FSB flags climate risk, Buffett gives a prime example, US gears up for Super Tuesday and island states lead Paris ratification push
Warren Buffett warned shareholders in Berkshire Hathaway utilities’ value could be eroded by wind and solar power (Flickr/Fortune Live Media/Stuart Isett)
By Megan Darby
Tackling climate-related risks is a top priority for the Financial Stability Board in 2016, chair Mark Carney has told G20 finance ministers.
In a letter released on Saturday, Carney set out how the Basel-based regulator plans to address “new and emerging vulnerabilities” in the financial system. Climate change was one of five issues listed.
A crack team headed by Michael Bloomberg to shine a light on secret polluters will publish its objectives in April and make recommendations by the end of the year, he said.
Buffetted by the winds of change
Another missive, penned by billionaire Warren Buffett to shareholders in his conglomerate Berkshire Hathaway, illustrated what that vulnerability looks like.
Wind and solar power are chipping away at the value of traditional utilities like the three Berkshire Hathaway owns, he acknowledged.
“Today, society has decided that federally-subsidized wind and solar generation is in our country’s long-term interest. Federal tax credits are used to implement this policy, support that makes renewables price-competitive in certain geographies. Those tax credits, or other government-mandated help for renewables, may eventually erode the economics of the incumbent utility, particularly if it is a high-cost operator,” Buffett wrote.
As governments worldwide seek to deliver on last year’s Paris climate deal, businesses – and investors – that aren’t part of the solution could be in for a shock.
Super Tuesday
In the US, all eyes are on presidential primaries. It’s Super Tuesday this week, when 12 states chose which candidate they want to run for the Republicans and Democrats.
The latest polls put Donald Trump and Hillary Clinton ahead, making them well placed to secure the nominations – although Tuesday’s caucuses won’t necessarily be decisive.
As the Democrats have been keen to highlight, all three Republican frontrunners reject the scientific consensus on climate change. In contrast, Bernie Sanders’ attacks on the fossil fuel lobby have pushed Clinton into more climate hawkish territory.
Perhaps most intriguing from a climate perspective is the prospect of Bloomberg entering the race. Yes, he of the climate risk task force. The former New York mayor has hinted he might run as a centrist independent if the two parties chose extremist candidates. A Bloomberg bid could force the GOP to engage more seriously with the issue.
From Paris to Brussels and London
Across the pond, EU environment ministers meet on Friday to consider the bloc’s post-Paris climate ambitions. Most member states have shown little appetite for upping their efforts in the short term, but the likes of Sweden may push for a stronger response to the UN deal.
The UK government’s independent advisers recommended no change to its carbon budget next decade, despite the tougher global goal agreed in Paris. On Tuesday morning, lawmakers in Westminster will grill industry experts on the topic. Those giving evidence include EnergyUK, a lobby group which has had a Damascene conversion to clean power, the Carbon Brief blog revealed last week.
And on Friday, London mayoral candidates will be flaunting their climate credentials at the Greener London Hustings.
Instant ratification
Fiji was the first to formally back the UN climate pact agreed in Paris, but other island states are following fast. Vulnerable to rising sea levels, they hope to sustain momentum from December’s historic deal.
Palau ratified last week, with presidents of the Marshall Islands and Micronesia also promising swift rubber-stamping. If all 14 Pacific island states sign it off, that gets a quarter of the 55 countries needed to bring the deal into force. (Although it won’t go very far to the 55% of global emissions that must be covered.)
In the Indian Ocean, the Seychelles cabinet has approved ratification and sent the matter to parliament.
Doom-mongers need not apply
World leaders have been invited to a signing ceremony in New York on 22 April and the UN is looking for a civil society speaker to inspire them.
The successful candidate should be from the developing world, but no sob stories, please. They want someone to “share a compelling story of a new innovation or solution” that is cutting emissions or protecting people from climate damage. Apply by 16 March.