Environment & Climate Change

To date, most of the climate policy attention has been focused on the need to reduce the greenhouse gases that are causing climate change and, as a corollary, to accelerate the U.S. economy’s transition from fossil fuels to clean energy. Yet climate change also is straining our nation’s emergency response capabilities as traditional climate-infused disasters such as hurricanes and floods become more frequent and destructive. At the same time, the emergency response community faces new challenges as slower-to-develop climate impacts like drought, heat, and wildfire increasingly are hitting an acute tipping points and becoming life- and livelihood-threatening disasters.

The geopolitical and geo-economic forces wrought by the coronavirus pandemic, as examined previously in this series, are likely to slow the transition to a more sustainable global energy mix. Fortunately, the pandemic has also resulted in governments gaining vastly greater influence over whether this shift stalls or accelerates.

For most people, there was nothing to celebrate when the International Monetary Fund downgraded its outlook for global economic growth in June, anticipating a contraction of 4.9% for 2020. Yet for others, such as the small but persistent group of economists and others known as the “degrowth movement,” the Covid-induced economic slowdown has a silver lining.

The search for silver linings to the coronavirus pandemic has come up woefully short. But one hopeful — and much talked of — prospect is that the disruption will accelerate the global shift to a more sustainable energy future.

Today’s economic crisis leaves us with an unsettling and perplexing regret. Why weren’t financial portfolios already adjusted for risks that stem from health events such as pandemics? After all, financial portfolios are adjusted for liquidity risks, market risks, credit risks, and even operational and political risks.