Climate Compass Blog

America’s Pledge can drive and tally U.S. climate action

Today, Gov. Jerry Brown and Michael Bloomberg are launching America’s Pledge—an initiative to compile and quantify the actions of U.S. states, cities and businesses to drive down their greenhouse gas emissions consistent with the goals of the Paris Agreement.

America’s Pledge will for the first time aggregate and quantify the commitments of these “non-state actors,” demonstrating to the international community that U.S. climate resolve remains strong despite President Trump’s decision to withdraw from Paris.

The ambitious initiative also will provide a roadmap for increased ambition, outlining steps these groups can take to further reduce their emissions.

Since the president’s announcement, an unprecedented number of U.S. states, cities, and businesses have affirmed their support for the landmark climate deal, including through the “We Are Still In” declaration signed by more than 1,500 businesses, nearly 200 cities and counties, nine states, and over 300 universities. 

This enthusiasm for climate action is as yet unquantified, but it’s vast and varied and growing every day:

  • Just this week, California Gov. Jerry Brown and legislative leaders released a plan to extend through 2030 California’s cap-and-trade program. The program marshals market forces to motivate investment in low-carbon solutions, drive innovation, create jobs, and cut emissions cost-effectively.
  • Also this week, Colorado announced it will be the 14th state in the newly formed U.S. Climate Alliance, whose members together represent over a third of the U.S. population and GDP. The states are committed to the U.S. meeting its Paris target of reducing emissions 26 to 28 percent from 2005 levels by 2025.
  • More than 350 Climate Mayors have adopted the Paris Agreement goals for their cities. And more than 100 U.S. cities both large and small have pledged to transition their communities to 100% clean energy.
  • About two-thirds or more of mayors who responded to a recent survey by C2ES and The U.S. Conference of Mayors said they generate or buy renewable electricity to power city buildings or operations, buy green vehicles for municipal fleets, and have energy efficiency policies for municipal buildings. And they want to partner with the private sector do more.

Why transparency makes the Paris Agreement a good deal

Listening to some of the reasons President Trump cited for his decision to withdraw from the Paris Agreement – how it undermines national sovereignty while other countries do “nothing” – I found myself wishing someone had done a better job explaining to him how the agreement actually addresses his very concerns through increased transparency.

I saw this kind of transparency at work two weeks earlier, at the U.N. climate talks in Bonn, Germany, where countries, including the United States and India, took turns explaining to the international community the steps they’re taking to address climate change.

One of the Paris Agreement’s few binding commitments is for parties to report and be reviewed on their progress toward their climate targets. Under the two existing arrangements that will serve as a model for the new transparency rules being developed under the Paris Agreement, countries report every two years, providing information on emissions and on progress toward their climate goals. These reports are reviewed by a team of experts, and reporting countries undergo “peer review.” Other countries can pepper them with questions about their report, first in writing, then in a publicly broadcast session for all to hear.

In Bonn, 29 countries were up for peer review, including Mauritania, the first least developed country to go through the process. These countries publicly answered questions about the steps they are taking to reduce their greenhouse gas emissions and build resilience.

India served as a particularly rich example of the benefits of this “facilitative sharing of views,” as the process for developing countries is called. President Trump suggested that India would take action only upon receiving “billions and billions and billions” of foreign aid. But with the cost of solar power plummeting, India boasts an impressive array of ambitious solar and other renewable energy targets and policies aimed at reducing poverty and expanding access to electricity. Developed and developing countries alike were curious to know how India advanced renewable energy policy in such a short timeframe and how its federal government works with local governments and the private sector to reduce emissions and implement policy.

The United States presented at the “multilateral assessment” for developed countries. A crowded room, while eager to hear how the new administration’s policies would affect U.S. emissions, responded respectfully as the lead U.S. negotiator reiterated that current and future climate policies were under review – no other countries, as the president imagined in his Rose Garden speech, were laughing.

Task force recommends clear, consistent financial reporting of climate risks

It’s clear to many companies and investors that the physical impacts of climate change and the transition to a low-carbon economy pose financial risks if companies are not prepared. But financial reporting on those risks has not been always consistent or clear.

After 18 months of work, an industry-led task force has recommended ways companies across multiple sectors can inform their lenders, investors, insurance underwriters, and other stakeholders about climate risks—and opportunities—for their businesses. The framework is voluntary, but already more than 100 companies, including Bank of America, BHP Billiton, Dow Chemical Company, and Royal Dutch Shell, are supporting the recommendations.

The Financial Stability Board’s Task Force on Climate-related Financial Disclosures focused on corporate governance, strategy, risk management, and climate-related metrics and targets. The final recommendations provide guidance to companies on how to translate climate risks and opportunities into traditional financial terms, like revenues, expenditures, assets, and liabilities, and how to integrate climate risks into existing business continuity and enterprise risk management systems.

One of the most important recommendations is that more companies conduct a scenario analysis. Looking out over the horizon, companies should analyze what climate change will mean for their facilities, operations, supply and distribution chains, as well as demand for their products and services over a range of plausible scenarios. For example, how might sea-level rise and increased frequency and severity of heat, drought, and other extreme weather pose financial risks to the business over time? Or how will moving to a low-carbon energy economy present significant opportunities or challenges for the business? The task force recommendations are flexible because each company may use scenario analysis to develop an individual strategy to capitalize on opportunities and manage transition risks. The financial impacts of climate change will vary depending on the intensity of climate impacts (for physical risks) and on the timing and nature of policy and market changes (for transition risks). That’s why a scenario analysis to stress-test the resilience of a company’s business model and portfolio across a range of plausible scenarios is critical.

When it's too hot to fly

We’re used to blizzards disrupting winter travel plans, or hurricanes interrupting summer vacations, but what about travel delays due to excessive heat?

That’s what greeted many air travelers in the Southwest on the first day of summer. An oppressive heat wave across California, Arizona, and Nevada sent temperatures as high as 120 degrees. In Phoenix, American Airlines canceled dozens of flights because higher temperatures mean thinner air, which makes it more difficult for smaller planes to take off.

When scientists talk about trying to limit global average temperature rise to 2 degrees Celsius, non-scientists may hear, “It could be 2 degrees hotter.” But that’s not what climate change means. Rising average temperatures go hand in hand with longer, more intense, and more common extreme heat waves.

A recent report in the Proceedings of the National Academy of Sciences found that global warming has increased the severity and probability of the hottest day or month at more than 80 percent of places on Earth. Globally, 2017 has been the second-warmest year to date on record. The National Oceanic and Atmospheric Administration sees a greater than average chance of above-normal temperatures in most of the country in July.

Heat waves can cost dollars, like the financial impacts of lost work productivity and flight cancellations, not to mention increased cooling costs for homes and businesses.

Climate impacts can also cost lives. Hyperthermia, or prolonged high body temperature, is blamed for the deaths of an elderly man and woman in San Jose, California, which had a week of 103-degree temperatures. In New Mexico, extreme heat is believed to have played a role in the deaths of a father and son who were hiking at Carlsbad Caverns National Park. A 1995 heat wave in Chicago was blamed for hundreds of deaths, and thousands of deaths across Europe were attributed to a 2003 heat wave.

The risks of heat-related deaths don’t apply to everyone equally. The elderly and people with chronic medical conditions are more at risk. People with low incomes are less likely to have air-conditioning. People in urban areas with vast stretches of heat-absorbing concrete and asphalt also experience the heat island effect, which can increase evening temperatures as much as 22 degrees Fahrenheit above surrounding areas.

Good and bad options for changing California’s cap-and-trade program

California has been an environmental leader for decades, but still numerous cities in the state struggle with air quality. As state lawmakers debate the future of the cap-and-trade program to reduce greenhouse gas emissions, can they also find ways to reduce other air pollutants -- like ozone and particulate matter -- that make people sick?

The answer is yes. But some options are better than others.

Analysis of California’s climate policy shows that big cuts are needed to meet the state’s 2030 greenhouse gas reduction goal – and these cuts to carbon emissions will probably reduce other pollutants as well. By modifying the cap-and-trade program, California can improve the likelihood that criteria air pollutants get cut, too. Some of these options would reduce the flexibility businesses now have to comply with the program. This includes the ability to trade allowances, bank (save allowances for future years if you don’t need them now), and use offsets (verified reductions that happen at approved projects in California or elsewhere; the state sets strict rules on what counts as an offset).

The problem with eliminating these compliance options is that the program would lose elements that provide cost containment. In other words, it would likely get more expensive overall to achieve the same greenhouse gas reductions.

For example, eliminating the ability to bank allowances might backfire. Since the program is oversupplied right now (that is, there are more allowances available than emissions), banking is one of the main drivers of allowance demand and prices. If that option goes away, businesses will lose a big price signal to reduce greenhouse gas emissions, and emissions might increase in the near-term.

Another option is to add regulations on top of the cap-and-trade program. The state could regulate greenhouse gas emissions from refineries, which are also a large source of criteria air pollutants. The state could also enhance existing regulations for those other pollutants. It’s hard to predict how much pollution reduction either of these options would deliver compared to extending the cap-and-trade program as is, but they would at least increase certainty about criteria air pollution (though they might miss a big source of these emissions in the form of cars and trucks).