How Financial Markets Can Grow More Climate Savvy
https://eos.org/articles/how-financial-markets-can-grow-more-climate-savvy]
Source: By Jenessa Duncombe, Eos/AGU.
Excerpt: Energy investors looking to steel themselves against topsy-turvy market transitions could try something new: factoring extreme weather risks into their investments. At present, financial markets may be failing to account for the physical risks of extreme weather from climate change. That’s a problem, according to Paul Griffin, an accounting professor at the University of California, Davis, because overpricing could lead to an extreme correction to the market down the road. “If the market doesn’t do a better job of accounting for climate, we could have a recession—the likes of which we’ve never seen before,” Griffin said in a press release [https://www.eurekalert.org/pub_releases/2020-02/uoc--ewc021320.php]. On the other hand, if markets do adjust and societies reduce emissions, “a couple of generations from now, we might have a more stable planet,” Griffin told Eos. “This is something that will benefit generations beyond ourselves.” ...Many energy firms have infrastructure in vulnerable areas. The Gulf Coast, where numerous oil refineries are located, is facing rising seas and more extreme storms. Southern states are also seeing skyrocketing temperatures, which threatens worker safety. California and other western states are exposed to arid air and wildfires, causing power disruptions. ...Factoring climate change into market decisions is difficult, said Griffin, because “you’ve got these massive costs that are far more distant that the markets have a really hard time grappling with.” Moving forward will take both political will and a responsive judicial system to tackle the task, said Griffin....
Source: By Jenessa Duncombe, Eos/AGU.
Excerpt: Energy investors looking to steel themselves against topsy-turvy market transitions could try something new: factoring extreme weather risks into their investments. At present, financial markets may be failing to account for the physical risks of extreme weather from climate change. That’s a problem, according to Paul Griffin, an accounting professor at the University of California, Davis, because overpricing could lead to an extreme correction to the market down the road. “If the market doesn’t do a better job of accounting for climate, we could have a recession—the likes of which we’ve never seen before,” Griffin said in a press release [https://www.eurekalert.org/pub_releases/2020-02/uoc--ewc021320.php]. On the other hand, if markets do adjust and societies reduce emissions, “a couple of generations from now, we might have a more stable planet,” Griffin told Eos. “This is something that will benefit generations beyond ourselves.” ...Many energy firms have infrastructure in vulnerable areas. The Gulf Coast, where numerous oil refineries are located, is facing rising seas and more extreme storms. Southern states are also seeing skyrocketing temperatures, which threatens worker safety. California and other western states are exposed to arid air and wildfires, causing power disruptions. ...Factoring climate change into market decisions is difficult, said Griffin, because “you’ve got these massive costs that are far more distant that the markets have a really hard time grappling with.” Moving forward will take both political will and a responsive judicial system to tackle the task, said Griffin....