Economy

Facing the abyss: Climate leaders demand new urgency at Dublin Climate Summit

By David Callaway, Callaway Climate Insights

Irish Taoiseach Micheal Martin pushed past volatile markets and geopolitical headlines this morning to tell his countrymen and climate leaders from the investing world that more must be done to act now on global warming or the world will soon be facing “an abyss.”

Headlining our day-long Dublin Climate Summit, which featured investors, bankers, entrepreneurs, venture capitalists, and government officials from around the world, Ireland’s Prime Minister implored the leaders to back new technologies such as wind energy, and to aid weaker countries facing global warming through no fault of their own.

The day was marked by several calls for a carbon price to help business and governments measure success in decarbonizing the world, including from Blackstone’s Jean Rogers, and by news from New Zealand’s climate commissioner, Kay Harrison, that her country would begin pricing agriculture methane emissions by 2025.

“We must see a way in which financial flows and climate risks are managed,” Harrison said.

Gabriel Kra, managing director of Silicon Valley’s Prelude Ventures, said that $26 billion raised by 129 venture funds shows that despite the volatility of short-term markets, “a lot of dry powder” is being deployed on new strategies that can help cut energy costs, reduce emissions, and pull harmful carbon from the air.

“We’re not going to see a slowdown in investment,” he said.

We’ll have more insights from Dublin for you on Monday, and thank you to the hundreds of you who joined us online for the event and the few who actually made the trip to Dublin. Next time the Guinness is on me.

More insights below . . . .

Proof that Wall Street does pay attention to the climate

. . . . New university research out of Australia has concluded that far from an exotic, do-good topic, climate change risks to companies have been factored into their shares for years, writes Mark Hulbert. This is a momentous result: It means that the stock market is systematically taking climate risks into account, and has been doing so for more than a decade. The study raises questions about the current primary factors for measuring stock performance, such as market cap and valuation, as well as about the need for additional themes such as environmental, social, and governance strategies. . . .

Read the full story

Thursday’s subscriber insights: Denmark’s energy islands

. . . . Produced in the ‘60s and ‘70s by International Harvester, the on- and off-road Scout was a much-loved competitor to the Jeep. Now the cute ute may be revived as an EV — by none other than Volkswagen, which is more noted these days for its slick European designs. Will it find a niche? Read more here. . .

. . . . As is usual, Denmark is in the renewables vanguard. This time it’s the development of so-called energy islands, offshore hubs that collect wind energy and transmit it or store it in huge batteries onboard while not taking up valuable land. We take a look at the phenom, which could start in a couple of years. Read more here. . . .

. . . . Homeowners and businesses carefully separate their plastics for recycling, but their efforts are essentially a waste, with only 5% of plastic trash being used again. The reasons are complicated, but more can be done. Read more here. . . .

. . . . I’m lovin’ it. Airports are preparing to have their spent cooking oil turned into jet fuel. At the moment it’s an expensive process, but it could soon be a reality. Read more here. . . .

Editor’s picks: Cod collapse, ConocoPhillips emissions proposal fails

Chips, no fish

“We can’t catch cod. The quota is so low that nobody could target cod. Nobody. That’s how we’re going to handle it,” Maine fisherman Terry Alexander told The Associated Press about the collapse of the Atlantic cod industry. Citing state records, the AP report said Maine’s cod catch was more than 20 million pounds in the early 1990s, but less than 50,000 pounds last year. The decline is blamed on overfishing, restrictive fishing quotas and environmental changes. It stands in contrast to other components of Maine’s seafood industry, which has grown in value due to the rising price of lobster.

ConocoPhillips shareholders nix tougher emissions goals

ConocoPhillips (COP) shareholders have voted down a proposal that would have required the company to set carbon emissions goals in compliance with the Paris Agreement on climate change. The measure, sponsored by Dutch climate group Follow This, received only 39% of shareholder votes. Bill Holland writes for S&P Global Market Intelligence that Follow This “blamed the lower vote for the recent proposal on its specific nature, which moved the goal line from a general emissions reduction to Paris-compliant goals. The activists also said the oil company’s investor base may have fewer climate-conscious shareholders because of disinvestment and said Conoco may have succeeded in convincing shareholders that exploration and production companies, or E&Ps, should not be subject to Scope 3 emissions goals.”

Emission caps and investment in green technologies

To the extent that firms don’t internalize the negative externalities of their CO₂ emissions, government intervention is needed to curb global warming, say the authors of Emission caps and investment in green technologies. From the abstract: “We study the equilibrium interaction between firms, which can invest in green technologies, and government, which can impose emission caps but has limited commitment power. Two types of equilibria can arise: If firms anticipate caps, they invest in green technologies. These investments have positive spillover effects, lowering the aggregate cost of emission reductions for all firms, thus making the government willing to cap emissions. If firms anticipate no caps, they don’t invest in green technologies, and the government finds it too costly to cap emissions. A large fund, engaging with firms’ management to foster investment in green technologies, can tilt equilibrium towards emission caps.” Authors: Bruno Biais, HEC Paris; Augustin Landier, HEC Paris.

Words to live by . . . .

“When the last tree is cut, the last fish is caught, and the last river is polluted; when to breathe the air is sickening, you will realize, too late, that wealth is not in bank accounts and that you can’t eat money.” — Alanis Obomsawim, Canadian filmmaker and member of the Abenaki people.

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