Trump election lawsuits no threat says climate record; DOL steps back on ESG, and California's Betty Yee
Welcome to Callaway Climate Insights on this historic election day. Please enjoy, share, and vote!
The good news is the asteroid that threatened to hit Earth right before Election Day — 2018 VP1 — appears to have missed us. Aside from that, anything can happen today.
As Americans went to the polls, masked and unmasked, and the world watched, markets rose more than 2% early on hopes we’ll have some certainty either tonight or in the next day or two. The S&P 500 is up about 4% year-to-date, and as of last night, more than 9.5 million Americans have contacted Covid-19, killing 237,000 of us. Twin markers of a tragic 2020.
By far the biggest fear of most folks is that the results will be delayed for days or weeks by legal battles, ripping the country apart with social unrest and crippling the economy. Donald Trump has threatened to use his lawyers no matter what. So it’s helpful in these tense times to look at Trump’s legal record.
Starting with environmental regulations. Of the more than 125 regulations the Trump Administration has tried to overturn, his lawyers have won only 17% of the time, compared to an average of 70% for previous administrations, according to published reports. His record is equally bad in immigration, affordable housing, the census, women’s rights, and healthcare. Even in the Supreme Court, he has lost more times than he’s won.
Each case is different, but legal experts say the common thread is a lack of a firm legal argument. In other words, the lawsuits are more bluster and nuisance filings than anything else. Anyone who followed Trump’s career in real estate and casinos can tell you similar stories. So we should expect lawsuits, but unless the election numbers are too close to call, we shouldn’t fear them.
That said, the next two months will be a rollercoaster of high emotions and tempers, with the battle to fight climate change particularly on the line. The U.S. drops out of the Paris Agreement tomorrow, Nov. 4, no matter who wins.
I’ve covered presidential elections going back to 1984 (Reagan-Mondale), including the all-nighter in 2000 (Bush-Gore) and I’ve never seen anything like this before. Almost makes you want to root for the asteroid.
More insights below. . . .
And don’t forget to contact me directly if you have suggestions or ideas at email@example.com.
. . . . Fellow Californians fed up with losing power during the periodic wildfire/wind scares now for more than two years can scream all they want at utility PG&E (PCG) for ordering them. Imagine enduring it for 13 years, though. That’s what South Africans have put up with from Eskom, the indebted state power company, which routinely shuffles outages around the country. Now, a couple of the largest cities there — Johannesburg and Cape Town — and a few others, are planning to break away from Eskom, which is largely powered by coal, and explore the world of renewable energy as they build local grids. The state’s energy ministry allowed the breakup last month. It will be a unique experiment and one closely watched by places such as California and others with utility monopolies. A de-centralized grid will allow for huge steps forward in clean power and improved sharing technologies. As for Eskom, it’s hard to see how losing its major power customers will help with its debt. . . .
. . . . Interesting column by meteorologist John Morales in The Bulletin of Atomic Scientists this week, suggesting that a Joe Biden victory could lead to an environmental revolution in the U.S. akin to the early 1970s. He points out how news about the harmful effect of pesticides motivated the government to pass a series of environmental laws, including the Clean Air Act, that set the stage for every president to make progress until Trump stepped into the role. Sometimes a single catalyst — such as an election — can lead to major changes for decades to come. . . .
. . . . Last week’s pledges by Japan, South Korea and the Philippines to reduce their reliance on coal, following a major announcement by China last month, ratchet up the pressure on Australia, where the Scott Morrison government has largely stood by coal. Australia is one of the great mining countries and for years was a proxy investment for China’s commodities appetite. The financial industry’s growing reluctance to invest in fossil fuels, combined with weakening orders from once reliable partners (Japan, China and South Korea represent more than half of Australia’s coal exports) sets the stage for a very public about-face, especially if the cover of a Trump administration is removed. . . .
Sustainability Stars: Betty Yee
. . . . Leadership is the antidote to skepticism, Betty Yee tells Marsha Vande Berg in an exclusive interview for Callaway Climate Insights. California’s controller and chief fiscal officer, who has seats on the boards of both of the state’s two largest public pension funds, explains how Gov. Gavin Newsom’s Climate Action Corps aims to reduce carbon as well as car and truck emissions, by working with the young and those in underprivileged communities to mitigate the climate threat and improve racial equality and justice.
Q: What is the No. 1 challenge facing proponents of sustainability today?
A: Because the sustainability agenda is so broad, it often lacks priority focus or presents multiple priorities. More significantly, this broad agenda may result in the continued exclusion of disproportionately affected communities and their voices in the development of impactful solutions. . . .
Labor Department backs off on ESG ruling — slightly
. . . . It’s a time-honored tradition in Washington to issue unpopular news late on Friday afternoons, so nobody was surprised last week when the Department of Labor issued its ruling on using environmental, social and governance considerations in retirement plans. The ruling walked back a harsher proposal to prohibit ESG strategies by essentially just taking the term “ESG” out of the order. It still requires plan managers to only apply strategies that are based on fiscal imperatives, but it opened the door for some ESG use if those funds can make a fiscal argument. Which should not be hard, especially if ESG funds keep showing the returns they have this year. Tony Davidow takes a look at the politically-motivated order and the repercussions for both ESG and private equity strategies once it becomes official.
The DOL has taken a surprisingly forward-looking view in considering private equity in retirement plans. Secretary of Labor Eugene Scalia said in a DOL news release on the ruling that allowing 401(k) participants to invest in private equity “will help Americans saving for retirement gain access to alternative investments that often provide strong returns.”
While I applaud the DOL’s position regarding private equity, one has to wonder why they have taken such a naïve stance regarding ESG. Based on the historical results, shouldn’t the DOL adopt a similar approach to allowing, and even encouraging ESG in retirement plans? Does the DOL really think that ESG funds are riskier than private equity? . . .
Data driven: The Climate Action Tracker
Watch this: The state of the climate crisis
With the 2015 Paris Climate Agreement, 197 countries agreed to set emission targets that would limit global temperature rise 1.5°C. by capping greenhouse emissions at “net-zero” — or absorbing as much carbon as they emit — by 2050. So far, only two countries (Gambia and Morocco) are hitting their targets, while the biggest emitters are falling flat, or ignoring their goals entirely. How can we hold these countries accountable? Enter the Climate Action Tracker. This video was part of the Countdown Global Launch from TED.
News brief: ‘Zombie’ oil wells leak methane, building back from Covid
Why is the U.S. election so important to the global fight against climate change? Watch this video to learn more about Trump and Biden’s different agendas.
‘Zombie’ oil wells leaking methane
UN: Build better cities after Covid-19
Shell’s climate poll on Twitter backfires ‘spectacularly’
Latest findings: New research, studies and projects
Americans are dumping 5 times more plastic in the ocean
The amount of plastic waste generated in the United States estimated to enter the coastal environment in 2016 was up to five times larger than that estimated for 2010, rendering the United States’ contribution among the highest in the world, according to new research just published in Science Advances. The research follows a 2015 paper by the same authors, who say the sharp increase is due to Americans using more plastic; plus, the previous research did not include pollution caused by U.S. exports of plastic waste.
More of the latest research: