Greening Finance

On Friday, November 22, the U.S. government released volume two of the fourth National Climate Assessment, which underscores staggering climate damages to the country that loom in the near future. NCA4 also calculates that aggressive risk mitigation actions can avoid $500 billion in adverse effects annually by 2090 in the United States alone. In addition to well-known emissions-reduction options in energy, transportation, buildings, manufacturing, and land use,   comfort cooling – i.e., air conditioning – is one of the largest emissions reductions opportunities worldwide: Making air conditioning and refrigeration more efficient could alone reduce annual reduce emissions up to 994 million [...]

The Task Force on Climate Related Financial Disclosures issued its final report last week after looking at the issue of climate risk in the financial system.  Comprised of private sector finance and industry leaders, the Task Force recommends that companies and financial institutions of all types adopt common climate-related financial disclosure practices as a way to support informed and efficient capital allocation decisions.  Disclosure of climate-related risks falls primarily into two categories: first, the risks arising from the necessary transition to a low-carbon economy and the possible shocks that might occur from moving out of fossil-based energy systems and into [...]

By Stacy Swann and Brandon Yeh The differences between financing large scale energy infrastructure and small- or medium sized energy projects cannot be overstated. And yet, in many parts of the world, access to basic and modern energy services – including lighting and cooking – is provided specifically through smaller projects, and not through large scale energy infrastructure, which can take years to finance and develop. We know energy access is a critical component to development, including the ability to move out of poverty, and as of 2016, an estimated 1.1 billion people do not have access to electricity and [...]

Chris Mooney published yet another article on climate change in the Washington Post last week, this time about the dramatically low level of sea ice in the Arctic Ocean.  The same day, Angela Fritz had an article on how atmospheric carbon dioxide had reached a “huge record high.”  As Mooney reported, Arctic sea ice covered just 4.63 million square miles at its maximum extent for the year in May, a new low in the satellite record, according to the National Snow and Ice Data Center.  At the same time, the concentration of carbon dioxide in the atmosphere averaged 407.7 parts [...]

There is a transformation afoot. Perhaps it is due to the momentum building around the upcoming Paris climate negotiations, or to the extreme weather felt in many parts of the world. Or perhaps it is a function of new actors stepping into the climate change debate, such as insurers and ratings agencies, who are beginning to make tangible links between risks, returns, and climate change. No matter the reason, the financial community is beginning to think about climate change for both the investment opportunities it presents and the risks to portfolios that may result, both from increasing climate-related events and [...]