A Vote To Fight The Climate Crisis
This is what voting is about. From via NationalSierraClub YouTube
Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...
This is what voting is about. From via NationalSierraClub YouTube
The keeper of the numbers show New Energy prices winning and installed capacity accelerating. From Bloomberg Live via YouTube
Fighting the climate crisis and protecting health by building New Energy will grow the economy.From CNBC International TV via YouTube
'Sleeping giant' Arctic methane deposits starting to release, scientists find; Exclusive: expedition discovers new source of greenhouse gas off East Siberian coast has been triggered
Jonathan Watts, 27 October 2020 (UK Guardian)
“Scientists have found evidence that frozen methane deposits in the Arctic Ocean – known as the “sleeping giants of the carbon cycle” – have started to be released over a large area of the continental slope off the East Siberian coast, the Guardian can reveal…High levels of the potent greenhouse gas have been detected down to a depth of 350 metres in the Laptev Sea near Russia, prompting concern among researchers that a new climate feedback loop may have been triggered that could accelerate the pace of global heating…
The slope sediments in the Arctic contain a huge quantity of frozen methane and other gases – known as hydrates. Methane has a warming effect 80 times stronger than carbon dioxide over 20 years. The United States Geological Survey has previously listed Arctic hydrate destabilisation as one of four most serious scenarios for abrupt climate change…[T]he discovery of potentially destabilised slope frozen methane raises concerns that a new tipping point has been reached that could increase the speed of global heating…With the Arctic temperature now rising more than twice as fast as the global average, the question of when – or even whether – they will be released into the atmosphere has been a matter of considerable uncertainty in climate computer models…
The most likely cause of the instability is an intrusion of warm Atlantic currents into the east Arctic. This “Atlantification” is driven by human-induced climate disruption…Temperatures in Siberia were 5C higher than average from January to June this year, an anomaly that was made at least 600 times more likely by human-caused emissions of carbon dioxide and methane. Last winter’s sea ice melted unusually early. This winter’s freeze has yet to begin, already a later start than at any time on record.” click here for more
The world is worried about the coronavirus. It’s equally concerned about climate change. Nearly 70 percent of people in 14 countries say climate change is as big a threat as the spread of infectious disease.
Jariel Arvin, October 20, 2020 (VOX)
Even amid a pandemic that has killed more than 1 million people, infected over 40 million, and tanked economies, people around the world are still extremely worried about the threat posed by climate change…[A] median of 70 percent of respondents in 14 countries identified climate change as a major threat to their countries, while 69 percent expressed the same level of worry about the spread of infectious disease…Majorities in all countries surveyed said both issues were major causes for concern. When comparing the two problems, respondents in eight countries were more worried about climate change as a significant threat…
Many of the countries witnessed a substantial increase in the percentage of people who view climate change as a major threat since Pew first asked the question…In 2013, a median of 55 percent of respondents in 10 countries said climate change was a major threat, compared to 76 percent in 2020…The results of the Pew Research Center poll, which was conducted from June 10 to August 3, 2020, might seem surprising given how much space the Covid-19 pandemic has taken up in our global consciousness…[Reports citing the drop in carbon dioxide emissions may have caused people] to consider the impact of their personal choices on the environment…[and] governments around the world to consider “green” stimulus plans…” click here for more
California Leads on U.S. Green Hydrogen Solutions
Herman K. Trabish, August 11, 2020 (cacurrent)
Editor’s note: Interviews with New Energy dealmakers report accelerating interest in green hydrogen in the financial community.
California is showing that green hydrogen will soon be a crucial path to greenhouse gas emission reductions that cannot be reaped from wind, solar, and energy efficiency…The Los Angeles Department of Water and Power, the nation’s biggest municipal utility, is setting the pace in the use of green hydrogen for electricity generation. Sunline Transit, a Palm Desert bus fleet, is showing what solar-generated green hydrogen can do in transportation…Following their lead, pilot projects are emerging from Washington state to Florida…
Wind and solar paired with batteries are unlikely be a cost effective strategy for fueling heavy-duty vehicles, providing heat for industry and aging buildings, and storing energy for long durations. But hydrogen extracted from water by an electrolyzer powered by wind and solar-generated electricity, which is the basis of LADWP and Sunline plans, is expected to be a cost-effective climate protection strategy. Driven by over 12 GW of green hydrogen mandates, European markets are bringing the electrolyzer cost down about 20% with each doubling of installed capacity. That should make green H2 price competitive by 2030. That also is when California, eight other states, and many local governments with zero-emissions mandates will need climate solutions for heavy duty vehicles, building heating, industrial processing, and long-lasting storage..,” click here for more
EIA: US renewable energy sets record in 2019
Sarah Smith, 19 October 2020 (Energy Global)
“…[In 2019, U.S. New Energy consumption] grew for the fourth year in a row, reaching a record 11.5 quadrillion Btu, or 11% of total US energy consumption…[The Energy Information Administration (EIA) fossil fuel equivalences for noncombustibles showed wind] accounted for about 24% of US renewable energy consumption in 2019...[and passed] hydroelectricity to become the most-consumed source of renewable energy on an annual basis…
[Hydroelectric power] accounted for about 22% of US renewable energy consumption…Biofuels, including fuel ethanol, biodiesel, and other renewable fuels, accounted for about 20%...Solar energy, consumed to generate electricity or directly as heat, accounted for about 9%...and had the largest percentage growth among renewable sources…” click here for more
Troubled Waters for LNG: The Covid-19 Recession and Overproduction Derail Planned Construction of Liquefied Natural Gas Terminals
October 26, 2020 (Environmental Integrity Project)
The coronavirus pandemic has sent shockwaves through global energy markets. Last year, the United States became a net exporter of natural gas and one of the largest exporters of liquefied natural gas (LNG) in the world. This year, U.S. LNG exports have fallen by more than half1 and companies are delaying final investment decisions on proposed LNG export terminals amid rock-bottom energy prices and unprecedented declines in energy demand. The result is that six proposed LNG projects that regulators have approved for construction have been postponed by at least one year because companies have failed to make final investment decisions expected by now. On top of these six projects are another four that were significantly delayed before the March 2020 outbreak of the coronavirus. If built, these 10 new terminals and expansions – located in Texas, Louisiana, and Oregon – have permits that would allow them to emit 45.6 million tons of greenhouse gases a year. That’s more climate-warming pollution than from 10 large coal-fired power plants operating around the clock for a year, or from 8.9 million additional cars and trucks on America’s roads.2
LNG is natural gas that has been cooled to a liquid state, allowing it to be exported on tankers to overseas markets that would otherwise be inaccessible through pipeline transport. It is produced using liquefaction units – called “trains” by the industry – which remove impurities and then liquefy or condense the gas at sub-zero temperatures.
The COVID-19 recession came at a time when the world was already swimming in natural gas. In February, before the impacts of the crisis began to take effect, the U.S. Energy Information Administration (EIA) reported that natural gas storage volumes were on track to reach the highest level ever recorded, partially as a result of additional production growth spurred by new and expanding LNG terminals.3
The LNG industry had been expanding dramatically before the pandemic. On top of the 10 projects with known delays mentioned at the beginning of this report (because companies have failed to make final investment decisions expected by now) are another 7 projects that have received federal or state authorizations within the last 18 months whose status is unclear. In these cases, no construction has begun, but final investment decisions by the companies are not expected until later in 2020 or in future years. If all 17 of these projects become operational, they would have the potential to emit over 67 million tons of greenhouse gases annually. That figure also represents the greenhouse gases that could potentially be avoided if they are never built.
That outcome is looking increasingly likely for many of these projects, with a majority already experiencing documented delays. The COVID-19 recession threatens to compound a situation for the LNG industry that was already tenuous because of overproduction, chronically low energy prices, and waning energy demand. 4
This report attempts to analyze the scope of the LNG infrastructure buildout that is planned in the U.S., as well as its viability and environmental impact. Our analysis highlights which projects have already been delayed, as well as the emissions that could be avoided if projects that have not been constructed never materialize. The LNG terminals included in our analysis have been approved by the Federal Energy Regulatory Commission5 or have been issued final Clean Air Act construction permits by state agencies.
To better illustrate the emissions impacts associated with the LNG infrastructure buildout, this report also takes into account potential emission increases from new or expanding compressor stations that are related to existing or proposed LNG terminals and their associated pipeline networks, but that have obtained separate major Clean Air Act construction permits.
In addition to greenhouse gases, LNG terminals also release air pollutants that threaten the health of local residents, including tons of sulfur dioxide (which damages the lungs), nitrogen oxides and volatile organic compounds (both of which contribute to smog), microscopic soot or particulate matter (which can trigger asthma and heart attacks), and carbon monoxide (which can inhibit oxygen intake to the heart and brain).
Although the COVID-19 recession is a tragedy, it might also be an opportunity for companies and regulators to re-think projects that might not be necessary, given the glut of gas, the impact on the climate and public health, and the availability of increasingly cheap alternative energy sources. At the core of this issue is the question of what is really “necessary” for America’s future? Is it the Trump Administration’s policy of “energy dominance,” which is a backdrop for growing American LNG exports? Or are there cleaner (and sometimes cheaper) ways to meet our energy needs without compromising public health or fueling global warming?
Key Findings of this Report
▪ Companies have been authorized to construct, but have yet to break ground on, 12 new LNG terminals and 5 expansions, including additions to plants already operating. Together, these 17 projects have the potential to emit over 67 million tons of greenhouse gases per year. That’s more climate-warming pollution than is released from 16 coal-fired power plants operating around the clock for a year.
▪ Included in these 17 projects are 10 with known delays that have the potential to emit 45.6 million tons of greenhouse gases per year. These delayed projects – six new terminals and four expansions – are expected to add 20 billion cubic feet per day of liquefaction capacity to the U.S. LNG sector by 2026.
▪ In addition to greenhouse gases, LNG terminals also release air pollutants that are hazardous to human health. If all 17 projects that have been authorized for construction by government but not yet built become operational, they could release up to 4,000 tons per year of particulate matter, as well as 17,900 tons of nitrogen oxides, 27,000 tons of volatile organic compounds, 1,200 tons of sulfur dioxide, and 42,300 tons of carbon monoxide.
▪ LNG terminals also are reliant on supporting infrastructure, such as pipelines and compressor stations. Our findings show that compressor stations alone could add more than 8 million tons of greenhouse gases to the LNG sector’s emissions footprint. That’s almost equivalent to the carbon output of two new coal-fired power plants.
▪ Construction of LNG terminals and their associated pipelines and compressors could harm local air quality by stirring up dust and particulate matter in the short-term and release nearly 11 million tons of greenhouse gases over a period of three to eight years.
▪ Many of these massive projects have been planned in minority or lower-income communities. About 38 percent of the people living within three miles of proposed LNG facilities are people of color and Hispanics or Latinos, and 39 percent are low-income (defined as households earning less than $24,120 annually). 6
▪ Six of the delayed LNG projects, including four new terminals and two expansion projects, have federal Clean Air Act permits that were issued more than three years ago. And two of these projects had permits whose extensions expired this year. In Jefferson County, Texas, the Port Arthur LNG terminal’s permit extension expired on August 17. In Calcasieu Parish, Louisiana, the Magnolia LNG terminal’s extension expired on September 21.
▪ Several studies have shown that long-term exposure to air pollution increases the risk of illness or death from COVID-19.7 Local and state permitting authorities need to carefully consider the added health risks of proposed projects during this unprecedented public health crisis. Because communities of color and low-income populations are more likely to live near industrial facilities and other major pollution sources, policymakers also need to consider the disproportionate health burden they bear when approving permits.
▪ The natural gas industry has been struggling for years to finance proposed projects as a result of chronic oversupply, depressed energy prices, and public opposition. Despite the challenging economic climate, policymakers have continued to offer tax breaks and government incentives to risky LNG projects that threaten air quality while locking-in future demand for fossil fuels. Regulators need to take market realities into account, and stop allowing oil and gas companies’ volatile financing schedules to dictate project planning.
▪ The Clean Air Act requires facilities to begin construction within a reasonable amount of time after receiving the necessary permit approvals. Six of the planned LNG projects have permits that were issued more than three years ago. Given the significant impacts these projects would have on global warming and local air quality, and the shrinking global demand for LNG, state environmental agencies should consider canceling these permits and deferring approval of any more applications.
New Energy is in the last minute. Joe shows he knows where the best future is. The president shows he knows how to repeat lies. From Newsweek via YouTube
Greta continues to make good trouble. “I don’t care about being popular. I care about climate justice.”From Mongrel Media via YouTube
Acting on climate change can get us out of recession. There are no excuses left; The IMF says we can increase economic growth over the next 15 years and decrease emissions to net zero by 2050
Greg Jericho, 17 October 2020 (UK Guardian)
“…October is generally not a good month for news on climate change…[NASA just] announced that September was the hottest September on record, and a new study found the Great Barrier Reef has more than halved in size over the past 25 years…And it is easy to ignore climate change in the midst of a pandemic and economic recession…[But, according to the International Monetary Fund 2020 World Energy Outlook, acting on climate change will help us deal with the recession because it] boosts growth in the short term and massively prevents economic destruction later…It estimated that on a business-as-usual approach, temperatures are likely to reach 5C above the pre-industrial average by 2095 – in 75 years’ time…
…[Given the aim is to limit warming to just 2C, 5C] means frequent year-long droughts, southern Europe looking like the Sahara desert, and billions of people migrating closer to the poles…[But the IMF report also proposes a way out with a price on carbon] that starts at between US$6 and US$20 a ton of CO2 and reaches between US$40 and US$150 in 2050…The IMF estimates it will knock back annual GDP growth by a touch over 2% by the end of the decade…[But environmental measures] will boost economic growth…[A price on carbon and massive investment] can prevent catastrophic climate change while also getting us out of a recession…Win-win. And no political party has any excuse not to act.” click here for more
'Astounding effort': Global power networks link to boost renewables and halve emissions; New consortium hopes to sweep away technical barriers to wind and solar integration
Andrew Lee, 20 October 2020 (RECHARGE)
More than 30 of the world’s biggest power system operators will join forces in a bid to sweep away the technical barriers to getting more renewables onto electricity networks, with an aim to help drive down emissions by 50% in ten years…The Global Power System Transformation Consortium (G-PST) plans to ease the path for new technologies in power electronics and digitalisation, in what one group member called an “astounding” scale of collaboration and ambition…Outdated and under-invested power systems are emerging as a major focus of concern as the amount of variable renewable energy increases on networks around the world…
…G-PST plans to “dramatically accelerate the transition to low emission and low cost, secure, and reliable power systems, contributing to >50% emission reductions of all pollutants globally over the next 10 years, by enabling the efficient integration of substantial clean energy investments into power systems”…Digitalisation, machine learning and other advanced technologies will all need to play a part in the transformation…” click here for more
Audit of Hawaiian Electric sends a postcard about the future of regulation; Hawaiian Electric’s shortcomings show the nation how traditional regulation's weaknesses drive the need for performance-based regulation in the power sector.
Herman K. Trabish, July 13, 2020 (Utility Dive)
Editor’s note: No major new audits announced this year, but let’s face it – this year doesn’t really count.
Hawaii's latest postcard from the power sector's future is the management audit its Public Utility Commission (HPUC) ordered in the Hawaiian Electric 2019 general rate case, which highlighted significant opportunities for a new kind of regulation.
The audit revealed weaknesses in business and operational practices that regulators, utility leaders and stakeholders can address as the state moves toward performance based regulation (PBR), the audit reported. The audit found strengths, but identified weaknesses, especially in the company's Energy Delivery division, where "urgent corrective actions" could "deliver annual benefits for customers" of $46 million by 2023.
"We're taking ownership of the need shown in the audit for us to become more efficient in a lot of areas," Hawaiian Electric CEO Scott Seu told Utility Dive. "Our very explicit commitment is that we are going to do that as our company transitions to 100% renewables and new regulation."
But the corporate culture revealed in the audit may prevent Hawaiian Electric from meeting that commitment, some stakeholders said. That prospect for failure will require special attention from regulators as Hawaii moves into the biggest U.S. test of PBR, they added.
It also makes the audit a message to regulators across the country, Rábago Energy Principal and former Texas electric utilities regulator Karl Rábago told Utility Dive. "Audits are not uncommon, but they are more uncommon than they should be, given the transformation in the electric utility sector," Rábago said.
A "management audit will help ensure Hawaiian Electric is operating in a prudent and efficient manner for the benefit of ratepayers" and "identify opportunities for improved performance," the HPUC's September 2019 order initiating the audit reported… click here for more
The TVA’s slower pace toward renewable energy weakens Nashville’s future, report finds; The report suggests Nashville and communities in seven southeast states could suffer economically if the TVA doesn’t speed up its energy transition
James Bruggers, October 7, 2020 (Inside Climate News)
A growing number of electric utilities in the United States have made pledges to reach "net-zero" carbon dioxide emissions by 2050. But not the Tennessee Valley Authority, the nation's largest public utility…[And, according to a new report, TVA's energy policies could make Nashville, also called Music City,] less attractive as a venue for businesses that are decarbonizing their operations… throughout the TVA's seven-state service area…As a monopoly, TVA is insulated from competitive market pressures. But it is also subject to pressure from the federal government…[B]efore the TVA board voted in 2019 to close two antiquated coal-fired power plants in Kentucky and Tennessee, it heard complaints from President Donald Trump, Sen. Majority Leader Mitch McConnell, R-Kentucky, and Gov. Matt Bevin, R-Kentucky…
...[L]arger cities within TVA's territory have been asking for more renewable energy…[and] have pledged to meet the goals of the Paris climate agreement…Memphis has been studying whether to leave the TVA, and whether renewable energy could help lower electricity rates…[Nashville, Knoxville, and Memphis were recently ranked in the bottom half] among 100 major American cities in efforts to make buildings and transportation more energy efficient and to scale up the use of renewable energy…[TVA officials say nuclear and hydroelectric power will increase carbon-free electricity from 56 percent this year to 70 percent] by 2030…[but if] TVA's plans are projected to 2050, its percentage of total renewable energy capacity would be, on average, 40 percent less by 2050 than the utilities in [comparable] cities…The report recommends, among other things, that Nashville work with the TVA to set a 2050 carbon reduction goal that achieves at least 80 percent—and preferably, 100 percent—reduction in emissions…[and] increase renewable energy generation…” click here for more
Economic Impact Of Stimulus Investment In Advanced Energy; An Economic Assessment Of Applying Stimulus Funds To Advanced Energy Technologies, Products, And Services In California
Paul Hibbard and Pavel Darling, September 2020 (Analysis Group via Advanced Energy Economy)
In the wake of the coronavirus pandemic, states will need to make decisions about where and how to invest government dollars – whether state funds dedicated for this purpose or potential stimulus funding from the federal government – to get their economies moving again.
This report focuses on one way in which government stimulus dollars could be put to work in the state of California – investment in advanced energy technologies. Focusing stimulus spending on programs and infrastructure in advanced energy technologies can generate economic activity while also helping California achieve its ambitious energy and climate goals.
For the purpose of this analysis, we postulate a hypothetical level of stimulus spending invested across a range of advanced energy technologies and services: energy efficiency, renewable energy (solar and wind), electrification of buildings, electrification of transportation (electric vehicles and charging infrastructure), energy storage, grid modernization (smart meters, microgrids), and high-voltage transmission.
We then estimate the economic impact of these investments using an industry-standard macroeconomic model (IMPLAN), focusing on overall contribution to the California economy, level of private spending and investment stimulated by these investments, jobs created, and consumer savings on energy costs.
The results of the analysis point to strong economic benefits associated with advanced energy technology investments. In short, an advanced energy stimulus investment of $100 billion in California would produce the following economic benefits:
Over $700 billion added to the California economy;
Over 4 million new jobs, measured in job-years, resulting in a mix of short-term construction/installation employment and more ongoing positions;
Almost $46 billion in additional tax revenues to local and state governments; and
Over $28 billion in annual consumer savings.
A greater or lesser level of stimulus investment would result in greater or lesser economic impact. But our analysis finds that advanced energy stimulus investments can generate important and positive economic benefits in the state of California, adding substantial value to the California economy, creating millions of jobs, and sending additional revenue to state and local governments.
Overview And Findings
As of September, over 190 countries have responded to the worldwide coronavirus pandemic with some form of economic relief. 1 The specifics vary widely, but the basic idea is the same: introduce public money to bolster health care efforts, support people’s ability to meet basic needs, help businesses that are threatened, and stimulate economic activity to generate income and jobs.
In the U.S., individual states have also had to respond to the public health crisis with emergency spending measures. Going forward, they too will be faced with the challenge of jumpstarting their economies in its wake. Whether in dedicating state funds for this purpose or making decisions about where to put federal stimulus funds (should they be forthcoming), states will need to make decisions about how to deploy dollars to stimulate economic growth.
In this report we focus on one way in which government stimulus dollars could be put to use in the state of California – investment in advanced energy technologies. Focusing stimulus spending on programs and infrastructure in advanced energy technologies can generate economic activity while also helping California achieve its ambitious energy and climate goals. The advanced energy technologies considered for the analysis include:
Energy efficiency (EE) measures and programs;
Renewable electric generating resources (solar, wind);
Electrification of buildings (electric heating, cooling, and appliance installations);
Electrification of transportation (public investment in or support for private or commercial vehicle charging infrastructure, and support for the purchase of electric vehicles (EV));
Energy storage installation;
Grid modernization and distributed grid resources (e.g., smart meters, microgrids, combined heat and power, and other integrated distribution system technologies);
High-voltage transmission to access remote renewable resources (e.g., new wind resources); and
Other low/zero-carbon fuel sources.
The analysis sets a hypothetical level of stimulus spending and allocates the stimulus dollars across advanced energy technologies. It then estimates the economic impacts of these investments using an industry-standard macroeconomic model (IMPLAN), focusing on a number of key questions:
How would public investments in a range of advanced energy technologies affect the state’s economy, and generate jobs and tax revenues?
To what extent would public spending in these areas stimulate private investment, and amplify the economic impacts of the stimulus spending?
How do the results in overall economic activity, job growth, and other economic benefits vary across the technologies and programs?
The starting point for the analysis is a hypothetical $100 billion of economic stimulus investment, spread across a range of advanced energy technologies (as described in Section III). Allocation of this investment is weighted toward technologies and products that based on historical experience are likely to generate significant in-state economic activity, with incentive levels designed to attract participation from customers and investors, thereby adding private investment to the overall economic impact.
The results of the analysis point to advanced energy stimulus spending as a strong pump-primer for private investment, job creation, and economic growth. In short, $100 billion of advanced energy stimulus investment in California would generate the following economic benefits:
Over $700 billion added to the California economy;
Over 4 million new jobs, measured in job-years, resulting in a mix of short-term construction or installation employment and more ongoing positions;
Almost $46 billion in additional tax revenues to local and state governments; and
Over $28 billion in annual consumer savings.
All categories of advanced energy stimulus spending generate positive impact on the economy, jobs, and tax revenue. The overall benefits accrue due to the direct impact of stimulus spending and private investment, as well as additional economic activity induced by the additional flow of dollars in the economy.
Figures 1 and 2 show how our allocation of $100 billion in stimulus – which is representative rather than prescriptive – translates into economic activity on a technology-by-technology basis, as measured by overall economic impact (addition to Gross State Product, or GSP) and jobs created. In total, $100 billion of advanced energy stimulus results in $263 billion in complementary private investment, $727 billion in overall economic activity, and increase in employment of 4.1 million jobs, measured in job-years, for California.
Energy efficiency investments give the greatest overall boost to the California economy, totaling $373 billion in GSP. The next biggest impact comes from renewable energy generation (solar and wind), totaling $163 billion, followed by electrification of transportation, with $80 billion in economic activity. Energy storage contributes $46 billion and building electrification $41 billion. Transmission and grid modernization combine for another $23 billion in GSP. (See Figure 1.)
In terms of jobs, energy efficiency creates over 1.9 million jobs, calculated in job-years (i.e., a job created by stimulus spending that lasts one year equals one job-year; a new job that is supported by the spending for three years equals three job-years) and resulting in a mix of short-term construction or installation employment and more ongoing positions. Renewable energy investments produce over 850,000 jobs, and electric vehicles over 475,000. Energy storage investments generate nearly 380,000 jobs and building electrification over 320,000; over 180,000 new jobs result from grid modernization and transmission investments. (See Figure 2, next page.)
In addition, certain advanced energy investments provide direct savings to consumers associated with reduced electricity consumption, increased savings from onsite solar production, and reduced fuel costs by use of electric vehicles.2 Based on our representative allocation of $100 billion of stimulus funds for California, energy savings would come to over $28 billion annually. Of this total, $15.3 billion in savings would come from residential energy efficiency, $3.1 billion from residential rooftop solar, $1.6 billion from EV fuel savings, and $8.7 billion from commercial energy efficiency and onsite solar. (See Figure 3, next page.)
Finally, the additional economic activity created by $100 billion in advanced energy stimulus is projected to increase tax revenues for state and local government by $45.8 billion per year.
A greater or lesser level of stimulus investment would result in greater or lesser economic impact. But our analysis finds that advanced energy stimulus investments can generate important and positive economic benefits in the state of California, adding substantial value to the California economy, creating millions of jobs, and sending additional revenue to state and local governments. In Section III we provide more detail on the analytic method and economic model behind this analysis, the data and assumptions applied, and the various modeling inputs and outputs resulting from the analysis…
Solar is now the "cheapest electricity" ever, anywhere, in most major markets, according to the just-released International Energy Agenct World Energy Outlook 2020. From KXAN via YouTube
In the "Amazon Chernobyl," a 1,700-square-mile stretch of rain forest was turned into an environmental disaster by Texaco-Chevron. From Vice via YouTube
Forest fires and hurricanes are not the biggest problem. From 60 Minutes via YouTube
World Energy Outlook 2020 shows how the response to the Covid crisis can reshape the future of energy
13 October 2020 (International Energy Agency)
“…The Covid-19 crisis has caused more disruption than any other event in recent history…But whether this upheaval ultimately helps or hinders efforts to accelerate clean energy transitions and reach international energy and climate goals will depend on how governments respond to today’s challenges…[The World Energy Outlook 2020] provides the latest IEA analysis of the pandemic’s impact: global energy demand is set to drop by 5% in 2020, energy-related CO2 emissions by 7%, and energy investment by 18%...[It shows] how the energy sector could develop…
…[Renewables meet 80% of global electricity demand growth over the next decade in] the Stated Policies Scenario, which reflects today’s announced policy intentions and targets, [and] global energy demand rebounds to its pre-crisis level in early 2023…[T]his does not happen until 2025 in the event of a prolonged pandemic and deeper slump, as shown in the Delayed Recovery Scenario. Slower demand growth lowers the outlook for oil and gas prices compared with pre-crisis trends. But large falls in investment increase the risk of future market volatility…
…[Countries and companies hitt their announced net-zero emissions targets on time and in full, bringing the entire world to net zero by 2070 in the Sustainable Development Scenario…As well as rapid growth of solar, wind and energy efficiency technologies, the next 10 years would see a major scaling up of hydrogen and carbon capture, utilisation and storage, and new momentum behind nuclear power…[I]n the new Net Zero Emissions by 2050 case, would demand a set of dramatic additional actions over the next 10 years. Bringing about a 40% reduction in emissions by 2030 requires, for example, that low-emissions sources provide nearly 75% of global electricity generation in 2030, up from less than 40% in 2019 – and that more than 50% of passenger cars sold worldwide in 2030 are electric, up from 2.5% in 2019…” click here for more
An energy world in lockdown; How has Covid-19 changed the game?
October 2020 (International Energy Agency)
The Covid-19 pandemic has introduced major new uncertainties for the energy sector and increased dramatically the range of pathways that it could follow. The key questions include the duration of the pandemic, the shape of the recovery, and whether energy and sustainability are built into the strategies adopted by governments to kick-start their economies…Overall, we estimate that energy demand in 2020 is set to be 5% lower than in 2019. Since the most carbon-intensive fuels, coal and oil, are bearing the brunt of this demand reduction, and renewables are least affected, CO2 emissions are set to fall by nearly 7%.
Capital investment in the energy sector is anticipated to fall by 18% in 2020, with the largest drop in spending on new oil and natural gas supply. This slump in investment is likely to have major repercussions for energy markets in the coming years, even though the economic downturn is also putting downward pressure on demand. The crisis is meanwhile provoking changes in the strategic orientation of companies and investors, as well as in consumer behaviour…There can be no single answer about where the energy world goes from here…” click here for more
Momentum grows for piloting Netflix-like fixed subscription rates, but not everyone's on board; A new flat bill concept can meet customer demand for simpler bills if smart technologies prevent abuse
Herman K. Trabish, July 7, 2020 (Utility Dive)
Editor’s note: Innovative rate design continues to move forward in support of the power sector’s energy transition.
Momentum is growing for giving electricity customers the kind of predictable subscription bill options that smartphone and home entertainment customers get.
Fixed rates — once preferred to align costs and revenues — are losing regulatory support as variable supply and load make demand peaks the bigger concern. Dynamic rates with price signals that flatten peaks and shift load to match supply are becoming the favored rate design. But the subscription rate concept, coupled with enabling smart home energy management technologies, is gaining momentum and could offer the benefits of both.
"Energy costs today are higher than they should be because customers value bill simplicity more than savings or environmental impacts," Brattle Group Principal Ryan Hledik, co-author of a new paper outlining a subscription-based rate design, told Utility Dive. "A FixedBill+ rate can combine a fixed bill's simplicity with the energy use benefits of energy efficiency and demand response," he said.
A groundbreaking 2018 subscription rate proposal by Lon Huber was less explicit about the role of enabling technologies and potential savings. Huber worked for Navigant at the time, but is now vice president for rate design and strategic solutions at Duke Energy. "Many customers are no more interested in the electricity system details on their bills than they are in IT protocols and servers that stream their Netflix subscription," Huber told Utility Dive. "New energy service subscription concepts can stabilize the bill, increase clean resources, and lower electricity costs for all customers." It is time for real world pilots of a subscription rate coupled with enabling technologies, Huber, Hledik and other advocates said.
But regulators must be cautious because poorly designed subscription approaches and those that do not include access to enabling technologies could lead to over-consumption that imposes costs on other customers and compromises utility revenues needed for a reliable power system, electricity retailers and authorities on rate design told Utility Dive.
Surveys show some customers "prefer simplicity and freedom from managing their energy," the June 2020 Brattle Group-Energy Impact Partners (EIP) paper found. Instead of a bill for the changing amount of electricity a customer consumes each month, FixedBill+ would offer a monthly bill "guaranteed to remain constant for a specified term." The voluntary rate is like those from "a growing number of subscription-based consumer goods" providers, the paper reported. Though interest from utilities, competitive electricity retailers, and third-party energy managers is growing, there are few results of real-world applications for electricity, they told Utility Dive… click here for more
25-Year Study of Nuclear vs Renewables Says One Is Clearly Better at Cutting Emissions
David Nield, 11 October 2020 (Science Alert)
Nuclear power is often promoted as one of the best ways to reduce our reliance on fossil fuels to generate the electricity we need, but new research suggests that going all-in on renewables such as wind and solar might be a better approach to seriously reducing the levels of carbon dioxide in the atmosphere…Based on an analysis of 123 countries over a quarter of a century, the adoption of nuclear power did not achieve the significant reduction in national carbon emissions that renewables did – and in some developing nations, nuclear programmes actually pushed carbon emissions higher.
The study also finds that nuclear power and renewable power don't mix well when they're tried together: they tend to crowd each other out, locking in energy infrastructure that's specific to their mode of power production. Given nuclear isn't exactly zero carbon, it risks setting nations on a path of relatively higher emissions than if they went straight to renewables…It's important to note that the study looked specifically at data from 1999-2014, so it excludes more recent innovations in nuclear power and renewables, and the scientists themselves say they have found a correlation, rather than cause and effect. But it's an interesting trend that needs further investigation…” click here for more
Managing Climate Risk In The U.S. Financial System
September 2020 (The Climate-Related Market Risk Subcommittee, Market Risk Advisory Committee of the U.S. Commodity Futures Trading Commission)
Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy. Climate change is already impacting or is anticipated to impact nearly every facet of the economy, including infrastructure, agriculture, residential and commercial property, as well as human health and labor productivity. Over time, if significant action is not taken to check rising global average temperatures, climate change impacts could impair the productive capacity of the economy and undermine its ability to generate employment, income, and opportunity. Even under optimistic emissionsreduction scenarios, the United States, along with countries around the world, will have to continue to cope with some measure of climate change-related impacts.
This reality poses complex risks for the U.S. financial system. Risks include disorderly price adjustments in various asset classes, with possible spillovers into different parts of the financial system, as well as potential disruption of the proper functioning of financial markets. In addition, the process of combating climate change itself—which demands a large-scale transition to a net-zero emissions economy—will pose risks to the financial system if markets and market participants prove unable to adapt to rapid changes in policy, technology, and consumer preferences. Financial system stress, in turn, may further exacerbate disruptions in economic activity, for example, by limiting the availability of credit or reducing access to certain financial products, such as hedging instruments and insurance.
A major concern for regulators is what we don’t know. While understanding about particular kinds of climate risk is advancing quickly, understanding about how different types of climate risk could interact remains in an incipient stage. Physical and transition risks may well unfold in parallel, compounding the challenge. Climate risks may also exacerbate financial system vulnerabilities that have little to do with climate change, such as historically high levels of corporate leverage. This is particularly concerning in the short- and medium-term, as the COVID 19 pandemic is likely to leave behind stressed balance sheets, strained government budgets, and depleted household wealth, which, taken together, undermine the resilience of the financial system to future shocks
The central message of this report is that U.S. financial regulators must recognize that climate change poses serious emerging risks to the U.S. financial system, and they should move urgently and decisively to measure, understand, and address these risks. Achieving this goal calls for strengthening regulators’ capabilities, expertise, and data and tools to better monitor, analyze, and quantify climate risks. It calls for working closely with the private sector to ensure that financial institutions and market participants do the same. And it calls for policy and regulatory choices that are flexible, open-ended, and adaptable to new information about climate change and its risks, based on close and iterative dialogue with the private sector.
At the same time, the financial community should not simply be reactive—it should provide solutions. Regulators should recognize that the financial system can itself be a catalyst for investments that accelerate economic resilience and the transition to a net-zero emissions economy. Financial innovations, in the form of new financial products, services, and technologies, can help the U.S. economy better manage climate risk and help channel more capital into technologies essential for the transition.
Findings of the Report
This report begins with a fundamental finding—financial markets will only be able to channel resources efficiently to activities that reduce greenhouse gas emissions if an economy-wide price on carbon is in place at a level that reflects the true social cost of those emissions. Addressing climate change will require policy frameworks that incentivize the fair and effective reduction of greenhouse gas emissions. In the absence of such a price, financial markets will operate suboptimally, and capital will continue to flow in the wrong direction, rather than toward accelerating the transition to a net-zero emissions economy. At the same time, policymakers must be sensitive to the distributional impacts of carbon pricing and other policies and ensure that the burden does not fall on low-to-moderate income households and on historically marginalized communities. This report recognizes that pricing carbon is beyond the remit of financial regulators; it is the job of Congress.
A central finding of this report is that climate change could pose systemic risks to the U.S. financial system. Climate change is expected to affect multiple sectors, geographies, and assets in the United States, sometimes simultaneously and within a relatively short timeframe. As mentioned earlier, transition and physical risks—as well as climate and non-climate-related risks—could interact with each other, amplifying shocks and stresses. This raises the prospect of spillovers that could disrupt multiple parts of the financial system simultaneously. In addition, systemic shocks are more likely in an environment in which financial assets do not fully reflect climate-related physical and transition risks. A sudden revision of market perceptions about climate risk could lead to a disorderly repricing of assets, which could in turn have cascading effects on portfolios and balance sheets and therefore systemic implications for financial stability
At the same time, this report finds that regulators should also be concerned about the risk of climate-related “sub-systemic” shocks. Sub-systemic shocks are defined in this report as those that affect financial markets or institutions in a particular sector, asset class, or region of the country, but without threatening the stability of the financial system as a whole. This is especially relevant for the United States, given the country’s size and its financial system, which includes thousands of financial institutions, many regulated at the state level. Sub-systemic shocks related to climate change can undermine the financial health of community banks, agricultural banks, or local insurance markets, leaving small businesses, farmers, and households without access to critical financial services. This is particularly damaging in areas that are already underserved by the financial system, which includes low-to-moderate income communities and historically marginalized communities.
The report finds that, in general, existing legislation already provides U.S. financial regulators with wide-ranging and flexible authorities that could be used to start addressing financial climate-related risk now. This is true across four areas—oversight of systemic financial risk, risk management of particular markets and financial institutions, disclosure and investor protection, and the safeguarding of financial sector utilities. Presently, however, these authorities and tools are not being fully utilized to effectively monitor and manage climate risk. Further rulemaking, and in some cases legislation, may be necessary to ensure a coordinated national response.
While some early adopters have moved faster than others in recent years, regulators and market participants around the world are generally in the early stages of understanding and experimenting with how best to monitor and manage climate risk. Given the considerable complexities and data challenges involved, this report points to the need for regulators and market participants to adopt pragmatic approaches that stress continual monitoring, experimentation, learning, and global coordination. Regulatory approaches in this area are evolving and should remain open to refinement, especially as understanding of climate risk continues to advance and new data and tools become available.
Insufficient data and analytical tools to measure and manage climate-related financial risks remain a critical constraint. To undertake climate risk analysis that can inform decision-making across the financial system, regulators and financial institutions need reliable, consistent, and comparable data and projections for climate risks, exposure, sensitivity, vulnerability, and adaptation and resilience. Demand will likely grow for public and open access to climate data, including for primary data collected by the government. Public data will enable market participants to, among other things, compare publicly available disclosure information and sustainability-benchmarked financial products. At the same time, proprietary data and analytical products can introduce innovations that improve climate risk management. A key challenge will be how best to balance the need for transparency through public data on one hand, with the need to foster private innovation through proprietary data, on the other.
The lack of common definitions and standards for climate-related data and financial products is hindering the ability of market participants and regulators to monitor and manage climate risk. While progress has been made in this area thanks to voluntary disclosure frameworks and work by foreign regulators, the lack of standards, and differences among standards, remains a barrier to effective climate risk management. The problem is compounded by a lack of international coordination on data and methodology standards. A common set of definitions for climate risk data, including modeling and calculation methodologies, is important for developing the consistent, comparable, and reliable data required for effective risk management. Also, taxonomies or classification systems can help foster greater transparency and comparability in markets for financial products labeled as “green” or “sustainable.”
Climate-related scenario analysis can be a useful tool to enable regulators and market participants to understand and manage climate-related risks. Scenarios illustrate the complex connections and dependencies across technologies, policies, geographies, societal behaviors, and economic outcomes as the world shifts toward a net-zero emissions future. Scenario analysis can help organizations integrate climate risks and opportunities into a broader risk management framework, as well as understand the potential short-term impact of specific triggering events. Scenario analysis is gaining traction in several contexts, both domestically and internationally, and regulators are increasingly using scenario analysis to foster greater risk awareness among financial market actors.
Yet, the limitations of scenario analysis should be recognized. While useful, climate scenarios and the models that analyze them have important limitations. Scenarios are sensitive to key assumptions and parameters, most have been developed for purposes other than financial risk analysis, and they cannot fully capture all the potential effects of climate- and policy-driven outcomes. Scenario analysis should have a valuable place in the risk management toolkit, but it should be used with full awareness of what it can and cannot do.
The disclosure by corporations of information on material, climate-related financial risks is an essential building block to ensure that climate risks are measured and managed effectively. Disclosure of such information enables financial regulators and market participants to better understand climate change impacts on financial markets and institutions. Issuers of securities can use disclosure to communicate risk and opportunity information to capital providers, investors, derivatives customers and counterparties, markets, and regulators. Issuers of securities can also use disclosures to learn from peers about climate-related strategy and best practices in risk management. Investors can use climate-related disclosures to assess risks to firms, margins, cash flows, and valuations, allowing markets to price risk more accurately and facilitating the risk-informed allocation of capital.
Demand for disclosure of information on material, climate-relevant financial risks continues to grow, and reporting initiatives have led to important advances. Investors and financial market actors have long called for decision useful climate risk disclosures, and in 2019, more than 630 investors managing more than $37 trillion signed the Global Investor Statement to Governments on Climate Change, which called on governments to improve climate-related financial reporting. Disclosure frameworks have been developed to enhance the quality and comparability of corporate disclosures, most notably, the Task Force on Climate-related Financial Disclosures (TCFD). Also, in 2010, the U.S. Securities and Exchange Commission (SEC) published Commission Guidance Regarding Disclosure Related to Climate Change, which provides public companies with interpretive guidance on existing SEC disclosure requirements as they apply to climate change.
However, the existing disclosure regime has not resulted in disclosures of a scope, breadth, and quality to be sufficiently useful to market participants and regulators. While disclosure rates are trending in a positive direction, an update published by the TCFD found that surveyed companies only provided, on average, 3.6 of the 11 total TCFD recommended disclosures. Large companies are increasingly disclosing some climate-related information, but significant variations remain in the information disclosed by each company, making it difficult for investors and others to understand exposure and manage climate risks. In addition, the 2010 SEC Guidance has not resulted in high-quality disclosure across U.S. publicly listed firms; it could be updated in light of global advancements in the past 10 years.
In addition to the absence of an economy-wide carbon pricing regime in the United States, other barriers are holding back capital from flowing to sustainable, low-carbon activities. One involves the misperception among mainstream investors that sustainable or ESG (environmental, social, and governance) investments necessarily involve trading off financial returns relative to traditional investment strategies. Another is that the market for products widely considered to be “green” or “sustainable” remains small relative to the needs of institutional investors. In addition, lack of trust in the market over concerns of potential “greenwashing” (misleading claims about the extent to which a financial product or service is truly climate-friendly or environmentally sustainable) may be holding back the market. And policy uncertainty also remains a barrier, including in areas such as regulation affecting the financial products that U.S. companies may offer their employees through their employer-provided retirement plans.
These barriers can be addressed through a variety of initiatives. For example, a wide range of government efforts—through credit guarantees and other means of attracting private capital by reducing the risks of low-carbon investments—catalyze capital flows toward innovation and deployment of net-zero emissions technologies. A new, unified federal umbrella could help coordinate and expand these government programs and leverage institutional capital to maximize impact and align the various federal programs. Climate finance labs, regulatory sandboxes, and other regulatory initiatives can also drive innovation by improving dialogue and learning for both regulators and market innovators, as well as via business accelerators, grants, and competitions providing awards in specific areas of need. In addition, clarifying existing regulations on fiduciary duty, including for example, those concerning retirement and pension plans, to confirm the appropriateness of making investment decisions using climate-related factors—and more broadly, ESG factors that impact risk-return—can help unlock the flow of capital to sustainable activities and investments.
Derivatives markets can be part of the solution. Refinements or modifications could be made to existing instruments to reduce derivatives market participants’ risk exposure. For example, commodity derivatives exchanges could address climate and sustainability issues by incorporating sustainability elements into existing contracts and by developing new derivatives contracts to hedge climate-related risks. New products may include weather, ESG, and renewable generation and electricity derivatives. However, development of new derivatives will require that the relevant climate-related data is transparent, reliable, and trusted by market participants. This also applies to a wide range of asset classes that can direct capital to climate-related opportunities and help manage climate risk.
U.S. regulators are not alone in confronting climate change as a financial system risk; international engagement by the United States could be significantly more robust. Financial regulators and other actors have launched important initiatives to tackle the challenge. The United States already participates in the Basel Committee on Banking Supervision’s climate task force, the International Organization of Securities Commissions (IOSCO) sustainable finance network, and relevant committees within the Financial Stability Board (FSB) to study climate-related financial risks. However, at the federal level the United States is not yet a member of the Central Banks and Supervisors Network for Greening the Financial System (NGFS), the Coalition of Finance Ministers for Climate Action, or the Sustainable Insurance Forum (SIF). The Group of Seven (G7) and Group of Twenty (G20), in which the United States plays a central role, could also address this challenge and promote international cooperation, but only if the United States is supportive.
The full list of the report’s recommendations can be found at the end of relevant chapters and compiled in an annex at the end of this report. Below, we highlight some of the most important. We recommend that:
● The United States should establish a price on carbon. It must be fair, economy-wide, and effective in reducing emissions consistent with the Paris Agreement. This is the single most important step to manage climate risk and drive the appropriate allocation of capital. (Recommendation 1)
● All relevant federal financial regulatory agencies should incorporate climate-related risks into their mandates and develop a strategy for integrating these risks in their work, including into their existing monitoring and oversight functions. (Recommendation 4.1)
● The Financial Stability Oversight Council (FSOC)—of which the Commodity Futures Trading Commission (CFTC) is a voting member—as part of its mandate to monitor and identify emerging threats to financial stability, should incorporate climate-related financial risks into its existing oversight function, including its annual reports and other reporting to Congress. (Recommendation 4.2)
● Research arms of federal financial regulators should undertake research on the financial implications of climate-related risks. This research program should cover the potential for and implications of climate-related “sub-systemic” shocks to financial markets and institutions in particular sectors and regions of the United States, including, for example, agricultural and community banks and financial institutions serving low-to-moderate income or marginalized communities. (Recommendation 4.3)
● U.S. regulators should join, as full members, international groups convened to address climate risks, including the Central Banks and Supervisors Network for Greening the Financial System (NGFS), the Coalition of Finance Ministers for Climate Action, and the Sustainable Insurance Forum (SIF). The United States should also engage actively to ensure that climate risk is on the agenda of G7 and G20 meetings and bodies, including the FSB and related committees and working groups. (Recommendation 4.6)
● Financial supervisors should require bank and nonbank financial firms to address climate-related financial risks through their existing risk management frameworks in a way that is appropriately governed by corporate management. That includes embedding climate risk monitoring and management into the firms’ governance frameworks, including by means of clearly defined oversight responsibilities in the board of directors. (Recommendation 4.7)
● Working closely with financial institutions, regulators should undertake—as well as assist financial institutions to undertake on their own—pilot climate risk stress testing as is being undertaken in other jurisdictions and as recommended by the NGFS. This climate risk stress testing pilot program should include institutions such as agricultural, community banks, and non-systemically important regional banks. (Recommendation 4.8) In this context, regulators should prescribe a consistent and common set of broad climate risk scenarios, guidelines, and assumptions and mandate assessment against these scenarios. (Recommendation 6.6)
● Financial authorities should consider integrating climate risk into their balance sheet management and asset purchases, particularly relating to corporate and municipal debt. (Recommendation 4.10)
● The CFTC should undertake a program of research aimed at understanding how climate-related risks are impacting and could impact markets and market participants under CFTC oversight, including central counterparties, futures commission merchants, and speculative traders and funds; the research program should also cover how the CFTC’s capabilities and supervisory role may need to adapt to fulfill its mandate in light of climate change and identify relevant gaps in the CFTC’s regulatory and supervisory framework. (Recommendation 4.11)
● State insurance regulators should require insurers to assess how their underwriting activity and investment portfolios may be impacted by climate-related risks and, based on that assessment, require them to address and disclose these risks. (Recommendation 4.12) ● Financial regulators, in coordination with the private sector, should support the availability of consistent, comparable, and reliable climate risk data and analysis to advance the effective measurement and management of climate risk. (Recommendation 5.1)
● Financial regulators, in coordination with the private sector, should support the development of U.S.-appropriate standardized and consistent classification systems or taxonomies for physical and transition risks, exposure, sensitivity, vulnerability, adaptation, and resilience, spanning asset classes and sectors, in order to define core terms supporting the comparison of climate risk data and associated financial products and services. To develop this guidance, the United States should study the establishment of a Standards Developing Organization (SDO) composed of public and private sector members. (Recommendation 5.2)
● Material climate risks must be disclosed under existing law, and climate risk disclosure should cover material risks for various time horizons. To address investor concerns around ambiguity on when climate change rises to the threshold of materiality, financial regulators should clarify the definition of materiality for disclosing medium- and longterm climate risks, including through quantitative and qualitative factors, as appropriate. (Recommendation 7.2)
● In light of global advancements in the past 10 years in understanding and disclosing climate risks, regulators should review and update the SEC’s 2010 Guidance on climate risk disclosure to achieve greater consistency in disclosure to help inform the market. Regulators should also consider rulemaking, where relevant, and ensure implementation of the Guidance. (Recommendation 7.5)
● Regulators should require listed companies to disclose Scope 1 and 2 emissions. As reliable transition risk metrics and consistent methodologies for Scope 3 emissions are developed, financial regulators should require their disclosure, to the extent they are material. (Recommendation 7.6)
● The United States should consider integration of climate risk into fiscal policy, particularly for economic stimulus activities covering infrastructure, disaster relief, or other federal rebuilding. Current and ongoing fiscal policy decisions have implications for climate risk across the financial system. (Recommendation 8.1)
● The United States should consolidate and expand government efforts, including loan authorities and co-investment programs, that are focused on addressing market failures by catalyzing private sector climate-related investment. This effort could centralize existing clean energy and climate resilience loan authorities and co-investment programs into a coordinated federal umbrella. (Recommendation 8.2)
● Financial regulators should establish climate finance labs or regulatory sandboxes to enhance the development of innovative climate risk tools as well as financial products and services that directly integrate climate risk into new or existing instruments. (Recommendation 8.3)
● The United States and financial regulators should review relevant laws, regulations and codes and provide any necessary clarity to confirm the appropriateness of making investment decisions using climate-related factors in retirement and pension plans covered by the Employee Retirement Income Security Act (ERISA), as well as non-ERISA managed situations where there is fiduciary duty. This should clarify that climate-related factors—as well as ESG factors that impact risk-return more broadly—may be considered to the same extent as “traditional” financial factors, without creating additional burdens. (Recommendation 8.4)
● The CFTC should coordinate with other regulators to support the development of a robust ecosystem of climate-related risk management products. (Recommendation 8.5)