Water is never far from the news these days. This summer, northern India experienced one of its heaviest monsoon seasons in 80 years, leaving more than 800 people dead and forcing another 100,000 from their homes. Meanwhile, Central Europe faced its worst flooding in decades after heavy rains swelled major rivers like the Elbe and the Danube. In the United States, nearly half the country continues to suffer from drought, while heavy rainfall has broken records in the Northeast, devastated crops in the South, and now is inundating Colorado.
Businesses are starting to wake up to the mounting risks that water – whether in overabundance or scarcity – can pose to their operations and bottom line. At the World Economic Forum in Davos this year, experts named water risk as one of the top four risks facing business in the twenty-first century. Similarly, 53% of companies surveyed by the Carbon Disclosure Project reported that water risks are already taking a toll, owing to property damage, higher prices, poor water quality, business interruptions, and supply-chain disruptions.
The costs are mounting. Deutsche Bank Securities estimates that the recent US drought, which affected nearly two-thirds of the country’s lower 48 states, will reduce GDP growth by approximately one percentage point. Climate change, population growth, and other factors are driving up the risks. Twenty percent of global GDP already is produced in water-scarce areas. According to the International Food Policy Research Institute (IFPRI), in the absence of more sustainable water management, the share could rise to 45% by 2050, placing a significant portion of global economic output at risk.
The U.S. Environmental Protection Agency (EPA) today announced proposed emissions standards for new power plants. According to the EPA, electricity generation represents one-third of U.S. greenhouse gas emissions. These rules are one of the important steps the EPA can take to reach the U.S. goal of reducing greenhouse gas emission by 17 percent below 2005 levels by 2020.
Editor’s Note: Experts are available in Michigan and Washington, D.C. to discuss this analysis
New analysis of Michigan’s power sector shows that the state can meet – and possibly even exceed – national carbon pollution standards that will be established by the U.S. Environmental Protection Agency (EPA). EPA is expected to announce emissions standards for new power plants later this month and additional standards for existing power plants in 2014.
“The time to act is now… We cannot afford to do nothing.”
This was the message of Mayor Will Sessoms from Virginia Beach, VA, delivered last Friday at a conference on "Adaptive Planning for Flooding and Coastal Change." Like so many cities along the Atlantic coast, Virginia Beach is at the frontlines of climate change, experiencing impacts like sea-level rise and recurrent coastal flooding. But as we learned at the event, the city and its surrounding communities are emerging as leaders in engaging in initiatives to address these issues.
“We are not as well prepared as we need to be to address the full scope of projected realities in the year 2100” Mayor Sessoms stated, “and we can, and must, make continued improvements.” His message was echoed by a group of bipartisan mayors and state delegates, city planners, legal experts, and university scientists. They stressed that while state and federal governments often struggle to move beyond the political debate of whether manmade climate change is happening, residents of the Tidewater area of Virginia are focused on developing a robust response to rising seas and recurrent coastal flooding.
Mayor Sessoms’ sentiments paralleled the earlier statements of Democratic Mayor Paul Fraim from Norfolk, VA that "[t]his is one of the greatest threats of our lifetime,” and “a threat that we can no longer afford to ignore."
Natural gas wells represent a significant source of U.S. greenhouse gas (GHG) emissions, as many of them leak methane, which is more than 20 times more potent than carbon dioxide. But while scientists know that “fugitive methane” is a concern, there’s much uncertainty about the full extent of the problem. A new study from the University of Texas—developed in partnership with the Environmental Defense Fund and nine natural gas production companies (Anadarko, BG Group, Chevron, EnCana, Pioneer, Shell, Southwest, Talisman, ExxonMobil)—sheds some light on this perplexing issue.
In the absence of federal action to reduce greenhouse gas (GHG) emissions, nine northeastern states have drafted a plan to stabilize power plant GHG emissions through 2015, and reduce them by 10% by 2020. WRI has served as facilitator for this cooperative action that has developed a market-driven system to control GHG emissions – the first of its kind in the U.S. The nine states alone produce greenhouse gases roughly equivalent to Germany’s emissions. WRI stands ready to assist in the replication of this system in the Midwest and the West Coast.
JP Morgan, one of the world’s leading investment banks with 8,000 clients in more than 100 countries, has adopted new environmental policies based in significant part on WRI advice. JP Morgan will account for greenhouse gas emissions associated with their lending portfolio. The bank will work with clients to develop financing solutions to fund development of lower carbon-emitting technology solutions and investments in greenhouse gas reductions. The bank will lead efforts with other financial institutions advocating for the U.S. government’s adoption of a market-based national policy on greenhouse gas emission reductions.
The financial implications of environmental opportunities and risk need to be understood by financial institutions and investors, and reflected in the world’s capital markets. Our collaboration with Merrill Lynch, one of the world’s leading financial management and advisory companies, has resulted in their report, “Energy Security and Climate Change: Investing in the Clean Car Revolution.” Merrill Lynch uses this report to advise clients about investments in the auto industry. WRI’s work with Merrill Lynch advances our efforts to involve the financial sector in addressing climate change.
WRI’s partnership with General Electric is one example of harnessing the power of business to solve environmental challenges. This year, GE launched “Ecomagination”, a climate strategy based on product development and operational performance goals. GE plans to double its revenue from energy-efficient and other green products while reducing its corporate greenhouse emissions by 2010. Working with WRI, as a member of our corporate working group on climate, GE made the business decision that it can find opportunity in selling technologies that reduce greenhouse gas emissions. When an iconic company like GE makes confronting global climate change a major element of its business strategy, other corporate leaders take heed.
As the U.S. Environmental Protection Agency (EPA) moves forward with standards to reduce emissions from existing power plants—expected to be proposed by June 2014—many states are beginning to think about how they will comply. WRI’s fact sheet series, Power Sector Opportunities for Reducing Carbon Dioxide Emissions, examines the policies and pathways various states can use to cost-effectively meet or even exceed future power plant emissions standards. This post explores these opportunities in Michigan. Read about additional analyses in this series.
New analysis by WRI reveals that Michigan has already made big strides to reduce its carbon dioxide emissions, including saving energy and increasing renewable power. And, it has the potential to go even further. According to our research, Michigan can reduce its power sector carbon dioxide (CO2) emissions 33 percent below 2011 levels by 2020 by complying with existing policies and improving infrastructure already in place. Taking these actions now can help the state meet future EPA emissions standards for existing power plants and achieve significant economic benefits.