Today's climate and energy headlines:
- Climate change will wipe $2.5tn off global financial assets: study
- Climate change threatens hearts, lungs but also brains: U.S. study
- Judge approves $20B BP oil spill settlement
- Europe faces €253bn nuclear waste bill
- Scrapping Hinkley for renewable alternatives will save 'tens of billions'
- Massive carbon capture investment 'needed to slow global warming'
- The oil price and the impact of Opec’s failing states
- Airline emissions and the case for a carbon tax on flight tickets
- 'Climate value at risk' of global financial assets
- Potential escalation of heat-related working costs with climate and socioeconomic changes in China
- Drivers of peak warming in a consumption-maximizing world
Climate change could cut the value of the world’s financial assets by $2.5tn (£1.7tn), according to the first estimate from economic modelling, and in worst case scenarios could soar to a catastrophic $24tn, or 17% of the world’s assets, the Guardian reports. The study, published in Nature Climate Change, demonstrates the financial sense in attempts to limit global temperature rise to 2C: in this case the value of assets would fall by $315bn less, even when the costs of cutting emissions are factored in. Rising temperatures and dislocation caused by extreme weather will slow global economic growth and damage the performance of stocks and bonds, according to the report. “It makes financial sense to a risk-neutral investor to cut emissions, and even more so to the risk-averse,” lead author Professor Simon Dietz told Reuters. Mark Campanale of the Carbon Tracker Initiative told the Guardian that losses from unabated climate change could even more than estimated in the study: “It could be a lot worse. The loss of financial capital can be a lot higher and faster than the GDP losses [used to model the costs of climate change in the study]. Just look at the value of coal giant Peabody Energy. It was worth billions just a few years ago and now it is worth nothing.”
Climate change will contribute to a wide array of public health issues in the US the coming decades, such as boosting the number of annual premature deaths from heatwaves, and leading to an increase in mental health problems from extreme weather like hurricanes and floods, according to a White House report released yesterday. The study – born out of President Obama’s 2013 climate action plan, and a product of of three years of collaboration led by a trio of health and climate agencies – suggests that extreme heat alone will drive more than 11,000 additional deaths in the summer of 2030 and 27,000 additional deaths in the summer of 2100. Extreme heat can cause more forest fires and increase pollen counts and the resulting poor air quality threatens people with lung conditions such as asthma. Meanwhile post traumatic stress disorder, depression, and general anxiety can all result in places that suffer extreme weather linked to climate change. “The science has told us that climate change poses a serious risk to human health and that is really the most important takeaway from this report,” Surgeon General Vivek Murthy told the press. Gina McCarthy, the head of the US Environmental Protection Agency, said in a blog that the study backs up the Agency’s carbon regulations, the Hill reports. The Hill, the Guardian and Time Magazine also have the story.
A federal judge on yesterday approved a $20.8 billion settlement between the US government and BP over the 2010 Deepwater Horizon oil spill, ending years of litigation, and meaning that the majority of the cost of the accident is now known. The spill in the Gulf of Mexico released 3.19 million barrels of oil into the sea and killed 11 people. The settlement is the largest the US Department of Justice has ever agreed with a single company, the Financial Times reports. Reuters and the Guardian also have the story.
Europe is facing a €253bn bill for nuclear waste disposal and plant decommissioning which outstrips available funds by €120bn, the European commission has found. Of the EU’s 16 nuclear nations, only the UK had enough money ring-fenced to cover the coming financial crunch, according to the Nuclear Illustrative Programme of the Commission. Around 90% of the continent’s nuclear plants are set to shut by 2050, the Guardian reports. Energy Live News also carries the story.
Solar and wind would generate the equivalent power to Hinkley over the plant’s planned lifetime for £40bn less, finds analysis from the Intergenerational Foundation thinktank, which campaigns on fairness between generations. The report published today found that found that onshore windfarms would cost £31.2bn less than Hinkley, and solar photovoltaic power £39.9bn less over 35 years to build and run. A final investment decision by EDF on the nuclear power plant’s expansion is expected in May, the Guardian reports.
Combating climate change successfully will require massive investments in technologies to capture and store carbon dioxide, a new study from Oxford University has found. Prof Myles Allen said that reducing greenhouse gas emissions by other means, such as renewable energy generation, was important but would not get the world to its target of releasing ‘net zero emissions’ into the atmosphere, a goal that was enshrined in December’s Paris climate deal. The UK government last year scrapped its promised £1bn funding from one of the longest-running schemes to pioneer CCS technology. The Times also covers the study.
Does it matter for the oil market that three of Opec’s 13 member states can now be classed as failed or failing, asks Nick Butler in the Financial Times. Problems in Libya, Algeria and Venezuela have been compounded by the oil price fall. But failed states do not have to remain failures, Butler notes, and their production could soon rise. If so, those predicting a medium-term surge in oil prices might need to think again, he says.
Which countries are responsible for an aircraft’s emissions: the manufacturers, the owners or the countries that it visits? Experts in aviation climate law David Hodgkinson and Rebecca Johnston reflect on why many attempts to regulate international aviation emissions have “ended in tears”, and why there are “reasons to believe that the ICAO’s latest effort is problematic too”. A carbon tax “would address the aviation emissions problem far more effectively than the proposed draft ICAO offsetting resolution”, they say. “Applying a point-of-purchase carbon tax on airline tickets would level the playing field because everyone who flies would pay…with states setting the tax at a level appropriate to their (developed or developing) circumstances”.
As much as $24tn of global financial assets could be at risk due to climate change, a new study says. The researchers used an integrated assessment model to investigate the direct impact of climate change on the present value of global financial assets. “Limiting warming to no more than 2C makes financial sense to risk-neutral investors – and even more so to the risk averse,” the researchers conclude.
The cost of high-temperature subsidies (HTSs) to workers in China could increase significantly during the 21st century, a new study suggests. In mainland China, HTSs are paid to employees for each working day where temperatures exceed 35C. Total HTS costs currently amount to around 39bn yuan per year. But under a high emissions scenario, this could increase to 1tn yuan per year – 3% of GDP – by 2100, the researchers say.
The success of tackling climate change will rely on two main factors, a new study suggests: the cost of carbon capture and storage (CCS) and how economies around the world grow relative to their carbon emissions. Focusing purely on short-term emissions reductions may distract from the longer-term need to maintain economic growth and invest in large-scale CCS in order to make it more financially viable, the paper concludes.
Expert analysis directly to your inbox.