This article is part of a monthly series contributed by The ESG Group at Silver Leaf Partners, courtesy of Managing Partner, Michael J. Scanlon.
Carbon Currency and World Bank
As climate change has caught worldwide attention, the World Bank Group, business groups, and investors have called on governments and corporations to support carbon pricing to bring down emissions and drive profitable investments in a much cleaner, sustainable and low carbon industrial world.
A carbon price is a cost applied to carbon pollution to encourage polluting industries and organizations to reduce greenhouse gas emissions. There are two main types of carbon pricing: emissions trading system (ETS) and carbon taxes. An ETS – sometimes referred to as a cap-and-trade system gives companies a limited and falling number of emissions permits. Under ETS, industries with low emissions can sell their extra allowances to larger emitters. A carbon tax directly sets a price on carbon by imposing taxes on the carbon content of fossil fuels. Visit The World Bank’s Carbon Pricing Dashboard for more information.
Climate change is a “market failure” in basic Economic theory – a situation that results from the inefficient allocation of resources and leads to a net loss in social welfare – deadly pollution, global warming, negative health issues, etc. Carbon pricing is not only a more flexible and cost-efficient way to achieve a society’s overall environmental goal, but it also stimulates innovation in clean technology which will accelerate the transformation to a low-carbon economy.
The largest human source of carbon dioxide emissions is from the combustion of fossil fuels, most commonly coal, natural gas, and oil. The good news is, renewables are rapidly replacing fossil fuels. In 2015-16, renewables accounted for about 60% of all U.S. new installed capacity, and the International Energy Agency (IEA) forecasts a strong growth (43%) in renewables through 2022. Nevertheless, Banking on Climate Change: Fossil Fuel Finance Report Card 2018 will boggle your sensible mind. It was published in March 2018 by Rainforest Action Network, RAN, BankTrack, Indigenous Environmental Network, Sierra Club, Oil Change International and Honor the Earth. According to the report, “banks have a long way to go to align their businesses with climate stability.” The report graded 36 multinational banks based on their financing in 6 extreme fossil fuels sectors and the grades are dismal and not at all pleasant-looking. It also found that in spite of the urgent climate crisis, 2017 was a year of backsliding: banks increased extreme fossil fuel financing last year, led by a more than doubling in finance for tar sands companies and pipelines. Among Wall Street Banks, JPMorgan Chase had the highest risks and literally ‘toxic exposure’, with a total financing of US$ 26 Billion from 2015-2017 funneled to the top 30 companies in each of the extreme fossil fuel subsectors, in addition to 6 tar sands pipeline companies.
Alison Kirsch at Rainforest Action Network (RAN) said: “At a time when some European banks like BNP Paribas and ING are adopting policies that sharply restrict their lending to some of the worst fossil fuels, US and Canadian banks like JPMorgan Chase and TD are moving backwards in lockstep with their wrongheaded political leaders.” Financial institutions are often an overlooked player in climate change discussions, but play a critical role in the transition towards a zero-carbon future. RAN’s research on banks’ fossil fuel financing and ESG policies is a useful metric for assessing banks’ exposure and management of climate risk. You can download the report here and interact with the data.
Carbon is both: Footprint + Foodprint
A carbon footprint is defined as “the total greenhouse gas (GHG) emissions caused directly and indirectly by an individual, organization, event or product.” Food’s carbon footprint, or “foodprint,” is thus the greenhouse gas emitted by all steps of food production combined: from growing, rearing, farming, processing, transporting, storing, to cooking and disposing of the food we consume. Watch this video on the carbon footprint of one standard bacon lettuce tomato sandwich – for this one BLT sandwich to get to your plate, 800 grams of carbon dioxide are released. That is enough gas to fill 100 gallon jugs.
According to the “Carbon Footprint Factsheets” published by the Center for Sustainable Systems at University of Michigan in 2017, U.S. household food consumption emits 8.1 metric tons of CO2e each year, with 83% of emissions coming from the production of food. It may not come as a surprise that animal products or by-products have larger carbon footprints per calorie than grain or vegetable products because more processing is involved. However, you maybe be surprised by the fact that not all animal products/by-products are created equal – emissions from meat products and dairy products account for nearly two third of total greenhouse gases from food consumption (with meat products 47.6% and dairy products at 18.9%), whereas the percentage for poultry, fish, seafood, and eggs combined, is 13.9%.
You can now calculate your own carbon footprint with the free carbon calculators on Carbon Footprint Ltd, a UK-based environmental management company. Try figuring out what carbon “foodprint” you have on a regular basis. It will surprise you!
Silly, Addressing Climate Change is for Us, Not the Planet – Like it or not, Change Really Happens
The Climate Leadership Council’s annual dinner took place on March 1st. The conference brings together influential climate, energy, and sustainability professionals from around the globe to address climate change through policy, innovation, and business solutions. You, every American, and global citizen should be inspired by this short keynote introduction by one of this year’s introducing speakers, Ms. Gina McCarthy, former EPA Director. At one point in her humorous, yet serious and informed speech, she says, “We’re not addressing climate change because we’re worried about the planet; the planet’s gonna be just fine – we’re just not gonna live in it! That’s a significant clarification! …and that’s what we need to remind people of.”
The Climate Leadership Council (CLC), an international policy institute whose mission is to mobilize global leaders around effective and equitable climate solutions, has launched a new ad campaign promoting its proposed carbon tax. Despite backing from heavy-hitters such as PepsiCo, Johnson & Johnson, Procter and Gamble, Unilever, ExxonMobil, BP, and Royal Dutch Shell,the reception has been mixed. CLC’s ad points to the deployment of a “carbon dividends program” as a catalyst for drastically driving down greenhouse gas emissions — a notion that is supported by a recent study published by the organization, which revealed that the proposal could reduce emissions twice as fast as Obama-era policies. * Thank you for contributions and her help with this newsletter from Ms. Kaiyi Zhang Kidd – MA in Economics Candidate, 5/2018 Fordham University.
Thanks to our institutional investors for supporting our commitment to this low carbon, sustainable and resource responsible world.
The ESG Group at Silver Leaf Partners – Michael J. Scanlon
212-632-8429 ( office ) https://www.silverleafpartners.com/ ; Member / FINRA
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Securities are offered through Silver Leaf Partners, a member of FINRA, NFA and SIPC. This communication is for informational purposes only and considered privileged and confidential. Neither the information above nor any attachments are guaranteed as to their accuracy or completeness. If such information is related to a security or product, then you are further advised that we do not provide investment counsel, nor do we certify that this information is complete or accurate. To determine suitability, you must secure, read and understand all relevant information, conduct a thorough due diligence and seek expert independent counsel, if necessary, prior to investing. We further caution that past performance is not indicative of future results.
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Securities are offered through Silver Leaf Partners, a member of FINRA, NFA and SIPC. This communication is for informational purposes only and considered privileged and confidential. Neither the information above nor any attachments are guaranteed as to their accuracy or completeness. If such information is related to a security or product, then you are further advised that we do not provide investment counsel, nor do we certify that this information is complete or accurate. To determine suitability, you must secure, read and understand all relevant information, conduct a thorough due diligence and seek expert independent counsel, if necessary, prior to investing. We further caution that past performance is not indicative of future results.
This communication is confidential and may not be disclosed without permission. If you are not the intended recipient, then you have received it in error and you may not distribute or copy it. If you have received this transmission in error, please notify the sender by reply email and delete this message and all of its attachments. Every effort is made to keep our network virus free. However, we assume no liability for any damage caused by this transmission.
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Securities are offered through Silver Leaf Partners, a member of FINRA, NFA and SIPC. This communication is for informational purposes only and considered privileged and confidential. Neither the information above nor any attachments are guaranteed as to their accuracy or completeness. If such information is related to a security or product, then you are further advised that we do not provide investment counsel, nor do we certify that this information is complete or accurate. To determine suitability, you must secure, read and understand all relevant information, conduct a thorough due diligence and seek expert independent counsel, if necessary, prior to investing. We further caution that past performance is not indicative of future results.
This communication is confidential and may not be disclosed without permission. If you are not the intended recipient, then you have received it in error and you may not distribute or copy it. If you have received this transmission in error, please notify the sender by reply email and delete this message and all of its attachments. Every effort is made to keep our network virus free. However, we assume no liability for any damage caused by this transmission.
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