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Daily Briefing |


Briefing date 09.06.2021
UK banks to reveal exposure to climate crisis for first time

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UK banks to reveal exposure to climate crisis for first time
The Guardian Read Article

UK banks will be forced to reveal their exposure to climate change for the first time as part of the Bank of England’s “climate stress tests” this year, according to the Guardian. An update published on Tuesday and covered by the newspaper shows that the tests will assess how 19 banks and insurers will cope with three climate scenarios and how those scenarios impact potential loan losses, as customers default due to the economic impact of climate change. It notes that the Bank of England’s tests will not identify individual businesses and will only release aggregate results for the banking and insurance sector. The Guardian also adds that the information will not be used to set capital requirements, which “determine the kind of financial cushion that banks need in order to protect them from risky loans and products on their balance sheets”. It quotes David Barmes, the senior economist at the campaign group Positive Money, who says this is disappointing as “climate capital rules that reflect the high risk of fossil fuel investments are a necessary inevitability to ensure financial stability and alignment with the government’s climate plans”.

The Financial Times adds that the stress tests had been “scaled-back” as participants were concerned they would be unable to model the exposures of potentially thousands of business partners to everything from climate-related regulatory changes to flooding. It notes that while central banks around the world have started embracing climate stress testing, they have also been “keen to impress that they are not responsible for imposing climate policies where governments have not done so”. The Times says that Bank of England has been accused of “falling short of its financial stability mandate” by refusing to disclose individual results or use capital penalties in its stress tests. It notes that, according to the bank, this work will be an “exploratory exercise” examining the impact of climate change and a net-zero by 2050 target, not a “full stress test” despite the pledge made by former governor Mark Carney in 2019.

An opinion piece in BusinessGreen by Lukasz Krebel of the New Economics Foundation thinktank is headlined: “The Bank of England needs to act on – not just stress-test – the risks posed by climate change.” In its coverage, Sky News looks in in more detail at the three different future scenarios being considered by the bank, which consider different levels of climate action and warming by 2050. Separately, a report by disaster relief charity Shelterbox covered by Sky News warns that the world could lose 8.4m homes a year between now and 2040 due to extreme weather, and the piece notes that government figures suggest 5m UK properties are at risk from floods from the river or sea.

Meanwhile, BusinessGreen reports that the UK Treasury has announced the formation of independent body to advise on the delivery of government’s planned “green taxonomy” to address concerns over alleged “greenwashing” within the financial industry. Another BusinessGreen story reports on a government announcement that it would prevent firms that lack “clear and credible carbon reduction plans” from bidding for major public sector contracts.

Developing nations need boost to clean energy funds, says IEA
Financial Times Read Article

The International Energy Agency (IEA) says clean energy investment in developing economies must increase seven-fold by the end of the decade for the world to stay on track to achieve net-zero emissions by 2050, according to the Financial Times. Despite being home to two-thirds of the world population and being set to represent 90% of future emissions growth, such nations only receive 20% of “green” funding, the piece notes. Bloomberg adds that developing and emerging markets have actually seen annual investments in energy fall around 20% since 2016 in developing and emerging markets. The news website states that ahead of the G7 summit taking place in the UK later this week, IEA executive director Fatih Birol urged leaders to commit to meeting the goal set by wealthier signatories of the Paris Agreement to mobilise $100bn a year in climate finance for developing countries.

Meanwhile, a piece in Reuters says that, according to industry executives and analysts interviewed by the newswire, global solar power developers are slowing down installations due to a surge in costs for components, labor and freight “as the world economy bounces back from the coronavirus pandemic”. It notes that the development suggests decelerating growth at a time when nations are trying to ramp up efforts to address climate change. In other news, EurActiv reports on new research carried out by consultancy Capital Economics which finds that the world’s largest oil and gas companies increased investment in clean energy by 34% last year, despite a 6% fall in energy demand caused by the pandemic. Another piece in Bloomberg states that even as oil “supermajors” such as Exxon and Chevron retreat from fossil fuels, demand will likely be sustained as national oil companies owned by governments expand to fill the gap they leave behind.

UK: Sale of halogen lightbulbs to be banned from September under climate plans
The Daily Mirror Read Article

Sales of halogen lightbulbs, “such as kitchen spotlights”, will be banned from September under UK government climate plans, the Daily Mirror reports. According to the newspaper, the government says that the move will cut 1.26m tonnes of carbon emissions annually and is “part of stricter energy efficiency rules which will help save consumers £75 a year”. It notes that the announcement comes after the UK began phasing out the sale of higher-energy halogen lightbulbs in 2018. The Daily Telegraph adds that halogen pins used in small fittings, such as wall lights and fluorescent strip lights of the kind seen in offices, will also be banned from sale from 2023, noting that the new legislation reflects changes being brought in by the EU. BusinessGreen states that these moves are intended to “cement ultra-efficient LED bulbs’ position as the default lighting choice across the UK”. As it stands, it adds that around two-thirds of bulbs sold across the nation are LED lights, which tend to last last five times longer than halogen lightbulbs and use up to 80% less power. According to BBC News, other measures being prepared by the government include the right to get goods repaired, new energy labels and higher efficiency standards for white goods, TVs and other appliances.

In other UK news, the Sun reports that “top wonks” told a government select committee about the risk of increasing gas costs to encourage a switch away from the fossil fuel. According to the newspaper, experts warned that the 21m households using gas “would be heavily penalised and demanded the Treasury cough up more incentive cash”.

Meanwhile, Sky News reports that the mayor of Copeland in Cumbria, which is the potential site for a controversial new coal mind in the UK, has said the plans should not fall victim to prime minister Boris Johnson’s ambitions to be a global leader on the climate. Finally, the Sun reports that Johnson will vow to make the West Country the UK’s first carbon neutral area ahead of the G7 summit in Cornwall.

US: Biden shifts infrastructure talks to new bipartisan Senate group
Reuters Read Article

US president Joe Biden has broken off talks on his infrastructure bill – which includes extensive climate action – with a key Republican, and instead reached out to a bipartisan group, Reuters reports. It notes that the move came after one-on-one talks with Shelley Capito were described as hitting a “brick wall”, with the senator offering just $330bn in new spending. The piece adds that this is far short of Biden’s $1.7tn offer, which itself is more than $1tn lower than his initial request. Politico reports that US national climate adviser Gina McCarthy said some ambitious proposals to address climate change could fall out of the infrastructure package. In other news, Bloomberg reports that McCarthy is set to meet chief executives of some of the largest US oil companies as the Biden administration “nears pivotal decisions on drilling and auto emissions”.

Meanwhile, Reuters reports that as part of its clean energy expansion plans, the Biden administration plans to explore the potential of offshore wind energy development in the Gulf of Mexico.

US urges China to move forward 2030 carbon dioxide emissions goal
Kyodo News Read Article

The US has urged China to bring forward its goal of peaking its carbon emissions before 2030, but Beijing has rejected the call, reports Kyodo News. Sources told the Japanese news agency that the request had been made by John Kerry, the US special presidential envoy for climate, during his meeting with his Chinese counterpart, Xie Zhenhua, in April in Shanghai, the outlet says. Bloomberg focuses on the Chinese state grid’s struggle to keep up with surging electricity demand in hot weather. The outlet calls this the “latest test” of China’s “carbon-neutrality” drive.

Separately, state-run Shanghai Securities News reports that various Chinese regions have released their road maps to the emission peak. Shanghai and Shenzhen plan to reach their maximum amount of carbon emissions by 2025, while Ningxia and most cities in Sichuan aim to hit the goal by 2029, the article says. Meanwhile, a report from S&P Global says that China’s major power producers face an “uphill battle” while aiming to peak their carbon emissions by 2025.

Elsewhere, official research has proposed that China’s industrial sectors should aim to achieve their emission peak “as a whole” by 2025, while electricity, transport and construction sectors should eye 2030 as the deadline. The assessment states that China can achieve its target to peak emissions before 2030 by arranging different industries and sectors to peak their emissions in a “tiered” manner. Officials, academics and industry leaders gathered in Beijing last Thursday to discuss the proposal, reports China Cement magazine.

Australia: Scott Morrison to focus on international trade, climate policy in speech ahead of G7 summit
ABC News Read Article

Ahead of a foreign policy speech given today by Scott Morrison, ABC News reports that the prime minister would “try to reframe Australia’s climate change policies” ahead of the G7 summit taking place in the UK this week. It adds that Morrison had no plans to make “any fresh commitments to lift Australia’s climate targets”. The Guardian notes that “amid increasing international focus on the climate crisis, Morrison appears to be digging in against deeper emission cuts and sector-specific targets as part of the pathway to net-zero emissions”.

Meanwhile, in New Zealand, the Guardian reports that the Climate Commission, an independent body set up to advise the government, has released a “sweeping document” outlining what the nation must do if it wants to meet its target of net-zero carbon emissions by 2050, and reducing biogenic methane emissions by 24%-47%. Speaking at the release of the report, prime minister Jacinda Ardern, said climate change was a matter of “life or death”, the newspaper reports.


We need a level playing field for UK manufacturers in the green revolution
Amber Rudd and Andrea Leadsom, The Times Read Article

Two former secretaries of state for energy and climate change, Amber Rudd and Andrea Leadsom, write for the Times about what they call “the extraordinary journey the UK has taken on climate policy over the last six years”. While they note that “huge leaps of progress have been made by successive Conservative prime ministers”, they add that “a big lesson that we’ve learnt is that the first phase of cutting emissions didn’t do enough to benefit UK companies and workers”. They say that more should be done to develop jobs in the UK, and to do this the current leadership should seek the agreement of the G7 to develop a common carbon border adjustment mechanism. “The government must go further to promote the development of full UK supply chains for low-carbon technologies like electric vehicles and offshore wind,” they add. The former ministers note that a carbon border adjustment would ensure that UK companies are not undercut by countries with lower ambitions on climate change. However, they say that international cooperation will be essential, and that the G7 is the ideal forum to achieve this. “Once the cost of carbon is properly accounted for, UK manufacturers will be able to compete on a level playing field with overseas competitors. We can start with offshore wind and then move into other industries. This is the kind of global leadership the UK should be showing, as we gear up for COP26 and look beyond it to the race to net-zero,” they conclude.

Meanwhile, an editorial in the Sun asks readers: “Does the prime minister think his ‘net-zero’ revolution will happen by magic?”. The piece says “it’s all very well Boris declaring, before the G7 summit, that Cornwall will be the first county to hit zero emissions”, but says that voters should be warned of the costs of this transition. “If you make them poorer, expect flak.,” it concludes.


Greenhouse gas emissions from food systems: building the evidence base
Environmental Research Letters Read Article

New research finds that one third of all human-produced greenhouse gas emissions come from food systems. Using data from “crop and livestock production, on-farm energy use, land use and land-use change, domestic food transport and food waste disposal”, the authors produce new estimates of emissions from food systems over 1990-2018 at the country level. The study finds that one quarter of emissions from food systems are produced during the conversion of natural ecosystems to agricultural land. It adds that per person food system emissions decreased over 1990-2018 from 2.9 to 2.2 tonnes of CO2 equivalent, and notes that per person emissions were about twice as high in developed countries as in developing nations in 2018. The authors add that the conventional categories used by the Intergovernmental Panel on Climate Change “systematically underestimate” the contribution of food to total human-produced emissions. The journal also carries a perspective under the headline: “Finding and fixing food system emissions: the double helix of science and policy.”

A first constraint on basal melt-water production of the Greenland ice sheet
Nature Communications Read Article

Annual melt rates at the base of the Greenland ice sheet – termed “basal melting” – increased by 2.9bn tonnes during the first decade of the 2000s, according to new research. This is the “the first estimate of ice-sheet-scale basal melt and its change through the first decade of the 2000s”, according to the paper. The authors determine basal melt using “estimates of geothermal flux, satellite-derived ice-surface velocities, surface and bed topographies, and outputs from an ice-sheet model and regional climate models”. The study finds that basal melt currently accounts for 2.1bn tonnes of ice loss from the Greenland ice sheet every year, adding that half of the melt is due to “basal friction”. The authors add that, as the Arctic warms, basal melt will continue to increase due to faster ice flow and increased surface melting.

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