A new national climate report that shows temperatures rapidly rising, but it also has some good news for the U.S.
The Fifth National Climate Assessment, which analyzes the impacts of climate and global change in the U.S., shows that global warming is raising average temperatures in this country more quickly than it is across the rest of the planet. However, U.S. greenhouse gas emissions are down despite growth in the economy and population.
Annual U.S. greenhouse gas emissions fell 12% between 2005 and 2019, driven largely by changes in electricity generation – declines in coal use, and increases in the use of natural gas and renewable technologies, the report shows.
“Recent growth in the capacities of wind, solar, and battery storage technologies is supported by rapidly falling costs of zero- and low-carbon energy technologies, which can support even deeper emissions reductions,” the report states. “For example, wind and solar energy costs dropped 70% and 90%, respectively, over the last decade, while 80% of new generation capacity in 2020 came from renewable sources.”
Efforts to adapt to climate change and reduce greenhouse gas emissions are underway in every U.S. region and have expanded since 2018, including improved forest- or land-management strategies to both increase carbon storage and protect ecosystems, and expanding renewable energy options to reduce emissions while also improving resilience, the report shows.
“Despite an increase in adaptation actions across the country, current adaptation efforts and investments are insufficient to reduce today’s climate-related risks and keep pace with future changes in the climate,” the report states. “Accelerating current efforts and implementing new ones that involve more fundamental shifts in systems and practices can help address current risks and prepare for future impacts.”
Climate and Inflation
Climate change and different approaches to combat it are likely boost inflation and have other economic impacts that are relevant to central bank rate-setters, Bank of England policymaker Catherine Mann said this week.
“The research here points to increased inflation, increased inflation persistence, and increased inflation volatility associated with climate shocks, policies, and spillovers,” she said in the text of a speech published by the Bank of England.
Mann’s comments pertained to all nations.
Reuters reported that Mann was part of a minority of three Monetary Policy Committee members who voted this month for the BoE to raise its main interest rate to 5.5% from 5.25%.
According to Reuters, much of the BoE’s work on climate change has focused on the potential long-term impact on insurers and banks from risks posed from extreme weather and on regulatory change that may affect their investments.
However, Mann said climate change policies were increasingly likely to have an impact on inflation over a shorter horizon, with research pointing towards price shocks from changes in carbon pricing as having a more persistent effect on inflation than oil price shocks, Reuters reported.
Insurers and Oil
Insurers continue to provide coverage for increased oil and gas production even as they face large losses fueled by climate change, a new report shows.
A report from climate activist group Insure Our Future shows that 80% of the insurance market and 53% of the reinsurance market don’t have restriction policies for oil and gas. The industry is doing better on coal, where a wider adoption of restrictions has made it much harder to insure new projects, the nonprofit told Bloomberg for an article on Insurance Journal this week.
Losses fueled by climate change regularly exceed $100 billion a year, while premiums have increased and yields in the $40 billion market for catastrophe bonds have soared. Some insurers are fleeing Florida, California and other markets citing the growing risk of floods, fires and other natural disasters, Bloomberg reported.
“Insurance companies are now abandoning customers affected by climate risks, yet they continue to fuel the climate crisis by underwriting and investing in the expansion of fossil fuels,” Peter Bosshard, the campaign’s global coordinator, said in a statement.
Regulators are eyeing the situation.
Insurers will need to publish transition plans with quantifiable targets and processes for reaching net zero by 2050 under the European Union’s draft Solvency II rules. In the U.S., the Senate Budget committee launched an investigation into how the industry evaluates climate risks and has pressed insurers to disclose business interests tied to fossil fuels.
Climate change is anticipated to increase the challenges producers are already seeing in two key beer crops, hops and barley, while some hops and barley growers in the U.S. say they’ve already seen their crops impacted by extreme heat, drought and unpredictable growing seasons.
Researchers are working with growers to help counter the effects of more volatile weather systems with improved hop varieties that can withstand drought and by adding winter barley to the mix, according to an article from Oregon Public Broadcasting.
The OPB report also references a study out last month modeling the effect of climate change on hops in Nature Communications that projected that yields in Europe will fall between 4% to 18% by 2050.
Hops declines in Europe mean changes for American producers. One craft brewery that gets some of their hops from Goschie said that the company is trying to replicate the flavors of German hops using new varieties grown in the U.S. because the ones they depend upon from Europe have been impacted by hot, dry summers over the last couple of years, according to the article.
“If we don’t act, we’re just going to also lose things that we consider not to be, for example, sensitive or related to climate change. Like beer,” said Mirek Trnka, a professor at the Global Change Research Institute.
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