Eye-popping graph from sifted.eu... All VC investment in climate fintech through the end of 2020 totalled $.41 billion. From 1/21-6/22 VCs...

While the current global COVID19 pandemic has not been linked to climate change, climate is expected to directly the spread of pathogens and disease. Exact impacts are hard to predict, but seasonality (flu), wildlife habits (for vector-borne diseases like malaria), and unstudied effects on human-to-human contagions are all possible results.

One simple idea today from Amy Harder: climate risk isn’t a black swan, it’s a gray rhino, and so is Coronavirus. “There have been plenty of warnings for those who were paying attention.” We have a chance against gray rhino risks, because there’s always time to prepare.

Kids These Days author Malcolm Harris attended an October, 2019 workshop with Royal Dutch Shell’s Shell Scenarios team. His in-depth essay explores the strategic and economic calculations factoring into Shell’s oil and gas and renewable alternatives development decisions and future planning.

Flood plain housing comes with greater climate risk, but markets aren’t pricing that risk effectively. New research shows how much buyers overpaid for these homes relative to their risk-adjusted value. This market failure exposes owners, banks, and insurance companies to higher climate-related losses. Built up wetlands also do a worse job naturally removing carbon from the air.

“Warming potential” – putting the estimated climate impact of portfolios into degrees of warming – could be a meaningful way for financial institutions to measure and track climate risk. In May 2019 Mirova research used lifecycle data, estimates of induced and avoided emissions, and the IEA climate scenarios to create a very clear temperature marker for portfolios. Major indexes (S&P 500 and MSCI World equity index) had warming potential around 5.0°C. Knowing that insurer Axa, at 3.3°C and 2.9°C, used the measure to commit to reaching a 1.5°C Paris Accord target (albeit, by 2050) demonstrates its value.

To understand shifts in the climate economy, You Need to Read up on BlackRock CEO Larry Fink. I have a podcast and a quick article to help: New York Times’ The Daily podcast Can Corporations Stop Climate Change? by Michael Barbaro and Andrew Ross Sorkin (transcript here), and Bloomberg Green’s Elizabeth Warren Urges BlackRock’s Fink to Back Disclosure of Climate Risk by Saijel Kishan.

This team of authors has a new study out in Nature estimating that cutting subsidies would spare between 500 million to 2 billion tons of CO2 per year by 2030 – roughly 1/4 of all Paris Agreement promises. The specific effects of some subsidies, such as biasing the oil industry to drill new wells with little upfront cost tend to lock in and speed emissions. Without subsidies, much of the oil produced is not even economical. Public tax money spent on subsidies literally accelerates the rate of climate damage.

A report by JP Morgan economists David Mackie and Jessica Murray and dated January 14, 2020 takes an unequivocal and damning position on the threat fossil fuel development poses to the world and to the economy, stating that policy must change. JP Morgan is a major financier for such development, and in the report “the investment bank says climate change ‘reflects a global market failure.’”

Utilities continue to invest in new gas power plants and other infrastructure even though the writing is on the wall that they are likely to become un-economical before they’ve served out their useful life, therefore generating extra financial burden on utilities that would likely be passed along to consumers. Investors should be concerned. There’s a significant risk that gas plants will go the way of coal plants, but only 18% of utility professionals surveyed listed this as a “top concern.”