by John R. Nolon
Those of us who believe the overwhelming number of scientists who document and report on the existence of climate change tend to use those scientific conclusions to convince skeptics. There may be a better way. There are a number of institutions respected for their credibility and cautious approach to facts that have adopted this science and acted on the conclusion that climate change is occurring, that it is caused by us, and that the consequences are alarming.
The SEC, for example, requires companies to disclose material consequences of projected climate change on their business. The Department of Defense has identified that climate change “may act as an accelerant of instability or conflict,” as it “contribute[s] to food and water scarcity … [and increases] the spread of disease.” A study for Congress, co-chaired by a retired Navy admiral, “concluded that climate change is a ‘threat multiplier’ that adds new and unpredictable dangers to global physical and political stability.” In addition, the Supreme Court legally recognized that climate change is occurring in its Massachusetts v. EPA decision. Justice Stevens stated that:
“[t]he harms associated with climate change are serious and well recognized. Indeed, the NRC Report itself—which EPA regards as an ‘objective and independent assessment of the relevant science,’ identifies a number of environmental changes that have already inflicted significant harms, including ‘the global retreat of mountain glaciers, reduction in snow-cover extent, the earlier spring melting of ice on rivers and lakes, [and] the accelerated rate of rise of sea levels during the 20th century relative to the past few thousand years.”(citations omitted)
Outside the United States government, various other organizations recognize the reality of climate change. The Vatican sent a representative to the UN Conference on Climate Change to promote “an effective mitigation and adaptation to ongoing climate change.” Following the Copenhagen meeting, the Pope “denounced the failure of world leaders to agree to a new climate change treaty.” The insurance community has identified climate change as a threat to many geographic areas. In fact, Munich Reinsurance recognized the threat of climate change as early as 1973. This recognition has now spread throughout the insurance industry. Some insurance companies simply will not insure areas facing increased threats by natural disasters induced by climate change.
Foreign governments in Europe, Asia, and Latin America have officially recognized climate change. As a result, those foreign economies have seen growth in their clean technology sectors, while “[domestic clean technology’s] competitive position [is] ‘at risk‘ in the United States because of ‘uncertainties surrounding key policies and incentives.'”
Greenhouse gas continues to accumulate in the atmosphere. As concentrations rise, so do global temperatures, and the recognition that this trend has consequences. Using the increasing number of respected voices that are accepting the facts, assessing the risks, and developing strategies in response is an effective method of moving this critical discussion forward.
“The SEC, for example, requires companies to disclose material consequences of projected climate change on their business. The Department of Defense has identified that climate change “may act as an accelerant of instability or conflict,” as it “contribute[s] to food and water scarcity … [and increases] the spread of disease.”
Um, you forgot to mention the Chicago Climate Exchange, which has folded, and the EU Climate Exchange which is trading carbon at about $10 per ton, down from $30. The markets clearly say climate change is dead. Looks like you bet on the wrong horse there Mr. Green Law.
Capasso, Samuel J.
@klem: I disagree with your comment. First, the quoted section does not refer at all to market price; it describes the impact of climate change on public goods, i.e. national security, public, health, and environmental conditions requisite for meeting basic needs of food and water. The SEC disclosure goes to informing market price by disclosing consequences of climate change on the business. For instance, in the case of a food based business such as McDonalds, the increase risk and incidence of drought due to climate change and subsequent decrease in supply of food stuffs is an important bit of information regarding projections of long term profitability.
Second, market price does not determine whether something is true or not; it is a reflection of the equilibrium between supply and demand for something. A price is a reflection of rational expectations regarding the item in question, including future value and risk. If low carbon prices say anything, it is that market participants do not perceive an increase in regulation in the short-term. Perhaps you could say that the market price is saying climate change is not on the minds of the participants, but that does not determine truth.
William P. Rothfarb III
“If low carbon prices say anything, it is that market participants do not perceive an increase in regulation in the short-term.”
It also indicates reduced demand and oversupply of the product in question. In other words, like Klem said, the markets clearly say climate change is dead. Looks like you bet on the wrong horse there Mr. Green Law. That is the truth to which you refer so frequently.
All the markets say is that investors do not expect significant regulation of greenhouse gases in the EU and US in the near future. This has nothing to do with science, only with politics.
Imagine if London in the 1800s had set up a Smog Exchange where investors and manufacturers could buy and sell soot credits, anticipating that the city would soon crack down on the air pollution that killed so many people. Imagine then that the city chose not to implement pollution control legislation after all. The markets would collapse. But the air would still be brown.