get his plans through the finish line. Read more here. . . . 

. . . . The World Bank wants to inject a dose of reality into nations’ global embrace of green goals. While the finance giant, whose largest shareholder is the U.S., has sharply moved away from a Trump-influenced path with the arrival of the Biden administration, a new policy document on climate change falls short of recommending an end to fossil fuel funding, setting up a sharp debate. Read more here. . . .

News briefs: ‘Zombie’ peat fires, S. Korea’s offshore plan, Apple’s green manufacturers

Editor’s picks:

  • A soapy answer to ‘zombie’ peat blazes, which make wildfires look tame

  • South Korea to build world’s largest wind farm

  • Apple converts more iPhone manufacturers to green power

Read all of today's news briefs

Latest findings: New research, studies and projects

Melting glaciers contribute to Alaska earthquakes

In recently published research, scientists with the University of Alaska Fairbanks Geophysical Institute found that ice loss near Glacier Bay National Park has influenced the timing and location of earthquakes with a magnitude of 5.0 or greater in the area during the past century. A report in SciTechDaily says scientists have long known that melting glaciers have caused earthquakes in otherwise tectonically stable regions. In Alaska, the report says, the pattern has been harder to detect because earthquakes are common in the southern part of the state. In the study, researchers link the expanding movement of the mantle with large earthquakes across Southeast Alaska, where glaciers have been melting for over 200 years. More than 1,200 cubic miles of ice have been lost. The disappearance of glaciers has also caused Southeast Alaska’s land to rise at about 1.5 inches per year, researchers said. The weight of the glaciers causes the earth beneath to sink, and when they melt, the ground springs back.

More of the latest research:

Words to live by . . . .

“To see or not to see, that is the question! Where it starts is with each one’s seeing, yes, mine and yours.” — Pope Francis, asking people to not be blind to the destruction of climate change and the resulting mass migration.