This week: Shareholders' ESG Proposals; Made in America?; Record Renewables

Welcome back. Climate change updates can be terribly depressing and while the United Nations' latest Intergovernmental Panel on Climate Change report this week contained its most dire warning yet, it also struck a hopeful note.

First the warning: The impacts of climate change are more extreme than previously expected so we need to drastically pick up the pace of decarbonization to have any hope of not blowing past the target to keep global warming to 1.5 degrees Celsius. Breaching that target means we could hit some climatic system tipping points that will take millennia to reverse or in some cases be irreversible; for example, the loss of ice sheets and species extinction, respectively.

And now the hopeful note: We already have tools to drastically decarbonize by 2030. A lot are already cost competitive: Solar and wind power; methane reduction; some nuclear, fuel efficient vehicles; and efficient lights, appliances, equipment, ships and airplanes. Many others are available at a cost of under $50 per ton of carbon dioxide equivalent. (see chart below)

Changing what we do—so-called demand-side mitigation—also has great untapped potential. It includes things such as reducing food waste, telecommuting, using public transport or electric vehicles, making products that are more repairable or recyclable, improving buildings’ energy efficiency and adding urban green spaces.

Acting more quickly will reduce the long-term cost of the transition and bring other benefits too, including improved air quality, health and biodiversity. There is enough money to finance it, but it isn’t yet committed to the cause. The U.S. climate bill, Europe’s green deals and Chinese industrial policy have increased the pace of investments, but they aren't yet enough. 

Intriguingly another recent report, called The Breakthrough Effect, identified some possible pro-climate tipping points. The report, from Systemiq, University of Exeter and the Bezos Earth Fund, identified three sectors likely to create a self-reinforcing cascade of decarbonization tipping points: electric vehicles, green ammonia for fertilizer and plant-based proteins.

Increased electric-vehicle uptake would help foster learning effects, economies of scale and network effects in battery production, charging infrastructure, energy storage, renewable power and electric trucks. Developing green ammonia fertilizer could reduce the cost of green hydrogen, thereby helping to clean up steel making, shipping and aviation. Scaling up plant-based proteins could reduce deforestation. Compelling examples of how picking up the pace of the transition is possible.

The IPCC’s warning is undeniably grim but hopefully as the resilient people leading this corporate transition, you take this latest report as more of a rallying cry than a doom loop. 

Just what qualifies as made in America is one of the biggest questions still hanging over the Inflation Reduction Act, legislation passed in August that offers hundreds of billions of dollars in tax credits and other incentives for clean-energy projects, writes Phred Dvorak. The issue is more complicated than it might seem, given that almost all clean-energy projects require at least some parts that are manufactured overseas.

At the end of 2022, renewables accounted for 40% of the world's installed power capacity. Last year was a record year for renewable additions with 195 gigawatts of solar power added and 75 gigawatts of wind around the globe, according to the Renewable Capacity Statistics report from the International Renewable Energy Agency. 

EU proposes greenwashing rules aimed at forcing companies to back up environmental and sustainability claims they make over consumer products with scientific evidence. The rules could set a precedent for elsewhere.

Biden's first veto is a pushback that means retirement-plan managers will still be able to consider climate change in their investment decisions.

Chubb, a top-10 insurer in the worldwide oil-and-gas market, is tightening its requirements on insurance policies to demand producers reduce methane emissions, and will stop underwriting projects in protected areas.

The Fed may have seen raising rates as necessary to work toward price stability, but it didn’t help calm fears about financial stability.

Some bank executives and investors are reviving calls for changes to U.S. accounting rules around held-to-maturity securities in the wake of the collapse of Silicon Valley Bank.  

TMI? Companies are hoovering up more data than ever before, but are drowning in a sea of terabytes they don’t know how to make sense of.

Electric vehicles are taking General Motors’s cyber chief into new territory of monitoring power-grid security. 

A behind-the-scenes look at the negotiations of the latest IPCC report. (Bloomberg)

U.N. water conference kicks off aiming to create a Water Action Agenda including voluntary commitments. (Reuters)

Microbes might just be able to improve soil health and enhance its ability to store carbon. (Financial Times)

A free global climate simulator allowing users to explore the policy impact on a range of factors including energy prices, temperature and air quality. (Climate Interactive)

The Paris Olympics is aiming to keep cool without air conditioners. (AP)

The five battle lines in the $1.4 trillion farm bill. (The Hill)

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