Wildfire nears Tahoe ski areas; plus the financial adviser ESG shortage

By David Callaway, Callaway Climate Insights

Among the environmental challenges for ski resorts, wildfires don’t often leap to mind. But this week, the fastest-growing fire in California has suddenly turned toward the Lake Tahoe Basin, the San Francisco Bay Area’s ski destination, with 15 mountain ski areas about 150 miles from the city.

The Caldor Fire, shown above, grew by 7,000 acres Monday and is now at more than 117,000 acres, becoming the No. 1 fire priority in the country and threatening tens of thousands of people and thousands of homes, according to the Tahoe Daily Tribune. The legendary pure air Tahoe is known for was the most polluted in the world on Monday, choking from smoke from the wildfire.

No real impact yet on shares of Vail Resorts (MTN), which owns the Kirkwood Mountain Resort, currently about five or six miles from the blaze, and the Heavenly Valley Resort in South Lake Tahoe, about 12 or 14 miles away. The Sierra Mountain Resort lies in between the two, about 10 miles away from the edge of the approaching blaze on Route 50, which has been closed.

Of course, skiing is probably the last thing on the minds of the people evacuating and the firefighters who have struggled to contain about 10% of the fire at last check. Just as wineries were in Napa Valley when blazes erupted there the past few years. But when the fires are finally contained, the cost of lost businesses and homes will be enormous. Insurers will bear the brunt.

The unpredictability of these events this year continues to astonish.

More insights below. . . .

Fiddling with carbon offsets while California burns

. . . . Wildfires in the American West have exposed flaws in the booming carbon offset market as pristine land used in some offset programs succumbs to the flames, writes Mark Hulbert. At a time when offset use by companies is growing to the point where Wall Street is planning securitization products off of some of the market, the vulnerability of the underlying environmental assets to fire or other disasters exposes the challenges in using them to account as a hedge against corporate polluting. Hulbert examines whether one result of the fires might be a more accurate offset market and maybe even a reduction in polluting overall. . . .

Read the full column

Wanted, financial advisers with ESG strategy expertise

. . . . Financial advisers’ expertise in environmental, social and governance investing strategies is being dwarfed by investor demand for more guidance as the ESG market in funds, ETFs and other products continues boom, writes Tony Davidow, in an excerpt from his new book Goals-Based Investing: A Visionary Framework for Wealth Management. With trillions of dollars in assets preparing to be shifted from the baby boomers to the next generation — particularly to women — the need to educate investors on ESG could be a $30 trillion opportunity. Davidow breaks down how to screen various ESG strategies against their goals and what advisors are being asked for guidance on by their clients. . . .

Read the full column

Tuesday’s subscriber insights: The growing market for recycled electric vehicle batteries

. . . . As the first generation of electric vehicles begins to turn over in the next decade, millions of tons of lithium-ion batteries will need to be recycled, creating the opportunity for a new manufacturing cycle in the U.S. and new technology startups, some of which are already going. Read more here. . . .

. . . . President Biden’s $1.2 trillion infrastructure plan contains about $20 billion for electrifying the federal fleet of vehicles, including postal trucks and school buses. While this is still a drop in the bucket, it could make an outsized difference in removing some of the most polluting vehicles on the road. Read why here. . . .

. . . . The growth of renewable energy is creating a cottage industry in data tied to measuring wind speeds as well as cloud cover on solar panels, with the UK taking the lead with a new project designed to measure the minute-to-minute impact of its considerable cloud bank. Read more here. . . .

. . . . A new collaboration between Duke Energy (DUK), Microsoft (MSFT) and Accenture (CAN) to use artificial intelligence to track methane emissions in oil and gas fields could help researchers identify the most harmful types of greenhouse gas emissions in ways technology can’t today. Read more here. . . .

Editor’s picks: Texas, fighting air pollution and widening highways; BIS wants to tokenize green bonds

Texas funds clean-air initiatives and highway widening

New state legislation in Texas has increased funds for much-needed clean air initiatives, but environmental activists are angry about a deal cut by lawmakers that allocates 35% of the funds under the Texas Emissions Reduction Plan (TERP) to the Texas Department of Transportation to widen highways for “congestion mitigation.” Inside Climate News reports activists say building additional lanes is hardly a way to reduce air pollution. The bill gives the Texas Commission on Environmental Quality greater access to fees and surcharges levied on vehicle transactions for emissions reductions. But, says Luke Metzger, executive director of the nonprofit Environment Texas, “Texas has a deadly air pollution problem, so it’s unconscionable that the legislature raided the clean air fund.”

Tokenizing green bonds

Genesis, the first green finance project of the Bank for International Settlement’s Innovation Hub, explores the future of combining blockchain, smart contracts, internet-of-things, and digital assets. BIS says it seeks to develop a system whereby investors can download an app and invest any amount into safe government bonds that will develop a green project. Over the bond’s lifetime, investors would be able to not just see accrued interest, but also track in real time how much clean energy is being generated, and the consequent reduction in CO2 emissions linked to that individual investment. Further, investors could sell the bonds in a transparent market. BIS says the Genesis prototypes are being developed together with six partner companies that will design the digital infrastructure, experimenting with both public and private blockchains.

Today in wildfires

. . . . As of Aug. 24, the Fire Information for Resource Management System reported no new large incidents and 77 uncontained large fires in the U.S. One Boeing 737 air tanker from New South Wales, Australia had been brought in to support fire suppression efforts in the western United States, in addition to numerous state aircraft and aircraft and personnel from National Guard units. There are 10 uncontained large fires in the Northern California region, and state fire officials said Monday the fast-spreading Caldor fire, which has burned more than 100,000 acres in 10 days east of Sacramento and in the El Dorado National Forest, is the top priority. “It is that important,” said Chief Thom Porter, director of the California Department of Forestry and Fire Protection. “It is knocking on the door to the Lake Tahoe basin.” Across the nation, the National Interagency Coordination Center reports that as of Tuesday morning, more than 26,383 firefighters are battling 90 blazes that have burned 2.9 million acres in the past day. . . .

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