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Exposing the Financial Costs of Climate Change—and Denial of the Climate Crisis

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Monday, October 24, 2022

This piece was published originally by Capital & Main. Biting the Hand It hasn’t been the best season for the invisible hand, the 18th century principle that the market be left to its own devices free of government intervention.In August, President Biden took his right hand and applied his signature to the Inflation Reduction Act (IRA) — signaling that the government would be tipping scales in the economy toward renewable energy. While unanimous opposition from Republicans signaled their continuing lip service to that free market ideology, in truth they — along with some Democrats — have long manipulated the economics of energy by steering billions of dollars in public funds toward the fossil fuel industry. Fossil fuel companies have received at least $20 billion annually in federal and state government subsidies over the past 10 years alone, and as much as $6 trillion from governments worldwide. U.N. Secretary-General António Guterres declared in September that the industry was “feasting off subsidies” while our planet burns. So there’s an important frame to the story of the IRA that’s worth remembering: The $141 billion it allocates to support wind and solar industries represents what is likely the first time that subsidies and tax credits for renewable energy in the United States have exceeded subsidies to fossil fuel companies — and is just about two-thirds of what the petrochemical companies have received from the government over the past decade. The massive government support for oil and gas interests was largely missing from the reporting on the IRA, and is certainly worthy of greater media scrutiny moving forward. In the U.S. those subsidies come in the form of loan guarantees, tax breaks and discounted rates for drilling on public lands, and in some cases direct payments to explore for oil in difficult locales — all provided to the companies that are, collectively, most responsible for the massive and expensive climate disruptions being experienced on Earth. Identifying which fossil fuel companies receive those different forms of direct and indirect government aid would be a significant contribution to the public interest — particularly since the public funds the subsidies, and the public pays for the billions of dollars in damages to the economy from the companies’ greenhouse gas emissions. The climate economist Richard Heede has identified the primary contributors to global greenhouse gas emissions, and it is a very small group. Apportioning responsibility for climate costs to any one company is, of course, difficult given the range of emitters. But when Heede reviewed CO2 emissions data from 1854 to 2010, he discovered that just 90 global companies are responsible for two-thirds of the emissions now wreaking havoc in the atmosphere. Among the top 20 global emitters from 1854 to 2010 are five U.S. companies, including the top two, Chevron and ExxonMobil. We know their names and those of others, and the media can and should remind us of them with each new financial consequence — from the costs of fighting new diseases linked to increased heat to contending with the developmental impact on children of exposure to greenhouse gasses like nitrogen dioxide to rebuilding from extreme weather disasters, which the National Oceanic and Atmospheric Administration (NOAA) estimates to be at least $15 billion thus far this year alone, and could be as much as $128 billion annually by mid-century, according to the White House Office of Management and Budget. And that’s just one fraction of the damages which will, if current emission rates persist, only increase. NOAA recently issued a handy graph on the accelerating pace of “billion dollar” extreme climate disasters. And here are two sources on fossil fuel subsidies and the industries that bear significant responsibility for those costs: Oil Change International and the Environmental Integrity Project. This great piece in Nature gets as close as I’ve seen to an explanation for why the helping hands given to the petrochemical companies can be difficult to report. Fundamentally, it’s because they’re so deeply woven into obscure tax codes and provisions of the national budget. Challenges notwithstanding, there are many vital stories to be written on taxpayer-supported handouts to oil and gas entities.   The pressures of climate change are revealing how the myth of the so-called invisible hand has long concealed what is in fact a highly manipulated energy market. This became quite visible when, in the runup to the passage of the IRA, 15 states pulled back the curtain on just how much the “free market” deck is stacked. Politico detailed how West Virginia’s Republican state treasurer was about to place at least six major financial firms on a blacklist for state funds due to their attempts to, slowly but steadily, shift their investments away from fossil fuels. By the time Biden signed the IRA, in August, the state treasurers of at least five other states — Texas, Florida, Louisiana, Oklahoma and Florida — had also established, or announced their intention to establish, their own often overlapping blacklists of financial firms retreating from fossil fuel investments. Among the blacklisted companies are Wells Fargo, BlackRock, JP Morgan Chase, Morgan Stanley and Goldman Sachs. More Republican-led states are likely to follow. Most of the state funds in question are tied to employees’ pensions, which means the retirement funds of state employees will be even more directly exposed to accelerating climate risks — as the state treasurer of Oregon pointed out — than they already are. (At current emission rates those costs would likely cut global economic output by 10%-14% by 2050 — amounting to as much as $23 trillion — according to the global insurer SwissRe, which has its money on the line with such predictions.) The head of Ceres, an NGO that has been pushing climate disclosure rules for years, captures the “blatant lie” at the heart of the actions of West Virginia and the other states. Oklahoma’s Republican governor, Kevin Stitt, declared that the blacklist bill would put an end to what he called “energy discrimination.” Which is another way of saying that the state should go back to discriminating in favor of oil. That mix of tax breaks and subsidies to the fossil fuel industries has amounted to as much as $500 million annually in recent years, according to an Oklahoma Policy Institute newsletter. The question that would no doubt lead to an overflow of revealing stories in the 16 states where such initiatives are either complete or in motion, not to mention other fossil fuel-producing states, is this: In what ways has government favored oil and gas companies, and does that constitute “discrimination” against renewable energy companies? Answers to that question might be the final bite to the myth of the invisible hand that’s been grifting us for more than two centuries. Black Rock and a Hard Place Meanwhile, tensions are rising for the financiers, caught in a climate pincer: Those very same blacklisted companies, and many more, will soon be contending with a new set of reporting requirements from the Securities and Exchange Commission, set to take effect in January. The SEC’s proposed new guidelines will require that publicly traded companies report to shareholders the “material” risks they face from climate change. For financial firms like Goldman Sachs, Chase Manhattan, Bank of America and others that are on the evolving Republican blacklist, that will include the risks faced by the companies they loan money to or invest in. Climate change is hitting the bottom line, and the SEC wants those financial exposures no longer hidden. The SEC’s initiative came shortly after West Virginia’s treasurer withdrew $8 billion in state funds from an investment fund at BlackRock, the publicly traded financial giant, in response to the company’s CEO recommending that investors embrace a “net zero” strategy favoring low carbon emitters. I have no great sympathy for the financial community. But consider this: These corporations now face two converging and contradictory forces that foreshadow trouble ahead. On the one hand, they are under pressure from states controlling access to potentially multibillion dollar accounts not to pay attention to the mounting economic consequences of climate change. On the other hand, the SEC is telling them to pay attention to precisely those pressures in order to produce an accurate portrait of their financial prospects.  These colliding imperatives will compel some of the nation’s largest financial firms to decide between defying the SEC — which would subject them to potential sanctions for nondisclosure of financial risks — or defying the rules of nearly a quarter of the states, and losing potentially billions of dollars’ worth of public fund accounts. There will be great opportunities for high-impact media coverage as companies maneuver through those converging pressures and the vice tightens. What, if anything, does JP Morgan Chase do to regain its hold on millions of dollars it handled for West Virginia government pension funds, and the funds of other states withdrawing their assets on climate grounds? More such questions — and storylines — are coming down the pike as even the bland rating agencies discover the climate backlash. For example, how do businesses in Utah and Idaho respond to the declaration by those states’ financial officers that they will not be bound by the creditworthiness ratings of S&P Global due to the willingness of that company, one of the stalwarts of the U.S. credit business, to incorporate environmental and social factors in its ratings of companies’ financial health?  Follow the Money All of which raises another question as climate disruptions to the economic order accelerate: If shareholders will now be informed about the very real risks from climate disruptions to the U.S. and global economy, what about the rest of us? What, for example, are the consequences of the rising cost of peaches and cherries and other immovable tree crops as temperatures rise, chill hours (key to ripening) fall, and fruit quality and quantity decline? …the diminishing value of a condo on the coast of Florida after the devastation of a hurricane and the likelihood of more to come as sea levels rise? …the increased cost of crop insurance for farmers and the impact on food prices? …the costs to school districts forced to install air conditioning units in their classrooms? Climate change is causing the creation of divergent economies — those that recognize how profoundly it alters calculations of risk and economic fortune, and those that refuse to acknowledge those risks even as the costs rise. Blindness to financial risk would be a sure sign that a CEO has lost his or her business savvy. Abundant reporting opportunities lie in the split reality emerging between those who acknowledge the risks ahead and those who fail to see them.

This piece was published originally by Capital & Main. Biting the Hand It hasn’t been the best season for the invisible hand, the 18th century principle that the market be left to its own devices free of government intervention.In August, President Biden took his right hand and applied his signature to the Inflation Reduction Act (IRA) […]

This piece was published originally by Capital & Main.

Biting the Hand

It hasn’t been the best season for the invisible hand, the 18th century principle that the market be left to its own devices free of government intervention.In August, President Biden took his right hand and applied his signature to the Inflation Reduction Act (IRA) — signaling that the government would be tipping scales in the economy toward renewable energy. While unanimous opposition from Republicans signaled their continuing lip service to that free market ideology, in truth they — along with some Democrats — have long manipulated the economics of energy by steering billions of dollars in public funds toward the fossil fuel industry.

Fossil fuel companies have received at least $20 billion annually in federal and state government subsidies over the past 10 years alone, and as much as $6 trillion from governments worldwide. U.N. Secretary-General António Guterres declared in September that the industry was “feasting off subsidies” while our planet burns. So there’s an important frame to the story of the IRA that’s worth remembering: The $141 billion it allocates to support wind and solar industries represents what is likely the first time that subsidies and tax credits for renewable energy in the United States have exceeded subsidies to fossil fuel companies — and is just about two-thirds of what the petrochemical companies have received from the government over the past decade.

The massive government support for oil and gas interests was largely missing from the reporting on the IRA, and is certainly worthy of greater media scrutiny moving forward. In the U.S. those subsidies come in the form of loan guarantees, tax breaks and discounted rates for drilling on public lands, and in some cases direct payments to explore for oil in difficult locales — all provided to the companies that are, collectively, most responsible for the massive and expensive climate disruptions being experienced on Earth. Identifying which fossil fuel companies receive those different forms of direct and indirect government aid would be a significant contribution to the public interest — particularly since the public funds the subsidies, and the public pays for the billions of dollars in damages to the economy from the companies’ greenhouse gas emissions.

The climate economist Richard Heede has identified the primary contributors to global greenhouse gas emissions, and it is a very small group. Apportioning responsibility for climate costs to any one company is, of course, difficult given the range of emitters. But when Heede reviewed CO2 emissions data from 1854 to 2010, he discovered that just 90 global companies are responsible for two-thirds of the emissions now wreaking havoc in the atmosphere. Among the top 20 global emitters from 1854 to 2010 are five U.S. companies, including the top two, Chevron and ExxonMobil.

We know their names and those of others, and the media can and should remind us of them with each new financial consequence — from the costs of fighting new diseases linked to increased heat to contending with the developmental impact on children of exposure to greenhouse gasses like nitrogen dioxide to rebuilding from extreme weather disasters, which the National Oceanic and Atmospheric Administration (NOAA) estimates to be at least $15 billion thus far this year alone, and could be as much as $128 billion annually by mid-century, according to the White House Office of Management and Budget. And that’s just one fraction of the damages which will, if current emission rates persist, only increase. NOAA recently issued a handy graph on the accelerating pace of “billion dollar” extreme climate disasters. And here are two sources on fossil fuel subsidies and the industries that bear significant responsibility for those costs: Oil Change International and the Environmental Integrity Project.

This great piece in Nature gets as close as I’ve seen to an explanation for why the helping hands given to the petrochemical companies can be difficult to report. Fundamentally, it’s because they’re so deeply woven into obscure tax codes and provisions of the national budget. Challenges notwithstanding, there are many vital stories to be written on taxpayer-supported handouts to oil and gas entities.  

The pressures of climate change are revealing how the myth of the so-called invisible hand has long concealed what is in fact a highly manipulated energy market. This became quite visible when, in the runup to the passage of the IRA, 15 states pulled back the curtain on just how much the “free market” deck is stacked. Politico detailed how West Virginia’s Republican state treasurer was about to place at least six major financial firms on a blacklist for state funds due to their attempts to, slowly but steadily, shift their investments away from fossil fuels. By the time Biden signed the IRA, in August, the state treasurers of at least five other states — Texas, Florida, Louisiana, Oklahoma and Florida — had also established, or announced their intention to establish, their own often overlapping blacklists of financial firms retreating from fossil fuel investments.

Among the blacklisted companies are Wells Fargo, BlackRock, JP Morgan Chase, Morgan Stanley and Goldman Sachs. More Republican-led states are likely to follow. Most of the state funds in question are tied to employees’ pensions, which means the retirement funds of state employees will be even more directly exposed to accelerating climate risks — as the state treasurer of Oregon pointed out — than they already are. (At current emission rates those costs would likely cut global economic output by 10%-14% by 2050 — amounting to as much as $23 trillion — according to the global insurer SwissRe, which has its money on the line with such predictions.) The head of Ceres, an NGO that has been pushing climate disclosure rules for years, captures the “blatant lie” at the heart of the actions of West Virginia and the other states.

Oklahoma’s Republican governor, Kevin Stitt, declared that the blacklist bill would put an end to what he called “energy discrimination.” Which is another way of saying that the state should go back to discriminating in favor of oil. That mix of tax breaks and subsidies to the fossil fuel industries has amounted to as much as $500 million annually in recent years, according to an Oklahoma Policy Institute newsletter.

The question that would no doubt lead to an overflow of revealing stories in the 16 states where such initiatives are either complete or in motion, not to mention other fossil fuel-producing states, is this: In what ways has government favored oil and gas companies, and does that constitute “discrimination” against renewable energy companies?

Answers to that question might be the final bite to the myth of the invisible hand that’s been grifting us for more than two centuries.

Black Rock and a Hard Place

Meanwhile, tensions are rising for the financiers, caught in a climate pincer: Those very same blacklisted companies, and many more, will soon be contending with a new set of reporting requirements from the Securities and Exchange Commission, set to take effect in January. The SEC’s proposed new guidelines will require that publicly traded companies report to shareholders the “material” risks they face from climate change.

For financial firms like Goldman Sachs, Chase Manhattan, Bank of America and others that are on the evolving Republican blacklist, that will include the risks faced by the companies they loan money to or invest in. Climate change is hitting the bottom line, and the SEC wants those financial exposures no longer hidden.

The SEC’s initiative came shortly after West Virginia’s treasurer withdrew $8 billion in state funds from an investment fund at BlackRock, the publicly traded financial giant, in response to the company’s CEO recommending that investors embrace a “net zero” strategy favoring low carbon emitters.

I have no great sympathy for the financial community. But consider this: These corporations now face two converging and contradictory forces that foreshadow trouble ahead. On the one hand, they are under pressure from states controlling access to potentially multibillion dollar accounts not to pay attention to the mounting economic consequences of climate change. On the other hand, the SEC is telling them to pay attention to precisely those pressures in order to produce an accurate portrait of their financial prospects. 

These colliding imperatives will compel some of the nation’s largest financial firms to decide between defying the SEC — which would subject them to potential sanctions for nondisclosure of financial risks — or defying the rules of nearly a quarter of the states, and losing potentially billions of dollars’ worth of public fund accounts.

There will be great opportunities for high-impact media coverage as companies maneuver through those converging pressures and the vice tightens. What, if anything, does JP Morgan Chase do to regain its hold on millions of dollars it handled for West Virginia government pension funds, and the funds of other states withdrawing their assets on climate grounds?

More such questions — and storylines — are coming down the pike as even the bland rating agencies discover the climate backlash. For example, how do businesses in Utah and Idaho respond to the declaration by those states’ financial officers that they will not be bound by the creditworthiness ratings of S&P Global due to the willingness of that company, one of the stalwarts of the U.S. credit business, to incorporate environmental and social factors in its ratings of companies’ financial health? 

Follow the Money

All of which raises another question as climate disruptions to the economic order accelerate: If shareholders will now be informed about the very real risks from climate disruptions to the U.S. and global economy, what about the rest of us? What, for example, are the consequences of the rising cost of peaches and cherries and other immovable tree crops as temperatures rise, chill hours (key to ripening) fall, and fruit quality and quantity decline? …the diminishing value of a condo on the coast of Florida after the devastation of a hurricane and the likelihood of more to come as sea levels rise? …the increased cost of crop insurance for farmers and the impact on food prices? …the costs to school districts forced to install air conditioning units in their classrooms?

Climate change is causing the creation of divergent economies — those that recognize how profoundly it alters calculations of risk and economic fortune, and those that refuse to acknowledge those risks even as the costs rise. Blindness to financial risk would be a sure sign that a CEO has lost his or her business savvy. Abundant reporting opportunities lie in the split reality emerging between those who acknowledge the risks ahead and those who fail to see them.

Read the full story here.
Photos courtesy of

How This Popular Climate “Solution” Could Tank Our Progress

What could be worth giving up a tenth of your country? The Liberian government reportedly plans to do exactly that and sell control of its intact rainforests to the scion of one of the world’s biggest fossil fuel producers. A draft memorandum of understanding, leaked last month, between Liberia’s Ministry of Finance and Blue Carbon LLC—one of many companies started by a 38-year-old member of Dubai’s royal family, Ahmed Dalmook Al Maktoum—would commit the small African nation to hand over exclusive rights to one million hectares of forest lands. In exchange, Blue Carbon will transform that land into “environmental assets,” including carbon credits: essentially, sellable units of promised emissions reductions. Such credits are, in general, intended to offset actual pollution by businesses, individuals, or governments. They can be bought either as a voluntary means of reducing carbon footprints or as a way to comply with government climate goals and regulations.For oil-rich countries like the United Arab Emirates—the host of this year’s U.N. climate talks, COP28—“carbon offset” schemes like the one described above hold incredible promise; the UAE is banking heavily on offsets to meet its own climate goals and has emphasized their importance in the lead-up to COP28. It’s a compelling pitch: Any emissions polluters can’t curb themselves can be outsourced to someone else. That basic premise undergirds everything from frothy corporate net-zero pledges to the decision to make your flight “carbon neutral” at checkout—and (arguably) the world’s hopes of limiting global temperature rise to 1.5 degrees Celsius (2.7 degrees Fahrenheit). The only problem is that carbon offsets of all kinds are increasingly being outed as total bullshit.Over the last few years, a drumbeat of academic research and investigative reporting has painted a bleak picture of carbon offsets and the carbon markets through which they’re traded. Just this week, a team of journalists at CarbonBrief published an exhaustive explainer on offsets and the many damning studies poking holes in a practice that’s long been a darling of climate policy wonks. That includes a study now making its way through the peer review process, which estimates that only 12 percent of carbon-offset projects “constitute real emissions reductions.” There are well-documented cases, as well, of carbon credit developers engaging in human rights abuses and displacing Indigenous communities. An investigation published last week by The Guardian and the nonprofit watchdog Corporate Accountability found that 78 percent of the top 50 carbon-offset projects are “likely junk.” That seemingly endless flow of reports has started to make an impact. The European Union is poised to crack down on unprovable “carbon neutral” claims that are often backed up by offsets. Even Shell—which boasted in 2021 about having delivered the first-ever “carbon neutral” liquefied natural gas cargo—quietly abandoned a $100 million-per-year plan last month to build out a pipeline of carbon credits en route to reaching net-zero emissions by 2050. Stateside, the Commodities Futures Trading Association has recently signaled that it intends to crack down on carbon credit fraud. Lawsuits are beginning to ramp up. That increased scrutiny, though, has yet to spark a broader reckoning with what it means if carbon offsets can’t be counted on to meet climate goals: a far more drastic effort to reduce emissions in real time. “There’s nothing happening today that wasn’t happening five years ago. It’s just that there was no one paying attention to it,” said environmental economist Danny Cullenward, a senior fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy, whose research focuses on carbon offsets and storage. The problems with “offsets” (a term of art describing a wide suite of activities) are definitional and fall into a few categories. Most have to do with the integrity of emission-reductions claims. Carbon credits are meant to correspond to emissions that have been avoided—say, through preventing trees from being razed—reduced, or removed, typically either through technologies such as direct air capture, which draws atmospheric carbon in through fans to then be stored in pipelines or injected underground, or “natural” methods like planting trees. Not much is natural, though, about buying up and seeding vast swathes of land with crops meant to serve a single purpose. When it comes to credits generated from avoided emissions, there’s often little way of knowing whether a tract of forest, for instance, was ever actually in danger of being developed. Landowners can say they might bulldoze trees to sell off credits—even if they had no real plans to do so. Polluters who buy credits should be able to prove what’s known as “additionality”—the idea that their purchase made possible emissions reductions that wouldn’t have happened otherwise. But if the trees were never threatened, then the polluter who bought the credits hasn’t actually counteracted any of its own emissions. Third-party verifiers that judge the integrity of carbon credits have been rocked by scandals. Some two-thirds of credits on the voluntary carbon market were verified by the Verified Carbon Standard, which is administered by an NGO called Verra. A months-long investigation by The Guardian, the German outlet Die Zeit, and a nonprofit newsroom called SourceMaterial, published in January, revealed that at least 90 percent of VCS-approved credits generated in the rainforest—popular among major brands like Disney and Gucci—were worthless “phantom credits” that didn’t correspond to any reductions. (Verra has refuted the allegations.)Another major issue is who gets to claim carbon credits. If a wealthy country buys credits from a poorer one, does the country that financed those promised emissions reductions get to count them toward its climate goals? Or does the country where they were reduced? As of now, there are few protections against multiple parties staking a claim to the same credits. Even more legitimate-seeming credits generated from forestry practices are likely unable to guarantee the emissions savings promised. Where a metric ton of carbon dioxide emitted from a coal plant will stay in the atmosphere permanently, with effects felt decades down the line, a metric ton of carbon stored in trees or avoided by saving more of them can be wiped out at virtually any point. True correspondence would require that carbon to be stored permanently. That’s a difficult promise to make. Even project operators who can honestly claim to be protecting as much carbon as they say, that is—based on the size and ecological makeup of the areas in question—can’t guarantee that carbon will be stored indefinitely. California learned firsthand how that can go wrong. The state’s cap-and-trade system is premised on big polluters, including oil and gas drillers, buying up permits that correspond to emissions avoided through the protection of its vast forests. Those purchases allow a firm to make up the difference between emissions reductions in their own operations and a declining, state-mandated cap on how much they’re allowed to emit. Included in that system is a “buffer” stock of additional forest lands set aside by project developers as insurance should other credit-generating trees burn. That buffer was meant to provide 100 years of protection against wildfire risk for California forest offsets. But over the last 10 years, 95 percent of those reserves have gone up in flames, releasing between 5.7 million and 6.8 million metric tons of carbon since 2015. While the country’s largest property insurer has almost entirely stopped taking out new policies in California, citing wildfire risk, the state agency that oversees California’s carbon market still only requires forest offset project developers to set aside an additional 2 to 4 percent of trees as insurance against wildfire risk. As a Mendocino County property called Eddie Ranch burned in 2018, its owners filed paperwork with that agency—the California Air Resources Board—to be paid millions for credits generated from preserving trees that were actively burning. Months later, CARB approved the application, “basing its decision on the state of the ranch before the fire,” the Los Angeles Times reported.  “The entire market is structured around a fundamental falsehood: that a ton of carbon we get from burning fossil fuels is identical to a ton of carbon stored in forests. That is 100 percent false,” Cullenward told me. “If you store carbon for less time than it takes to stabilize temperatures, that storage does not have any climate benefit.”That’s one consequence, he explains, of seeing the world like an economist. On paper, carbon stored in trees and what’s emitted from a coal plant is all just carbon. Physical reality tells a different story. Companies relying on offset credits to meet net-zero goals typically only budget for cheap, low-quality projects likely to be worthless, or worse. High-quality offsets are exceedingly rare. More permanent carbon storage remains unproven at scale but is likely to be needed “at gigaton scale,” Cullenward says, just to stabilize temperatures. After decades of scandals, there have been attempts to put some safeguards around carbon markets. Article 6.4 of the Paris Agreement creates a new U.N.-backed carbon market open to governments and companies alike to trade credits. Standards for that are being developed by a supervisory body composed of members from each U.N. regional group, and key elements will need to be approved by the countries that convene at annual U.N. climate meetings.Article 6.2 is meant to govern bilateral carbon trading—agreements reached between countries, as opposed to a market where companies and governments can shop around for offsets or offer them up for sale as needed. As of now, that’s more of a Wild West, says Jonathan Crook, who tracks negotiations for the Brussels-based watchdog Carbon Market Watch. “Countries can more or less do what they want as long as they agree to it,” he said. “There are very few rules that need to be upheld in terms of integrity and additionality.” Among the fears held by Carbon Market Watch and other advocates is that those transactions will turn into a black box. If changes agreed to at last year’s COP stick, countries will be able to keep details about trades confidential. While technical experts at the U.N. will be tasked with reviewing them, they would be forbidden from divulging information to the public. A report published by Carbon Market Watch this week puts forward a set of criteria for judging so-called negative emissions, emphasizing the need to ensure carbon is stored permanently and that such tools are used as a complement to rather than substitute for mitigation. While bilateral trades can already happen, fully fleshed-out rules under 6.2 could stand to explode the market for such deals. As bad news about carbon offsets has multiplied, so too have troubling climate science and catastrophes fueled by rising temperatures. As pressure builds internationally, dramatic land grabs like the one Blue Carbon has pushed in Liberia could become more and more common. As of now, it’s all too likely that those could do more harm than good.

What could be worth giving up a tenth of your country? The Liberian government reportedly plans to do exactly that and sell control of its intact rainforests to the scion of one of the world’s biggest fossil fuel producers. A draft memorandum of understanding, leaked last month, between Liberia’s Ministry of Finance and Blue Carbon LLC—one of many companies started by a 38-year-old member of Dubai’s royal family, Ahmed Dalmook Al Maktoum—would commit the small African nation to hand over exclusive rights to one million hectares of forest lands. In exchange, Blue Carbon will transform that land into “environmental assets,” including carbon credits: essentially, sellable units of promised emissions reductions. Such credits are, in general, intended to offset actual pollution by businesses, individuals, or governments. They can be bought either as a voluntary means of reducing carbon footprints or as a way to comply with government climate goals and regulations.For oil-rich countries like the United Arab Emirates—the host of this year’s U.N. climate talks, COP28—“carbon offset” schemes like the one described above hold incredible promise; the UAE is banking heavily on offsets to meet its own climate goals and has emphasized their importance in the lead-up to COP28. It’s a compelling pitch: Any emissions polluters can’t curb themselves can be outsourced to someone else. That basic premise undergirds everything from frothy corporate net-zero pledges to the decision to make your flight “carbon neutral” at checkout—and (arguably) the world’s hopes of limiting global temperature rise to 1.5 degrees Celsius (2.7 degrees Fahrenheit). The only problem is that carbon offsets of all kinds are increasingly being outed as total bullshit.Over the last few years, a drumbeat of academic research and investigative reporting has painted a bleak picture of carbon offsets and the carbon markets through which they’re traded. Just this week, a team of journalists at CarbonBrief published an exhaustive explainer on offsets and the many damning studies poking holes in a practice that’s long been a darling of climate policy wonks. That includes a study now making its way through the peer review process, which estimates that only 12 percent of carbon-offset projects “constitute real emissions reductions.” There are well-documented cases, as well, of carbon credit developers engaging in human rights abuses and displacing Indigenous communities. An investigation published last week by The Guardian and the nonprofit watchdog Corporate Accountability found that 78 percent of the top 50 carbon-offset projects are “likely junk.” That seemingly endless flow of reports has started to make an impact. The European Union is poised to crack down on unprovable “carbon neutral” claims that are often backed up by offsets. Even Shell—which boasted in 2021 about having delivered the first-ever “carbon neutral” liquefied natural gas cargo—quietly abandoned a $100 million-per-year plan last month to build out a pipeline of carbon credits en route to reaching net-zero emissions by 2050. Stateside, the Commodities Futures Trading Association has recently signaled that it intends to crack down on carbon credit fraud. Lawsuits are beginning to ramp up. That increased scrutiny, though, has yet to spark a broader reckoning with what it means if carbon offsets can’t be counted on to meet climate goals: a far more drastic effort to reduce emissions in real time. “There’s nothing happening today that wasn’t happening five years ago. It’s just that there was no one paying attention to it,” said environmental economist Danny Cullenward, a senior fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy, whose research focuses on carbon offsets and storage. The problems with “offsets” (a term of art describing a wide suite of activities) are definitional and fall into a few categories. Most have to do with the integrity of emission-reductions claims. Carbon credits are meant to correspond to emissions that have been avoided—say, through preventing trees from being razed—reduced, or removed, typically either through technologies such as direct air capture, which draws atmospheric carbon in through fans to then be stored in pipelines or injected underground, or “natural” methods like planting trees. Not much is natural, though, about buying up and seeding vast swathes of land with crops meant to serve a single purpose. When it comes to credits generated from avoided emissions, there’s often little way of knowing whether a tract of forest, for instance, was ever actually in danger of being developed. Landowners can say they might bulldoze trees to sell off credits—even if they had no real plans to do so. Polluters who buy credits should be able to prove what’s known as “additionality”—the idea that their purchase made possible emissions reductions that wouldn’t have happened otherwise. But if the trees were never threatened, then the polluter who bought the credits hasn’t actually counteracted any of its own emissions. Third-party verifiers that judge the integrity of carbon credits have been rocked by scandals. Some two-thirds of credits on the voluntary carbon market were verified by the Verified Carbon Standard, which is administered by an NGO called Verra. A months-long investigation by The Guardian, the German outlet Die Zeit, and a nonprofit newsroom called SourceMaterial, published in January, revealed that at least 90 percent of VCS-approved credits generated in the rainforest—popular among major brands like Disney and Gucci—were worthless “phantom credits” that didn’t correspond to any reductions. (Verra has refuted the allegations.)Another major issue is who gets to claim carbon credits. If a wealthy country buys credits from a poorer one, does the country that financed those promised emissions reductions get to count them toward its climate goals? Or does the country where they were reduced? As of now, there are few protections against multiple parties staking a claim to the same credits. Even more legitimate-seeming credits generated from forestry practices are likely unable to guarantee the emissions savings promised. Where a metric ton of carbon dioxide emitted from a coal plant will stay in the atmosphere permanently, with effects felt decades down the line, a metric ton of carbon stored in trees or avoided by saving more of them can be wiped out at virtually any point. True correspondence would require that carbon to be stored permanently. That’s a difficult promise to make. Even project operators who can honestly claim to be protecting as much carbon as they say, that is—based on the size and ecological makeup of the areas in question—can’t guarantee that carbon will be stored indefinitely. California learned firsthand how that can go wrong. The state’s cap-and-trade system is premised on big polluters, including oil and gas drillers, buying up permits that correspond to emissions avoided through the protection of its vast forests. Those purchases allow a firm to make up the difference between emissions reductions in their own operations and a declining, state-mandated cap on how much they’re allowed to emit. Included in that system is a “buffer” stock of additional forest lands set aside by project developers as insurance should other credit-generating trees burn. That buffer was meant to provide 100 years of protection against wildfire risk for California forest offsets. But over the last 10 years, 95 percent of those reserves have gone up in flames, releasing between 5.7 million and 6.8 million metric tons of carbon since 2015. While the country’s largest property insurer has almost entirely stopped taking out new policies in California, citing wildfire risk, the state agency that oversees California’s carbon market still only requires forest offset project developers to set aside an additional 2 to 4 percent of trees as insurance against wildfire risk. As a Mendocino County property called Eddie Ranch burned in 2018, its owners filed paperwork with that agency—the California Air Resources Board—to be paid millions for credits generated from preserving trees that were actively burning. Months later, CARB approved the application, “basing its decision on the state of the ranch before the fire,” the Los Angeles Times reported.  “The entire market is structured around a fundamental falsehood: that a ton of carbon we get from burning fossil fuels is identical to a ton of carbon stored in forests. That is 100 percent false,” Cullenward told me. “If you store carbon for less time than it takes to stabilize temperatures, that storage does not have any climate benefit.”That’s one consequence, he explains, of seeing the world like an economist. On paper, carbon stored in trees and what’s emitted from a coal plant is all just carbon. Physical reality tells a different story. Companies relying on offset credits to meet net-zero goals typically only budget for cheap, low-quality projects likely to be worthless, or worse. High-quality offsets are exceedingly rare. More permanent carbon storage remains unproven at scale but is likely to be needed “at gigaton scale,” Cullenward says, just to stabilize temperatures. After decades of scandals, there have been attempts to put some safeguards around carbon markets. Article 6.4 of the Paris Agreement creates a new U.N.-backed carbon market open to governments and companies alike to trade credits. Standards for that are being developed by a supervisory body composed of members from each U.N. regional group, and key elements will need to be approved by the countries that convene at annual U.N. climate meetings.Article 6.2 is meant to govern bilateral carbon trading—agreements reached between countries, as opposed to a market where companies and governments can shop around for offsets or offer them up for sale as needed. As of now, that’s more of a Wild West, says Jonathan Crook, who tracks negotiations for the Brussels-based watchdog Carbon Market Watch. “Countries can more or less do what they want as long as they agree to it,” he said. “There are very few rules that need to be upheld in terms of integrity and additionality.” Among the fears held by Carbon Market Watch and other advocates is that those transactions will turn into a black box. If changes agreed to at last year’s COP stick, countries will be able to keep details about trades confidential. While technical experts at the U.N. will be tasked with reviewing them, they would be forbidden from divulging information to the public. A report published by Carbon Market Watch this week puts forward a set of criteria for judging so-called negative emissions, emphasizing the need to ensure carbon is stored permanently and that such tools are used as a complement to rather than substitute for mitigation. While bilateral trades can already happen, fully fleshed-out rules under 6.2 could stand to explode the market for such deals. As bad news about carbon offsets has multiplied, so too have troubling climate science and catastrophes fueled by rising temperatures. As pressure builds internationally, dramatic land grabs like the one Blue Carbon has pushed in Liberia could become more and more common. As of now, it’s all too likely that those could do more harm than good.

Excessive Heat and Bad Coaching Are Killing Young Football Players

This story was originally published by the Guardian and is reproduced here as part of the Climate Desk collaboration. At the end of a preseason football practice in late July, Myzelle Law, a 19-year-old defensive lineman for MidAmerica Nazarene University in Kansas, returned to the locker room, and began showing signs of seizure. It was hot outside, but Law’s internal […]

This story was originally published by the Guardian and is reproduced here as part of the Climate Desk collaboration. At the end of a preseason football practice in late July, Myzelle Law, a 19-year-old defensive lineman for MidAmerica Nazarene University in Kansas, returned to the locker room, and began showing signs of seizure. It was hot outside, but Law’s internal body temperature had reached 108F, his family said. He died about a week later, of heat-related illness. Last summer, the same thing happened to the 17-year-old lineman Phillip Laster Jr, a rising senior at Brandon high school in Mississippi. In 2021, 16-year-old Drake Geiger, a player for Omaha South high school in Nebraska, died after collapsing on a practice field. They aren’t the only ones. Between 2018 and 2022, at least 11 football players in the US—at the student and professional level—have died of heat stroke. And the number of young athletes diagnosed with exertional heat illness has been increasing over the past decade or so, as unprecedented, extreme heat butts up against football season. The exertional heat illness rate in high school football was 11.4 times that of all other sports combined. This summer, the hottest on record in North America, teams across the US have been forced to reckon with a changing climate. High school and college teams in searing south-west states—where temperatures rarely dropped below 110F (43.3C) this summer – escaped to practice in the mountains, or by the coast. Teams took to practicing at dawn, before temperatures became unsafe. Friday night games were held later in the evening, or pushed to the next morning. And under the searing late summer sun, athletes and coaches are increasingly questioning the sport’s macho, push-past-the-pain mentality. Coaches acquired wet-bulb thermometers, which account for humidity as well as air temperature, to better measure heat stress, as well as cold immersion tubs to treat heat stroke. “We’re having these heatwaves that are lasting longer. They are more severe than ever before. And they’re touching geographic regions that formerly didn’t experience them,” said Jessica Murfree, a sports ecologist at the University of Cincinnati. “The opportunity to play sports like football is diminishing as a result.” For Max Clark, a sophomore quarterback for the College of Idaho, the start of each football season in August has felt a bit hotter than the last. “As each year goes by, it feels like more and more of our season is consumed with unbearable or uncomfortable heat,” he said. Practices were especially grueling last year, when Clark was a quarterback for the Arizona State Sun Devils. Practices began at 6am, so the team could wrap up before the hottest part of the day. And home games were held after sunset. “People don’t even want to sit in the stands and watch when it’s 103F,” he said. Transferring to the College of Idaho wasn’t much of an escape—Boise was trapped under a heat dome for much of July. To stave off heat illness, Clark closely monitors his nutrition throughout the day, and makes sure to stay hydrated when he’s on and off the field. “It’s about preparing for the heat, because you can’t really escape it.” he said. Players around the world, across all sports of all levels are grappling with similar realizations. The World Cup-winning midfielder Sam Mewis has written about how her performance has been impacted by extreme heat and wildfire smoke. This year, the US Open amended rules to partially shut the stadium roof in order to shade players during a searing heatwave on the east coast. But American football players are among the most vulnerable to heat illness. A 2013 study found that the exertional heat illness rate in high school football was 11.4 times that of all other sports combined. The season’s start coincides not only with the hottest period in much of North America, but also with hurricane season in the south and peak wildfire season in the west. In Idaho, many players and fans have begun to associate smoky skies with football, Clark said. And unlike cross country runners, or soccer players, footballers wear heavy padding and safety gear, which makes it harder for them to cool off. “The environment in which today’s athletes are playing sports, is wholly different from the environment when their coaches were playing.” The artificial grass that students and professionals play on causes even more complications. Studies suggest that synthetic turf can get up to 60F hotter than natural grass, radiating temperatures above 160F on summer days. Most heat illness happens right at the beginning of the season, or pre-season—when players are first returning to the field after long, off-season rests. It can take two or more weeks for their bodies to adjust to grueling outdoor workouts. Certain medications, including common ones used to treat depression and ADHD, can make players especially prone to heat illness. Linemen—the biggest, bulkiest players on the team—are extra vulnerable. “They don’t cool off as well as players with a leaner body might,” said Karissa Niehoff, CEO of the National Federation of State High School Association. “The majority of our heat illnesses in football were in the lineman position.” Nearly a dozen football players died of heat stroke between 2018 and 2022, according to the National Center for Catastrophic Sport Injury Research at the University of North Carolina at Chapel Hill. But the figure may be an underestimate as not all football deaths are reported to the center, or clearly linked to heat in autopsies. The risks are compounded for young athletes of color, who are more likely to go to schools and live in “heat island” neighborhoods that lack shade and green spaces. “Imagine, if you live in a place that doesn’t have air conditioning, you don’t have sufficient shade to keep you cool on your walk to school, and then your school doesn’t have air conditioning either,” said Ruth Engel, an environmental data scientist at UCLA who studies microclimates. “By the time you have to go play football, you’ve never had a chance to cool down—so you start at a huge disadvantage.” The year that the University of Maryland offensive lineman Jordan McNair died—2018—ended up being the fourth hottest year on record globally. The team had just returned from a month-long break to start their first workout of the season. It was a balmy day—just over 80F, with 70 percent humidity, and all the players were running 110-yard sprints. By his seventh sprint, McNair started cramping up, but kept running. About an hour later, he began foaming at the mouth and about thirty minutes after that, he was loaded into an ambulance. The 19-year-old died two weeks later. “Really the main thing I kept asking myself was why?” said his father, Marty McNair. “What did I miss? What did I miss?” A 74-page independent investigation commissioned by the university placed significant blame on the university trainers and medical staff, who failed to check the wet-bulb temperature and modify workouts to reduce the risk of heat illness. Instead, the trainers pushed McNair to keep running even after he showed signs of heat stress and failed to offer life-saving cold-immersion therapy before it was too late. The university eventually agreed to pay a $3.5 million settlement to Jordan’s family, and in the years since, has adopted new policies to better recognize and prevent heat stroke. And Marty McNair started a foundation named for his son, to train coaches and athletes on heat safety. Since then, after a slew of scorching football seasons, he’s started to hear more discussion and action on heat safety, he said. “Obviously global warming is real, and that’s going to be impacting athlete’s safety. And I think now people are starting to be more receptive to that idea.” In 2021, the state adopted a law named for McNair that required the creation of new health and safety requirements in Maryland athletic programs. Lawmakers have introduced a federal version as well. Still, Marty McNair sees massive disparities in the expertise and equipment that schools have to help athletes experiencing a heat stroke. “Your Black, your brown, your rural community teams, you don’t see them checking a wet-bulb globe thermometer—because they’ve barely got the basics,” he said. But as the climate changes, he believes the culture of football will have to change as well. “I always told Jordan to be coachable. So I never taught him that if you feel uncomfortable doing something that the coach asked you to do, you don’t have to do it. You know, listen to your body first.” Zac Taylor can barely remember how his body felt, before he collapsed on the gridiron in 2018. It was hot, and his high school varsity team had been made to do about 280 “up-down” push-ups after two hours of sprints and drills as a punishment for poor performance at a scrimmage. Taylor just remembers waking up at the hospital a week later. He lost more than 50lbs by the time he was discharged, his mother Maggie Taylor recalled. She has since started a non-profit, along with other parents, that donates safety and medical equipment to school teams and teaches young athletes how to look for signs of heat exhaustion. Part of that work includes teaching players to slow down, and coaches to ease off. The idea runs counter to football culture in many ways. (“Water is for cowards,” Denzel Washington’s Coach Boone proclaims in Remember the Titans.) Players are incentivized to strain themselves beyond their limits by coaches who themselves were mentored with the same sort of tough love. “There’s this culture of ‘keep pushing’, of punishment practices and if you stop, you’ll lose your position on the team,” said Maggie Taylor. “That’s how a lot of these old school football coaches operate.” Part of the problem, says Murfree, the sports ecologist, “is the environment in which today’s athletes are playing sports, is wholly different from the environment when their coaches were playing. Year after year we’re outpacing heat records and catastrophic disaster records.” Although very young athletes—at the elementary and middle school level—are physically most prone to heat illness, it’s the teens and young adults who are most at risk for exertional heat stroke, studies have found, simply because they push past their bodies’ warning signs. “With these young adults, all they want to do is make the varsity team, to come off the bench, to get recruited by the best college teams,” said Murfree. “They want to make their coaches and parents proud. And all that can be counterproductive if the body is being overworked.” There’s an idea that young athletes are superhuman, or act like they are, McNair said. “Jordan was 6ft 5, he was 300lbs. He wore a size 16 shoe—but he was still 19 years old,” he said. “These are still kids.”

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