By Marc J. Lane
The United Nations’ Intergovernmental Panel on Climate Change has just delivered the world’s leading climate scientists’ unvarnished assessment: rising global temperatures, unequivocally caused by human activities, are affecting every corner of the planet’s land, air and sea. Dwindling ice sheets, rising sea levels, and changes in the oceans as they lose oxygen and become more acidic are already causing unprecedented and widespread heat waves, wildfires, droughts and floods. The earth is getting so hot that, in about a decade, temperatures will probably blow past the most ambitious threshold set in the Paris accord. The future, bleak at best, will turn on how seriously the world takes the threat and meaningfully reduces carbon emissions.
President Joe Biden’s once-in-a-century infrastructure bill, which passed the Senate on August 10, provides new money for climate resilience unmatched in American history. Tens of billions of dollars will protect against floods, reduce damage from wildfires, develop new sources of drinking water in areas plagued by drought, and even relocate whole communities vulnerable to climate disaster. The bill also includes $7.5 billion to create charging stations all across the United States, which will help spur electric vehicle adoption, and another $7.5 billion to transition buses and other public transportation away from fossil fuels and to zero-emission options.
No doubt the bipartisan, trillion-dollar bill the president brokered was a good start in tackling the warming of the planet. But more needs to be done, and the “human infrastructure” measure likely to pass the Senate later this year presents that very opportunity.
The reconciliation bill is likely to include a carbon-border tariff, a tax on imports from nations that lack aggressive climate-change policies. The European Union has announced its own “carbon border adjustment,” so if we don’t do the same, we may run afoul of global trade rules. And if we squander the opportunity to pressure polluting countries to change their ways, we’ll suffer from their irresponsibility.
The human infrastructure bill is also expected to impose a fee on the emission of methane, a greenhouse case even more potent that carbon dioxide, at least over the short term. The rationale is irresistible: if we want to discourage the use of methane, we need to make it more expensive.
And a clean electricity standard is also likely to find its way into the reconciliation bill. Such a standard would require that a given share of electricity sold by utilities must come from clean energy sources. The mandate would help achieve the president’s goal of reaching 100% carbon-free power by 2035.
In UN Secretary General Antonio Guterres’ powerful words, “ [The climate panel’s report is ] a code red for humanity. The alarm bells are deafening, and the evidence is irrefutable. Greenhouse gas emissions from fossil fuel burning and deforestation are choking our planet and putting billions of people at immediate risk.”
The future is in our hands. With the commitment of government, business and the investment community, our planet’s devastation need not be inevitable.
Our investment affiliate, Marc J. Lane & Company, helps our clients with their investment decisions. If you would like to explore how your portfolio can meaningfully give voice to your own social and environmental concerns, please reach out to Marc Lane, at 312/372-1040 or MLane@MarcJLane.com, in confidence.