Moody’s Analytics says climate change could cost $69 trillion by 2100

By Steven Mufson, Washington Post, July 3, 2019

The consulting firm Moody’s Analytics says climate change could inflict $69 trillion in damage on the global economy by the year 2100, assuming that warming hits the two-degree Celsius threshold widely seen as the limit to stem its most dire effects.

Moody’s says in a new climate change report that warming of 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, increasingly seen by scientists as a climate-stabilizing limit, would still cause $54 trillion in damages by the end of the century.

The firm warns that passing the two-degree threshold “could hit tipping points for even larger and irreversible warming feedback loops such as permanent summer ice melt in the Arctic Ocean.”

The new report predicts that rising temperatures will “universally hurt worker health and productivity” and that more frequent extreme weather events “will increasingly disrupt and damage critical infrastructure and property.”

Moody’s Analytics chief economist Mark Zandi said that the report was “the first stab at trying to quantify what the macroeconomic consequences might be” of climate change, written in response to European commercial banks and central banks.

Climate change, Zandi said, is “not a cliff event. It’s not a shock to the economy. It’s more like a corrosive.” But, he added, it’s one that is “getting weightier with each passing year.”

Moody’s Investors Service, a major credit ratings agency, has already said that it wants to take climate into account when weighing the financial health of companies and municipalities.

[More U.S. businesses making changes in response to climate concerns]

The new report highlights the harm done to human health, labor productivity, crop yields and tourism.

It says that “water- and vector-borne diseases such as malaria and dengue fever will likely be the largest direct effect of changes in human health and the associated productivity loss.”

The report also says that rising temperatures will allow mosquitoes, ticks and fleas to move to new areas, resulting in more sick days. It would also raise public and private spending on health care.

Labor productivity will take a hit, especially among outdoor workers, including those working in agriculture.

The hardest-hit economies will be some of the fastest-growing ones — Brazil, Russia, India, China and South Africa, the report says.

The Moody’s Analytics report also forecasts lower oil and natural gas demand, dealing a blow to oil-exporting countries, especially in the Middle East. It forecasts that Saudi GDP will drop more than 10 percent by 2048; the kingdom would be the country harmed the most by climate change, hurting government revenue, Moody’s says.

Although Saudi Arabia has suffered drops in GDP when highly cyclical oil prices sink, Moody’s says that the kingdom would suffer more lasting harm as a result of climate change.

Of the 12 largest economies, India will be the worst hit, the report says, with GDP growing 2.5 percentage points more slowly than it would without the effects of climate change. The country’s service industry will be hit by heat stress, agricultural productivity will fall, and health-care costs will climb.

The firm carried out different scenarios using an international study by the World Bank, taking different locations into account and weighing different economic sectors. It said that rising sea levels would damage coastal real estate, wiping out rental incomes in some areas and thus cutting consumer spending.

But the scenarios only go through 2048. The Moody’s report says “the distress compounds over time and is far more severe in the second half of the century.”

“That’s why it is so hard to get people focused on this issue and get a comprehensive policy response,” Zandi said. “Business is focused on the next year, or five years out.”

He added: “Most of the models go out 30 years, but, really, the damage to the economy is in the next half-century, and we haven’t developed the tools to look out that far.”

Other businesses are peering ahead on climate change, too.

Chubb, one of the biggest insurance firms in the United States, on Monday said it would no longer sell insurance to new coal-fired power plants or sell new policies to companies that derive more than 30 percent of their revenue from the mining of coal used in power plants.

Although more than a dozen leading insurance companies in Europe have already cut off insurance for coal companies, U.S. firms have resisting pressure to take climate change into account.

Chubb’s step was just an initial one. “A major U.S. insurer like Chubb restricting insurance for coal projects and companies is a game-changer,” said Ross Hammond, a senior strategist for the Insure Our Future campaign, which has tried to pressure insurance companies to pull out of the coal market. But Hammond said that the company still needs to stop insuring new coal mines and the oil sands, or tar sands, in northern Alberta.

Lindsey Allen, executive director of Rainforest Action Network, said that “new coal projects cannot be built without insurance, and Chubb just dealt a blow to the dozens of companies that are still betting on the expansion of coal globally.”

Separately, the chief economist of Equinor, the Norwegian oil company previously known as Statoil, has written a report that looks at three scenarios for climate change and its impact on global economies, especially on energy.

Only one of those, the report said, would lead to a sustainable path, but that path comes with enormous challenges. To reach that set of targets by 2050, “almost all use of coal must be eradicated,” oil demand would need to be halved, and natural gas demand trimmed by more than 10 percent. Renewables as well as carbon capture and storage or utilization would have to increase sharply, helped by continuing advances in technology.

“In order to hit 1.5 degrees Celsius, the model to get there is enormously challenging,” said Eirik Waerness, senior vice president and chief economist of Equinor. He said more than half of new cars would have to be electric vehicles by 2030. Electricity demand will double, yet wind and solar would equal the entire current electricity output, a leap from current levels.

The threshold of 1.5 degree Celsius is the target set by most climate scientists for avoiding dire climate change.

Waerness also said that the company currently assumes a carbon price of $55 a ton when considering whether to finance new energy projects. As a result, Equinor has been investing more in projects such as offshore wind, where it can also tap into its experience with offshore platforms and technology.

Joe Biden and other 2020 Democrats give climate change the attention it deserves

USA Today editorial, June 11, 2019

Global warming is now a hot topic for voters, and candidates are taking note

In 2016, the two presidential candidates spent all of five minutes and 27 seconds on climate change during three televised debates. 

Now Democrats seeking the White House in the 2020 election are all but falling over each other with sweeping proposals for recasting the economy by promoting renewable energy, with a goal of reaching net zero carbon emissions nationally by midcentury.

The presidential hopefuls are taking cues from the Green New Deal resolution,  introduced in February by Democratic Rep. Alexandria Ocasio-Cortez of New York and Sen. Ed Markey of Massachusetts, which set a high bar for action and urgency.

To be sure, their proposal to cut greenhouse gas emissions to zero by 2050 is an overreach that is further burdened with costly social engineering goals involving guaranteed jobs and health care. But at least they helped elevate climate change to a national debate as people were hurting from record California wildfires, widespread flooding hit the Midwest and the scientific evidence grew increasingly indisputable.

The DNC said no to a climate debate. Some of its members are still trying to make it happen.

Democratic voters are telling pollsters that climate change is one of their top concerns, and nearly half of young adults surveyed call it a "crisis." Candidates are taking note. Detailed action plans sprouted from Washington Gov. Jay Inslee — running as a climate candidate — Sen. Elizabeth Warren, former Rep. Beto O'Rourke and, last week, former Vice President Joe Biden

The plans contain some important ideas. These including sticking with the Paris Agreement (President Donald Trump would pull Washington out, leaving the United States as an international pariah), pushing ahead with Obama-era fuel economy standards, embracing nuclear power as part of a clean-energy solution, and imposing some kind of price on carbon.

We continue to believe that the best approach would be a refundable national carbon tax that would make renewables and carbon-capture schemes more competitive — and prevent emitters from using the atmosphere as a free waste dump. Ideally, such a tax would be imposed in concert with similar actions by the world's other leading carbon emitters, so no nation would bear a disproportionate burden.

With the United States responsible for 15% of the global carbon pollution, Biden's plan would use U.S. economic pressure to prompt China and other major polluters to rein in their greenhouse gas emissions.

Disappointingly, the Democratic National Committee has scheduled up to 12 debates and refuses to devote even one solely to climate change. Given the importance of the issue, this is a mistake. 

Nonetheless, the contrast between Democratic proposals to address climate change and cricket-chirping silence from the Republican Party is breathtaking. Trump remains willfully, and at times incoherently, ignorant about the threat.

"I believe that there’s a change in weather, and I think it changes both ways," Trump told interviewer Piers Morgan last week, allowing that he was "moved" by the passion Prince Charles displayed for protecting future generations from the impact of a warming planet.

Indeed, members of a new generation will go to the polls in 2020. Right now, only one political party is seriously addressing the threat posed by climate change, and it isn't Trump or the GOP.

75 Executives Lobbied Congress for a National Carbon Price. We Listened

FORTUNE magazine


Right before Memorial Day, over 75 businesses came to Capitol Hill to demand that their lawmakers establish a national carbon price. The participating business leaders collectively employ over 1 million U.S. workers and represent a combined market value of around $2.5 trillion—the largest group of businesses assembled on the Hill to advocate for climate legislation in a decade.

In over 80 meetings with members and staff from both the House and Senate, these business leaders spoke forcefully on the risk climate change poses to their operations, their employees, and their customers. They challenged Congress to heed their warning, accept the severity of the crisis, and take action to address the threat of a rapidly warming world. And they made clear: There is support in the business community for setting a national carbon price as a central component of any legislative strategy to address climate change.

Now, it is our responsibility, as members of Congress, regardless of our party affiliation, to respond to the businesses who drive our economy.

We represent different parts of the country and stand on opposite sides of the aisle in Washington, but we agree that there is perhaps no issue as urgent for our nation—and our economy—as tackling climate change.

Fortunately, solutions are not as elusive as politics would suggest. Seven in 10 Americans are concerned about climate change—more than ever before. Climate impacts are being felt by Americans all across the country and our constituents are calling for solutions. And an increasing number of both Democrats and Republicans agree on a key policy to address climate change: putting a price on carbon pollution.

Businesses know all about the risks of climate change. Companies are increasingly experiencing disruptions to their supply chains and damages to their assets from floods, droughts, wildfires, storms, and other climate-driven extreme weather, and investors see it reflected in their portfolios. Businesses’ bottom lines show that climate change isn’t a far-off risk, it’s a cost that’s already racking up damages to our economy to the tune of more than $300 billion a year, an amount which is only expected to grow.

That’s why we have both introduced legislation proposing a price on carbon. A price on carbon will level the economic playing field in the energy sector, unlock market-driven innovation, and lead to the deployment of low, zero, and negative carbon technologies. It will help create millions of new jobs and slash U.S. carbon emissions dramatically, making it a powerful tool for curbing climate pollution. Our bills are not the only ones—there are several proposals to price carbon that have been introduced in Congress.

The transition to a cleaner economy should not be achieved at the expense of those who will be hardest hit: That’s why we propose using the proceeds from the carbon fee to help ease the transition to a clean energy economy, by returning money to the taxpayers as a dividend each month, investing in research and development, and rebuilding our infrastructure.

Our approach also aims to efficiently reduce emissions and spur innovation and investment in new technologies. Placing a price on carbon emissions allows for individuals and companies to make more informed decisions by factoring in the cost of greenhouse gas pollution to society, allowing the market to appropriately respond by reallocating resources to lower-emissions products and behaviors. A transition to clean energy is a job creator: In 2018, the renewable energy and energy efficiency sectors alone employed nearly 3.3 million Americans. And this proposal would create and support more jobs across a wide range of sectors, including in the building trades, manufacturing, science, and engineering.

Our own states are already unlocking the growth potential of clean energy and working to minimize the future costs of rising seas. In Delaware, we are transitioning our electricity sector to 25% renewable generation by 2025. And in Florida, cities are already spending over $4 billion to harden infrastructure, improve drainage, and renourish beaches to combat tidal flooding.

The public is often presented with a false choice between growing the economy and combating climate change but we are heartened to see businesses recognize that this trade off is a myth. America must not lose out on the good paying jobs and new technologies that will come with the transition to clean energy. A strong, stable, national carbon price will help combat climate change, speed the uptake of renewable energy in the U.S., unlock innovation in our economy, and boost our competitiveness overseas.

It’s time for Congress to take bold action to address climate change and create jobs. Putting a price on carbon will help us reach both of these goals.

Chris Coons is a Democratic senator from Delaware. Francis Rooney is a Republican representative from Florida.

Global CO2 nears troubling benchmark

By Scott Waldman, E&E News, May 7, 2019

Researchers at the Mauna Loa Observatory recently observed record-high levels of atmospheric CO2.

The world has surpassed a level of carbon dioxide not seen in about 3 million years, and levels are accelerating an unprecedented pace.

Atmospheric carbon dioxide almost topped 415 parts per million on May 1 at the Mauna Loa Observatory in Hawaii, according to the University of California, San Diego's Scripps Institution of Oceanography. On that day, the observatory measured a CO2 level of 414.94 ppm. Levels could go even higher and surpass the 415 ppm mark before the end of spring.

Every year, carbon dioxide tends to spike in the spring before plant life reemerges in a large part of the world to begin the uptake of the greenhouse gas.

But the rate of carbon emissions has accelerated in recent years, said Gernot Wagner, author of "Climate Shock: The Economic Consequences of a Hotter Planet" and a researcher at Harvard University's Center for the Environment. The jump from 410 ppm to 415 ppm happened more quickly than the jump from 400 ppm to 405 ppm, which happened faster than the previous 5-ppm jump, and so on, he said.

That accelerating rate of increase is one of the more alarming, and less covered, aspects of the rising CO2 levels, he said.

"It's what matters most for all these climate damages; it's the increase in those concentrations that is still increasing at an increasing rate," he said. "We are going in the wrong direction at an increasing speed."

The newest benchmark brings current CO2 levels in line with the Pliocene Epoch, which occurred between 2.58 million and 5.33 million years ago. At that time, global average temperatures were 5.4 to 7.2 degrees Fahrenheit hotter than today and 18 degrees warmer at the poles, according to Scripps. Sea levels were 16 to 131 feet higher than today, Scripps has found.

During ancient climate change events, an increase of 10 ppm of atmospheric carbon dioxide might have taken 1,000 years. It has taken just six years to go from 400 ppm to 415 ppm. When the late Charles David Keeling started measuring carbon dioxide at Mauna Loa in 1958, levels stood at 316 ppm, a slight increase from the 280 ppm before the Industrial Revolution.

At the current rate, CO2 levels will top 1,000 ppm in about a century. That level will profoundly alter life on the planet and render wide swaths of Earth uninhabitable, scientists have found.

Keeling's data set — it's now maintained by his son Ralph — is regarded as one of the key measurements that demonstrate how human-caused climate change is affecting the planet. The elder Keeling developed the Keeling curve, which shows annual fluctuations in CO2 levels and links them to fossil fuel consumption.

As carbon dioxide levels rise, so, too, do global temperatures. The last five years have been the hottest on record. And while nothing happens as the 415 ppm benchmark is surpassed, it's another significant step into a warmer world, Wagner said.

"We've never had this global experiment. It's an amazingly fast increase," he said. "Three million years ago, when we did have CO2 levels as high as they are today, those changes happened very, very slowly, and the world was a very different place. We had crocodiles in the Arctic Circle; we had sea levels 30 to 90 feet higher than today."

Climate change: Is an economic overhaul needed?

April 20, 2019

Al Jazeera

The planet is facing a crisis. Temperatures continue to rise, bringing extreme weather, exacerbating food shortages, and leading to the extinction of some species. Scientists have repeatedly warned that the effects of climate change are becoming irreversible.

What will it take for politicians and the public to tackle climate change and implement policies that bring actual solutions? And what role does the world economic structure play in perpetuating the crisis?

In this week's Arena, we debate these issues with renowned climate scientist James Hansen, climate activist and cofounder of the Sunrise movement, Varshini Prakash and Amanda Mukwashi, CEO of the global NGO Christian Aid.

To see the 12-minute show:

A Carbon Tax is the nudge the world needs

Column by Tim Harford, Financial Times

You can’t please everyone, it seems. Royal Dutch Shell has announced plans to plant trees in order to absorb some of the carbon dioxide produced when we burn the fossil fuels it sells. What’s more, it plans to invite motorists to chip in at the pump by buying “carbon offsets”: a clever way to help the planet, raise cash, and spread the blame around. Environmental campaigners are sceptical. So am I. 

I admit an interest here. I once worked for Shell (with the love-hate relationship that might imply), met my wife at Shell, and have occasionally been paid to return to Shell and dispense pearls of wisdom. Yet, despite a grudging affection for Big Oil that very few people share, I think climate change is far too important a challenge to entrust to oil companies. 

The issue is not whether they have benevolent intentions. (I assume Shell’s motives are mixed. Whose aren’t?) It’s that the dramatic reduction in carbon emissions we need isn’t something that is within an oil company’s gift. 

We’re all involved. If you drive a conventional car, use a gas cooker or boiler, or — green tariff or no — are plugged into a national electricity grid, then you, like me, are part of the problem. Our instinctive reaction is to guilt-trip each other and big companies into doing something. That is understandable, but falls short. Guilt is too feeble a tool and it is often applied in the wrong place. 

Our intuitions about how our daily activities warm the planet are unreliable. Which breakfast contributes most to greenhouse gas emissions: fresh berries flown in from Kenya, toast browned in a toaster powered by coal-fired electricity, or cereal drenched in milk from methane-belching cows? Even if you know the right answer, it’s absurd to expect many others to know — and even more absurd to expect enough of them to care. Voluntarism is not enough to solve climate change. 

One response, then, is to demand an ambitious programme of government investment and regulation — the most prominent of which is the Green New Deal, advanced in the US by Ed Markey and Alexandria Ocasio-Cortez, two prominent Democrats. The exciting thing about the Green New Deal is that it has serious political momentum focused at addressing climate change. 

Yet this momentum has come at a price. The details have deliberately been left vague, and grand aims often win more support than hard practicalities. (See also: Brexit.) The Green New Deal is also expansive. The resolution not only wants to act against climate change, but to “promote justice and equity . . . repairing historic oppression of indigenous peoples, communities of colour, migrant communities, deindustrialised communities” and many others. Worthy goals these may be, but in mobilising the US government to take action on every imaginable progressive goal, the whole project may become derailed by its own utopianism. 

The other risk of a huge centrally planned response to climate change is that of a huge centrally planned response to anything: clumsy megaprojects chosen for their political or bureaucratic acceptability rather than because they deliver the biggest results for the lowest cost. A planned response to climate change isn’t hopeless, because there are some obvious big wins — tightening rules on the energy efficiency of new buildings, and replacing coal-fired power with renewable alternatives. Yet the best case for the Green New Deal is that even a clumsy response may still be better than none at all. 

But there is a better way: a carbon tax (or its close sibling, a carbon permit auction). A broad-based tax on carbon dioxide and other greenhouse gases would be far less expensive than a Green New Deal is likely to be, yet it could motivate action on a scale that is both grander and more precise. Every part of the economy and each decision we make would be shaped by such a tax. 

A carbon tax would pull billions of different levers in an economy that is both complex and saturated in fossil fuels. Each one of the billions of different products on sale can be designed, produced, transported and consumed in a way that might increase or reduce carbon emissions. A carbon tax nudges the energy mix to shift in favour of renewables, but also pushes fossil fuels from coal towards gas. It encourages efficiency in the design of cars, homes, any light bulb or any motor, but it also rewards frugality. A lump-sum subsidy can encourage the uptake of electric cars — but a carbon tax will also reward those who cycle instead of driving. 

Our modern economy reflects countless choices, made by billions of people all over the world. A broad-based carbon price influences them all. Nothing else can. 

I fear that, like Buridan’s Ass, the American political system may continue to do nothing rather than choose between different plans for dealing with climate change. I would rather a Green New Deal than inaction, and a carbon tax alone is not the ideal response. But such a tax is the long-overdue, all-embracing response to climate change that America, and the world, badly needs. Everyone who cares about climate change should be advocating for it.