Market Forces

Empowering Chile’s Climate Action: A Citizen’s Guide to Article 6

By Luis Fernandez Intriago / Bio / Twitter profile / Published: April 18, 2024

This blog was authored by Francisco Pinto and Rodrigo Bórquez, economists of the Climate Action Teams (CAT) initiative, and by Environmental Defense Fund economist Luis Fernández Intriago.

Source: Climate Action Teams

Reducing emissions is imperative to address climate change. The mechanisms established in Article 6 of the Paris Agreement can serve as vital tools in our quest to stop the impacts of climate change and safeguard the future of our planet—but navigating its complexities can be tricky.

To tackle this challenge, between June and August 2023, the Climate Action Teams (CAT-Chile) initiative, co-founded by EDF, and the Consensus Building Institute (CBI) conducted a dialogue process in Chile. We aimed to convene key players in a discussion to better understand Article 6’s potential to boost Chile’s climate ambition.

This fruitful dialogue, called “Climate Dialogue: Strengthening Chile’s Ambition through Article 6 of the Paris Agreement“, explored three specific areas:

The feasibility of implementing Article 6 in Chile,
The application of safeguards, and
The short-term actions and tasks to progress in this field.

The dialogue’s outcomes were delivered to Chile’s Ministry of the Environment to consider as they prepared to host their own public-private sector dialogue on ideas around the development of a Chilean Article 6 policy. Read More »

Also posted in Energy Transition, International, Uncategorized / Leave a comment

How Economists Can Leverage MethaneSAT Data for Climate Action

By Lauren Beatty / Bio / Published: March 28, 2024

This blog was co-authored by Maureen Lackner (Senior Manager of Economics and Policy Analysis, Environmental Defense Fund) and Lauren Beatty (High Meadows Postdoctoral Economics Fellow, Environmental Defense Fund).

Climate change is a pressing issue, partly fueled by methane: a greenhouse gas responsible for about 30% of today’s global warming. Reducing methane emissions will slow down the rate of near-term warming and help avert the worst climate damages. To tackle this problem, Environmental Defense Fund launched MethaneSAT, the world’s first satellite developed by an environmental non-profit. MethaneSAT aims to quantify regional emissions of methane across more than 80% of oil and gas production in the world, while disaggregating diffuse area emissions and high-emitting point sources.

MethaneSAT will generate publicly available data allowing stakeholders to track emissions and hold polluters accountable. This data will empower various actors – governments, companies, and investors – to make informed decisions about emission reduction strategies. It will be an invaluable resource for economists and public policy researchers aiming to analyze and design effective climate policies. Read More »

Also posted in Climate Change, Climate science, emissions, Technology / Tagged Methane, MethaneSAT | Leave a comment

What Climate-related Financial Risk Means for Communities: Part 3 – Community Banking

By Elle Stephens / Published: February 15, 2024

Climate change-driven events—like heat waves, droughts, floods, and fires—cause damage to communities’ and individuals’ health and safety. But these events also threaten the financial well-being of communities across the U.S. through their impact on markets and local economies. These risks are increasingly visible in the housing and mortgage markets.

In this three-part series, we’ll be breaking down how the climate crisis is creating risk for three key financial systems—and how these risks to the insurance system, the real estate market, and community banking can affect communities.

Part 3: Climate-related Risks to Community Banking and Credit Unions

Climate change poses risks to individual banks as well as the entire banking system by damaging banking infrastructure, destroying collateral, and causing borrowers to default on loans. Threats to banks, especially to smaller banks, translate to risks to communities and individual households. Small banks serve local economies, engaging in relationship banking with small businesses and individuals. Some smaller banks also provide higher interest rates for deposits, more favorable loans than larger banks, and “better overall economic performance for their communities.” Read More »

Also posted in Climate Change / Leave a comment

What Climate-related Financial Risk Means for Communities: Part 2 – Housing & Mortgage Markets

By Jesse Gourevitch / Published: February 7, 2024

Climate change-driven events—like heat waves, droughts, floods, and fires—cause damage to communities’ and individuals’ health and safety. But these events also threaten the financial well-being of communities across the U.S. through their impact on markets and local economies. These risks are increasingly visible in the housing and mortgage markets.

Part 2: Climate-related risks to the housing and mortgage markets

For many people, their home is their most important financial asset—which is increasingly put at risk by the impacts of climate change.

While the economic costs of climate-related hazards have been growing, there is mounting concern that housing markets are failing to fully price these risks, creating moral hazard and potentially causing real estate bubbles to develop. Indeed, previous work by EDF researchers has shown that residential properties exposed to flood risk are overvalued by $121–$237 billion.

Also posted in Climate Change / Leave a comment

What Climate-related Financial Risk Means for Communities: Part 1 – Insurance

By Karina French / Published: February 1, 2024

Climate change-driven events—like heat waves, droughts, floods, and fires—cause damage to communities’ and individuals’ health and safety. But these events also threaten the financial well-being of communities across the U.S. through their impact on markets and local economies. Nowhere is this more visible recently than in the property insurance market.

Part 1: Climate-related risks to the property insurance market

Over the last few years, we have witnessed big shifts in property insurance markets. Insurance costs have increased and availability decreased in regions of high risk to climate-driven disasters, driven in-part by the increasing frequency and severity of flooding, hurricanes, and wildfires, increasing development in areas prone to hazard, growing costs of rebuilding, and high costs of reinsurance.

Also posted in Climate Change / Leave a comment

To make nature financing more equitable, we must understand how NCS credits are used

By Morgan Bomer / Published: August 15, 2023

This blog was authored by Julia Ilhardt, former High Meadows Fellow, Global Climate Cooperation. It was originally published on EDF’s Climate411 blog channel. Read the full post here.

At the end of last year, 196 nations agreed to the historic Global Biodiversity Framework, which includes the goal to protect 30% of land and sea area by 2030. Still, nature is woefully underfinanced, with investments in nature-based solutions needing to double to USD 384 billion per year by 2025, according to UNEP.

Using crediting to incorporate natural climate solutions (NCS) into carbon markets is one way to generate significant finance for nature while cutting emissions, and it’s gaining public and private sector attention. However, both producing and using credits raises important equity considerations. A new paper from EDF focuses on the issues around use, including how credits may impact the communities surrounding polluting facilities. This blog lays out the framing, key issues, and potential solutions, with more detailed analysis available in the paper.

Also posted in Climate Change / Leave a comment