IEA: Coronavirus ‘accelerating closure’ of ageing fossil-fuelled power plants

IEA: Coronavirus ‘accelerating closure’ of ageing fossil-fuelled power plants

Josh Gabbatiss, Carbon Brief, 27 May 2020

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This year will see the largest ever drop globally in both investment and consumer spending on energy as the coronavirus pandemic hits every major sector, according to the International Energy Agency (IEA).

The crisis is accelerating the shutdown of older fossil-fuelled power plants and refineries, with the agency saying it could provide an opportunity to push the global energy sector onto a “more resilient, secure and sustainable path”.

In the latest edition of the World Energy Investment report, which Carbon Brief has covered in previous years, the IEA has gone beyond its usual remit of reviewing annual trends. 

Its analysis looks ahead to the coming year and estimates the impact of this year’s economic turmoil on energy investment, which was expected to grow by around 2% prior to Covid-19. It is now expected to drop by 20%, or almost $400bn.

Meanwhile, as demand and prices collapse, consumer spending on oil is expected to drop by more than $1tn, prompting a “historic switch” as spending on electricity exceeds oil for the first time.

Here, Carbon Brief has picked out some key charts to illustrate the economic repercussions of the pandemic across the energy sector.

Energy investment will drop by a fifth

The “baseline expectation” for 2020 is a global recession resulting from widespread lockdowns, according to the IEA. Last month, the agency estimated this will also lead to CO2 emissions dropping by 8% this year in the largest decline ever recorded.

Based on the latest investment data and project information, announcements from companies and governments, interviews with industry figures and its own analysis, the IEA concludes such a recession will see energy investment drop by a fifth. This can be seen in the chart below.

Energy investment is set to fall by a fifth in 2020 due to the coronavirus pandemic. Fuel supply (red) includes all investments associated with the production and provision of fuels to consumers, consisting mainly of oil, gas and coal investments. Power sector (blue) includes spending on power-generation technologies, grids and storage. Energy end use and efficiency (yellow) includes the investment in efficiency improvements across all end-use sectors. Source: IEA
Energy investment is set to fall by a fifth in 2020 due to the coronavirus pandemic. Fuel supply (red) includes all investments associated with the production and provision of fuels to consumers, consisting mainly of oil, gas and coal investments. Power sector (blue) includes spending on power-generation technologies, grids and storage. Energy end use and efficiency (yellow) includes the investment in efficiency improvements across all end-use sectors. Source: IEA

These estimates are based on assumptions about the duration of lockdowns and coronavirus recovery trajectories.

The IEA notes that “almost all” investment activity has been disrupted by these measures, as a result of restrictions to the movement of people, goods and equipment. 

However, the largest impacts are the result of declines in revenues due to falling demand and prices, with the clearest example coming from the oil sector. Analysis of daily data until mid-April suggests countries in full lockdown have seen energy demand drop by a quarter.

As a result, the agency also estimates that these factors, combined with a rise in cases of people not paying their energy bills, will see revenues going to both governments and industry fall by over $1tn this year.

Crisis ‘accelerating’ shift from low-efficiency technologies

Every year energy infrastructure is retired and replaced with new equipment. Typically, the replacement technologies will be cleaner and more efficient, although this is not always the case. 

The coronavirus crisis is expected to have an impact on this rate of turnover and, indeed, it is already contributing to the retirement of some older power plants and facilities, as the chart below illustrates.

The Covid-19 crisis is hastening the retirement (light blue) of some older plants and facilities, but also impacting consumer spending on new and more efficient technologies (dark blue), with the potential for a net decrease (yellow dot) in upstream oil-and-gas facilities. Source: IEA.
The Covid-19 crisis is hastening the retirement (light blue) of some older plants and facilities, but also impacting consumer spending on new and more efficient technologies (dark blue), with the potential for a net decrease (yellow dot) in upstream oil-and-gas facilities. Source: IEA.

The economic downturn and “surfeit of productive capacity in some areas” as overall demand plummets is already “accelerating” the closure and idling or inefficient technologies, including refineries and some coal-fired power plants.

However, the IEA warns that equally governments might respond to the pandemic by underinvesting in new technologies and remaining reliant on inefficient, older technology. The agency estimates efficiency investment could drop by 10-15% as spending is cut back.

The report warns that policymakers should keep these elements in mind and “combine economic recovery with energy and climate goals”. Dr Fatih Birol, executive director of the IEA, said in a statement that while the pandemic has brought lower emissions it has been “for all the wrong reasons”:

“The response of policymakers – and the extent to which energy and sustainability concerns are integrated into their recovery strategies – will be critical.”

Clean energy spending ‘relatively resilient’

The share of global energy spending going towards clean energy, including renewables as well as nuclear and efficiency improvements, has been flat-lining at around one-third for the past few years.

As the chart below shows, this is likely to change this year as clean energy’s share edges closer to two-fifths of overall spending.

Breakdown of clean energy investment by sector in USD (left x-axis), with the % overall share (right x-axis) of spending indicated by a grey line. Source: IEA.

Clean energy investment is expected to remain “relatively resilient” this year, with spending on renewable projects falling by a comparatively small 10%. 

However, according to the IEA, the main reason for clean energy increasing its share is that fossil fuels are set to take such a “heavy hit”. In absolute terms, spending on these technologies is “far below levels” required to accelerate energy transitions.

The agency notes that investment trends have long been “poorly aligned” with the world’s needs and are still set to fall short of the future it has outlined in its benchmark Sustainable Development Scenario (SDS).

Last year’s edition of the World Energy Investment report concluded that investment in low-carbon energy sources must more than double by 2030 if the world is to meet its Paris Agreement targets.

While the slowdown in clean energy spending is less significant, it still “risks undermining the much-needed transition to more resilient and sustainable energy systems,” according to Birol.

Power sector hit hard

International power investment is set to drop by 10% as a result of the Covid-19 pandemic, according to the agency. 

Virtually every component of the sector is expected to see a decline in investment, with hydro the only exception, as the chart below demonstrates.

Global investment in the power sector by technology, with figures from the previous three years and estimates for 2020 (yellow). Source: IEA.
Global investment in the power sector by technology, with figures from the previous three years and estimates for 2020 (yellow). Source: IEA.

Increases in residential electricity demand around the world during lockdown are being “far outweighed” by reductions in commercial and industrial operations, the agency reports. A 9% decline in spending on electricity networks this year is also expected.

The IEA says some parts of power investment are more exposed, specifically fossil fuel-based generation. 

Meanwhile, higher shares of renewables are being dispatched due to low operating costs and priority access to networks. Nevertheless, renewables are still taking a hit, particularly distributed solar photovoltaics (PV) as households and companies cut back on spending.

Technologies with a longer lead time, notably offshore wind and hydropower, are expected to do better despite some delays.

Electricity spending pulls ahead of oil

Oil accounts for most of the decline in revenues expected this year. Furthermore, in a “historic switch” consumer spending on electricity could exceed spending on oil for the first time ever. 

While power-sector revenues are expected to fall by $180bn, oil spending will likely drop by at least $1tn. This can be seen in the chart on the left below. Taken together, investment in oil and gas is expected to fall by almost a third in 2020. 

Both global end-use spending by consumers on energy (left) and estimated 2020 investment compared to 2019 show oil is expected to see the biggest decline in investment activity this year. Source: IEA.

The decline in aviation and road transport, which represent nearly 60% of oil demand, are responsible for this disproportionate decline.

Meanwhile, the impact on gas has so far been more moderate, but could fall further due to reduced demand in power and industry settings.

The report also highlights the global shale sector, which was already under pressure, as being particularly vulnerable. 

With investor confidence and access to capital in decline, the IEA predicts shale investment will halve in 2020 and notes the outlook for “highly leveraged shale players in the US” is now “bleak”.

Coal decline given a ‘floor’ by China

Coal is estimated to be the fuel hardest hit by the crisis after oil. Coal demand could drop by 8% this year, investment in coal supply is set to fall by a quarter and spending on new coal-fired plants is set to fall by around 11%.

However, any decline in coal’s fortunes may be curtailed by the recovery of demand for the fossil fuel in China. According to the IEA, investment activity there “may put a floor” under further reductions in coal-power investment this year.

The nation’s focus on coal is illustrated in the chart below, which shows final investment decisions (FIDs) dropping to their lowest levels in a decade, but China providing virtually all of them in the year so far.

Coal-fired power generation capacity (GW) subject to a final investment decision (FID), with China coloured in green. Source: IEA.
Coal-fired power generation capacity (GW) subject to a final investment decision (FID), with China coloured in green. Source: IEA.

Using data available so far, the IEA notes that approvals for new coal plants in the first quarter of 2020, were “running at twice the rate observed over 2019 as a whole”, primarily in China.

Electric vehicle sales rising as overall market contracts

Last year was a difficult time for the car industry, with total sales growth slowing in all major regions and turning negative in China and the US.

However, this “turbulent” period for the industry is “likely to appear mild” in comparison with 2020, according to the IEA. 

Lockdowns have already severely impacted sales and, across the year, the agency estimates a drop of around 15% – dramatic even compared to the 10% drop that followed the 2008 financial crisis. Negative trends in overall car sales can be seen in the right-hand chart below.

Global sales of electric passenger vehicles – cars, vans and small trucks – and market share, indicated by a red line (left chart). Total light-duty vehicle sales (right). Source: IEA.
Global sales of electric passenger vehicles – cars, vans and small trucks – and market share, indicated by a red line (left chart). Total light-duty vehicle sales (right). Source: IEA.

However, even though electric vehicle sales followed wider patterns and stalled in 2019 largely due to declining Chinese purchases, their overall market share continued to climb. 

This can be seen in the chart on the left, which shows that electric cars are expected to go against the broader trend in 2020. The IEA estimates that owing to policy support, particularly in Europe, electric vehicle sales will increase this year, as will their share of the market (indicated by the red line).

Battery storage spending fell as prices dropped

Investment in battery storage fell for the first time last year, as the chart below shows. Overall, spending on grid-scale and behind-the-meter batteries fell by 15%, with overall investment just above $4bn.

Investment in both grid-scale (left) and behind-the-meter battery storage (right). Source: IEA.
Investment in both grid-scale (left) and behind-the-meter battery storage (right). Source: IEA.

The IEA states this decline took place as costs for battery storage fell rapidly, a trend the agency attributes to maturing supply chains and markets, more efficient production and competition within the sector.

The report mentions fires at energy storage installations in South Korea and regulation uncertainty in China as some of the factors behind the decline in interest last year.

Declining behind-the-meter battery spending also reflects the distributed solar PV market, for which investment slowed last year in a trend expected to continue as consumer spending drops off due to coronavirus.

The agency notes that grid-scale battery investments are also expected to decline this year against the backdrop of a general decrease in power activity. 

However, it says this setback “is likely to be shortlived” due to the technology’s growing importance for system security and flexibility. 

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IEA: Coronavirus ‘accelerating closure’ of ageing fossil-fuelled power plants

Josh Gabbatiss, Carbon Brief, 27 May 2020

Published under a CC license. Carbon Brief welcomes the reproduction of unadapted material in full for non-commercial use, credited ‘Carbon Brief’ with a link to the article.

art, the built environment, & the Bizot Green Protocol

Works of art. History. Cultural heritage. The market. Galleries. Art fairs. Museums. Private museums. Institutional and private collections. Fiduciary care. Value.

Let’s consider a pressing issue:

How collections are housed, managed, and cared for and the protection of works of art and tangible assets in an age of increasingly erratic weather, increasing sea-level rise, floods, fires, storms, … and pandemics – which in themselves and the response to which can be devastating.

Does one barricade the art behind flood walls and barriers? Insure the works of art? (Insurance is a good idea. Insurance does not, however, mitigate or prevent future damage. Insurance is used to protect the “value” of the art, not the work of art itself. It is used after damage occurs to recover value.)

Can we protect works of art while mitigating possible future damage?

Atmospheric CO2 is a key factor leading towards the storms, floods, and fires that can be so damaging to art and tangible assets. Is it possible to care for our collections while reducing emissions of CO2 into the air?

The Bizot Group of museum directors, or the International Group of Organizers of Large-scale Exhibitions, thinks so.

Max Hollein, now the Director of New York’s Metropolitan Museum of Art, was Chairman of the Bizot Group in 2014. Richard Armstrong, Director of the Solomon R. Gugenheim Museum, and Glen Lowry, Director of the Museum of Modern Art, are members.

Wangechi Mutu (Kenyan, born Nairobi, 1972), “The Seated II” (bronze, 2019) situated in one of four niches in the facade of New York’s Metropolitan Museum of Art. Courtesy of the the artist, the Metropolitan Museum of Art, and Gladstone Gallery, New York and Brussels.


Wangechi Mutu (Kenyan, born Nairobi, 1972), “The Seated II” (bronze, 2019). Courtesy of the the artist, the Metropolitan Museum of Art, and Gladstone Gallery, New York and Brussels.

Axel Rüger, Director of the Van Gogh Museum in Amsterdam from 2006 until June of 2019 when he left the Van Gogh Museum to take up a new appointment as Chief Executive of London’s Royal Academy of Arts, is a member.

So are many others.

The Bizot Group agreed the Bizot Green Protocol in 2015:

The directors agree that museums can reduce the amount of CO2 emissions they are responsible for while recognizing their duty of care to collections:

1.  Guiding Principles
Museums should review policy and practice, particularly regarding loan requirements, storage and display conditions, and building design and air conditioning systems, with a view to reducing carbon footprints.

Museums need to find ways to reconcile the desirability of long-term preservation of collections with the need to reduce energy use.

Museums should apply whatever methodology or strategies best suit their collections, building and needs, and innovative approaches should be encouraged.

The care of objects is paramount. Subject to this,

environmental standards should become more intelligent and better tailored to specific needs. Blanket conditions should no longer apply. Instead conditions should be determined by the requirements of individual objects or groups of objects and the climate in the part of the world in which the museum is located;

where appropriate, care of collections should be achieved in a way that does not assume air conditioning or other high energy cost solutions. Passive methods, simple technology that is easy to maintain, and lower energy solutions should be considered;

natural and sustainable environmental controls should be explored and exploited fully;

when designing and constructing new buildings or renovating old ones, architects and engineers should be guided significantly to reduce the building’s carbon footprint as a key objective;

the design and build of exhibitions should be managed to mimimise waste and recycle where possible.

2.  Guidelines
For many classes of object containing hygroscopic material (such as canvas paintings, textiles, ethnographic objects or animal glue) a stable relative humidity (RH) is required in the range of 40 – 60% and a stable temperature in the range 16-25°C with fluctuations of no more than ±10% RH per 24 hours within this range. More sensitive objects will require specific and tighter RH control, depending on the materials, condition, and history of the work of art. A conservators evaluation is essential in establishing the appropriate environmental conditions for works of art requested for loan.

Environmental Sustainability – reducing museums’ carbon footprint,”National Museum Directors Council

See:

Environmental sustainability – reducing museums’ carbon footprint,” National Museum Directors Council

Wangechi Mutu: The NewOnes, will free us,” Metropolitan Museum of Art, The Facade Commission, 9 September 2019 – 9 June 2020

Wangechi Mutu, Gladstone Gallery

Axel Rϋger Appointed Chief Executive of London’s Royal Academy of Arts,” Artforum, 13 February 2019

Axel Rüger,” 40 Under 40 Europe 2018, Apollo Magazine, 3 September 2018

Groupe Bizot, Letter of 26 February 2014 to Mr. Mikhail Piotrovsky, Director, State Hermitage Museum, St. Petersburg, Russia

Q&A: Could climate change and biodiversity loss raise the risk of pandemics?

Q&A: Could climate change and biodiversity loss raise the risk of pandemics?

Daisy Dunne, Carbon Brief, 15 May 2020

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Across the world, millions of people have tested positive for Covid-19 – and countless more have seen their lifestyles completely transformed as a result of the virus.

It is not yet known exactly what triggered the current outbreak, but researchers suspect that the virus passed from bats to humans through an unknown intermediary animal, possibly a pangolin.

Politicians in the UK have called this pandemic a “once-in-a-century” crisis. But scientists have warned that the ongoing disturbance of species through human activities and climate change could be raising the risk of potentially pandemic-causing diseases passing from animals to humans.

The study of the “spillover” of disease from animals to humans has received renewed focus in light of the pandemic. The Intergovernmental Panel on Climate Change (IPCC) – a major international collaboration of climate scientists – is now looking into how the influence of warming on such events could be included in its next major climate report due next year.

In this explainer, Carbon Brief examines what is known about how climate change and biodiversity disturbance, including habitat loss and human-animal conflict, could influence the risk of diseases being transmitted from animals to humans.

How does an animal-to-human disease spillover turn to a pandemic?

When humans come into contact with other animals, they can pass harmful pathogens between one another. The passing of an infection or disease from a vertebrate animal to a human is known as a “zoonosis”, according to the World Health Organisation (WHO). (Vertebrate animals include mammals, birds and reptiles, but not insects, such as mosquitoes.)

Such diseases have a major impact on health, accounting for two-thirds of all human infectious diseases and three out of four newly emerging diseases.

Serious diseases that have spilled over from animals to humans include Ebola in Africa, Marburg in Europe (and subsequently in Africa),  Hendra virus in Australia and severe acute respiratory syndrome (SARS) coronavirus and Nipah virus in east Asia. Some have gone on to have a lasting, global impact, such as HIV/AIDS and swine flu (H1N1). The current Covid-19 pandemic was also most likely caused by a spillover.

The number of potentially harmful viruses circulating in mammal and bird populations that have not yet spilled over to humans is estimated to be up to 1.7m, according to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). (IPBES is an independent group of international researchers monitoring biodiversity issues).

The spillover of disease from animals to people can happen in many ways, including directly through animal bites, the consumption of raw or undercooked animal meat or products such as milk, or through contaminated water. Diseases can also spread indirectly if humans come into contact with a surface that has been contaminated by an infected animal. Both wild animals and livestock can pass on disease.

A mouse opossum (Marmosa sp.) raids the trash in Peru. Credit: Anton Sorokin / Alamy Stock Photo
A mouse opossum (Marmosa sp.) raids the trash in Peru. Credit: Anton Sorokin / Alamy Stock Photo

(Sometimes, transmission occurs through an intermediary species that can carry the disease without getting sick. Scientists suspect this is how the Covid-19 pandemic started.)

Out in the wild and in settings where humans and animals come into contact, these kinds of interactions happen regularly – and it is rare for one to end with a human being infected by a new disease, explains Dr David Redding, a research fellow at the Zoological Society of London. He tells Carbon Brief:

“There are lots of different factors that need to all overlap at the same time for there to be a contact that is both effective in terms of transferring a live pathogenic organism and then also for that very rare situation where that pathogen has an adaptation that allows it to invade our immune system.”

Even if a disease is effectively transmitted from an animal to a person, it is unlikely that they will then pass it on to someone else, he adds:

“I would say most – possibly 99% – of all diseases that are caused in that way can’t then be passed on. So we’ve got another ‘filter’ that dictates that people have to be infected in a particular way that allows them to shed viruses effectively to other people.”

This “virus shedding” can happen in various ways. Like other respiratory diseases, Covid-19 can be transmitted when a carrier coughs or sneezes in close proximity to another person. (Scientists are still debating whether the virus can also be passed on in other ways.)

The ability of the new pathogen to spread directly from person to person is a key ingredient for a disease to take hold in a population, Redding says. (Some animal-borne diseases require a vector to spread from person to person, such as West Nile virus and Lyme disease.)

An illness outbreak is said to become an “epidemic” when its impact on people in a single community or region is “clearly in excess of normal expectancy”, according to the WHO. The term “pandemic” describes the worldwide spread of a new disease. (When a disease is “endemic” it has a continuous presence in a population or area.) 

Since 1900, there have been pandemics at “intervals of several decades”, according to the WHO. The worst in this time period was Spanish flu, which killed an estimated 50 million people from 1918-19.

A group of people standing outdoors wearing masks over their mouths, probably taken during the Spanish Flu epidemic of 1918. Credit: Niday Picture Library / Alamy Stock Photo
A group of people standing outdoors wearing masks over their mouths, probably taken during the Spanish Flu epidemic of 1918. Credit: Niday Picture Library / Alamy Stock Photo

Prior to Covid-19, every outbreak considered to be a pandemic by the WHO since 1900 has been caused by influenza, a virus that transmits from person to person. Some new strains of flu originate in animals, such as bird flu, but most new strains arise in human populations – and so would not be considered animal-borne.

There are many factors that can determine whether an outbreak reaches epidemic or pandemic status. These include human factors, such as preparedness and early action to prevent the illness from spreading, and also the traits of the pathogen itself, says Redding:

“The characteristics of the pathogen and its ability to spread are two key components in causing these rare events.”

For instance, if the pathogen causes very severe illness, the sufferer is less likely to be able to travel to a new place to pass on the disease, Redding says. This is also the case if the mortality rate is particularly high.

In contrast, if the disease causes mild to undetectable symptoms for at least some sufferers – as is the case with Covid-19 – it is more likely that people will inadvertently spread it to new places, he says.

This may go some way to explaining why previous serious animal-borne disease outbreaks have not reached pandemic status, Redding explains.

Members of a burial team prepare for a burial in Komende Luyama village. Eastern Sierra Leone was a hot spot for Ebola for several months, but eventually authorities managed to bring down infection rates to just a few cases per week. 17 October 2014 Credit: Tommy E Trenchard / Alamy Stock Photo
Members of a burial team prepare for a burial in Komende Luyama village. Eastern Sierra Leone was a hot spot for Ebola for several months, but eventually authorities managed to bring down infection rates to just a few cases per week. 17 October 2014 Credit: Tommy E Trenchard / Alamy Stock Photo

For example, Ebola – a disease initially spread to humans by fruit bats – has caused several serious epidemics in West Africa, but has not established itself on a worldwide scale. It has a mortality rate of around 50%. The mortality rate of Covid-19 is not yet known, though it is likely to be below 10%.

It is also worth noting that the likelihood of a disease turning to a pandemic has been heightened in recent decades by increased global connectivity, particularly through frequent air travel, Redding says:

“Plagues in the medieval times took years to spread across Asia. Whereas we look at today’s outbreaks and we can see that they can spread in hours.”

Overall, for a spillover event to turn into a pandemic, there must be a “perfect storm” of several complex factors all occurring at the same time – which, at present, does not happen very often, says Redding: “I think history shows us that these sort of large outbreaks happen a couple of times a century.”

Could climate change and biodiversity disturbance affect the risk of spillover?

Every new animal-borne disease starts with humans coming into contact with wildlife. And it is likely that climate change and the disturbance of biodiversity could play a role in shaping the frequency, timing and location of these meetings, says Prof Hans-Otto Poertner, head of biosciences at the Alfred Wegener Institute (AWI) and co-chair of the impacts chapter of the next major assessment report from the IPCC. He tells Carbon Brief:

“Climate change is clearly a factor that can influence these relationships. Climate change shapes the biogeographical distribution of species. If, in the future, we see species moving into areas where humans are prevalent, we could see new opportunities for pandemics to evolve.”

Research has shown that climate change is shifting where species live, both on land and in the ocean. This is because, as temperatures increase and rainfall levels change, some species are being forced to seek out new areas with climate conditions they are able to tolerate. (Species that are not able to adapt could face extinction.)

A review published in Science in 2017 looking into 40,000 species across the world found that around half are already on the move as a result of changing climate conditions.

In general, species are seeking cooler temperatures by moving towards the Earth’s poles. Land animals are moving polewards at an average rate of 10 miles per decade, whereas marine species are moving at a rate of 45 miles per decade, according to the review.

Dugong feeding in the seagrass bed, Dimakya Island, Palawan, Philippines. Credit: Nature Picture Library / Alamy Stock Photo

However, the movement of animals is complicated by other factors, such as the changing availability of food, the shifting distribution of predators and changing patterns of human land-use, the review says. This makes it difficult to predict exactly where species will move to.

It is likely that the movement of species will have consequences for human health, says Prof Birgitta Evengard, a senior researcher of infectious diseases at Umea University in Sweden, who was one of the authors of the review. She tells Carbon Brief:

“When land-based animals move, they bring with them their [viruses] – and they will spread them.” 

So far, there has not been a great deal of research into how climate change-driven shifts to animal ranges could affect the chances of disease spillover on a global scale, says Poertner.

In one example, a research paper by Redding found that climate change could heighten the risk of new Ebola outbreaks in various parts of Africa by 2070.

This is because climate change could cause regions that are currently desert to become warmer and wetter, leading to the formation of the lush plants that bats use as a habitat. The movement of bats into these new areas could increase contact between them and humans, increasing the chances of disease spillover, the study found.

A fruit bat (flying fox) in Tissamaharama, Sri Lanka. Credit: paul kennedy / Alamy Stock Photo
A fruit bat (flying fox) in Tissamaharama, Sri Lanka. Credit: paul kennedy / Alamy Stock Photo

Another study found that climate change could enhance the risk of spillover of the Hendra virus, an animal-borne disease that can pass from flying foxes to humans through horses, which are also affected by the virus.

The virus was first identified when an outbreak broke out in Hendra, a suburb in Brisbane, Australia, in 1994. Since then, there have been at least eight separate outbreaks along the coast of northern Australia, according to the WHO. It has a mortality rate of 50-75%.

Recorded Hendra virus outbreaks in Australia. Source: WHO

The research found that climate change could cause the geographic range of flying foxes to expand southwards and further inland. “Spillover events could potentially increase farther south, and inland with climate change,” the authors say.

Elsewhere, a recent preprint – a preliminary study that has not yet completed peer review – suggests that climate change could drive substantial global increases in the passing of novel diseases from mammals to humans by 2070.

Using modelling, the study maps where around 4,000 mammals species and the diseases they carry are likely to move to by 2070. It finds mammals are “predicted to aggregate at high elevations, in biodiversity hotspots, and in areas of high human population density in Asia and Africa, sharing novel viruses between 3,000 and 13,000 times”.

The authors add: “Most projected viral sharing is driven by diverse hyper-reservoirs (rodents and bats) and large-bodied predators (carnivores).”

It will be important for the IPCC to include the emerging evidence of how climate change could affect the passing of diseases from animals to humans in its next major assessment report, currently due for release in 2021-22, says Poertner:

“We expect to include aspects as they become apparent from the literature.”

The scale of the impact of climate change on wildlife is currently second only to the damage caused by human land-use change, including deforestation, other types of habitat loss and human-animal conflict.

In its first major assessment on biodiversity published in May 2019, IPBES reported that humans have “significantly altered” 75% of the land surface and 66% of the global ocean. During 2010-15, 32m hectares of natural or recovering forest were cleared by humans. This area is roughly equal to the size of Italy.

As a result of ongoing pressures on biodiversity, around one million species are currently threatened by extinction within decades, the report concluded.

The report noted that ongoing pressures on wildlife are likely to increase contact between animals and humans, altering the chances of disease spillover. In chapter three of the full report, the authors say:

“Complex links between increased human disturbance, land-use change, habitat loss/degradation and biodiversity loss have all been linked to increases in the prevalence and risk of zoonotic [animal-borne] disease for a variety of pathogens.”

However, research into how biodiversity disturbance could affect animal-borne disease risk at a global level has so far been limited, it notes:

“Causal mechanisms are only well known for a handful of infectious diseases and it is sometimes hard to pick apart the drivers of disease to isolate the direct effects of environmental change from other human actions.”

Research has shown that bushmeat huntingdeforestation and the trade of wildlife at markets can heighten the risk of diseases passing between animals and humans.

In 2018, a study warned of a possible link between deforestation in southeast Asia and a heightened risk of spillover of novel coronaviruses from bats to humans. The authors say:

“Owing to evolving land-use, bat populations are setting up in areas closer to human dwellings…This increases the risk of transmission of viruses through direct contact, domestic animal infection, or contamination by urine or faeces.”

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Q&A: Could climate change and biodiversity loss raise the risk of pandemics?

Daisy Dunne, Carbon Brief, 15 May 2020

Published under a CC license. You are welcome to reproduce unadapted material in full for non-commercial use, credited ‘Carbon Brief’ with a link to the article. 

your money, your life, your choice ・ Harvard invests in water

‘Because we believe its physical products are going to be in increasing demand in the global economy over the coming decades,”

Harvard Management Co., the Harvard University endowment manager, likes the natural-resources asset class.

In a warming planet, few resources will be more affected than water, as droughts, storms and changes in evaporation alter a flow critical for drinking, farming, and industry.

Even though there aren’t many ways to make financial investments in water, investors are starting to place bets.

“Buying arable land with access to it is one way.

“In California’s Central Coast, ‘the best property with the best water will sell for record-breaking prices,’ says JoAnn Wall, a real-estate appraiser specializing in vineyards, ‘and properties without adequate water will suffer in value.'”

The Harvard Management Co. has, since 2012, been buying agricultural land, with rights to sources of water, on California’s Central Coast. The idea was pitched to Harvard by agricultural investment advisory firm Grapevine Capital Partners LLC, founded by Matt Turrentine, formerly of his family’s Central Coast grape-brokerage business, and James Ontiveros, a local vineyard manager.

Harvard’s investing guidelines say respecting local resource rights are of increasing importance ‘in the coming decades as competition for scarce resources, such as arable land and water, intensifies due to increasing global population, climate change, and food consumption.’”

Investors who see agriculture as a proxy for betting on water include Michael Burry, a hedge-fund investor who wager against the U.S. housing market was chronicled in the book and movie ‘The Big Short.’ In a 2015 New York Magazine interview, Mr. Burry was quoted as saying: ‘What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas.'”

In California vineyards, the water-proxy math is compelling. When grapes are harvested, about 75% of their weight is water. Owning vineyards effectively turns water into revenue.”

Kat Taylor, an environmentalist and wife of hedge-fund billionaire and liberal activist Tom Steyer, resigned earlier this year from Harvard’s board of overseers in protest of the endowment’s investments in things such as fossil fuels and water holdings she says threaten the human right to water.

‘It may, in the short run, be about developing vineyard properties,’ she says of Harvard’s California investments. ‘In the long run, it was a claim on water.'”

See:

Harvard Amasses Vineyards – and Water. A bet on climate change in California gives it agricultural land and the rights below it,” Russell Gold, The Wall Street Journal, 11 December 2018

In Drought-Stricken Central California, Harvard Hopes to Turn Water Into Wine,” Eli W. Burnes and William L. Wang, The Harvard Crimson, 13 April 2018

Michael Burry, Real-Life Market Genius From The Big Short, Thinks Another Financial Crisis Is Looming,” Jessica Pressler, New York Magazine, 28 December 2018

your money, your life, your choice ・ the painting that did not sell

The painting that did not sell.

While there may be a well-established “cartel of taste” (see Anna Louie Sussman’s article “Why You Can’t Always Buy a Work of Art Just Because You Have the Cash,” @artsy, 12 December 2018), market stakeholders can and sometimes do display independent judgment.

Gerhard Richter’s “Schädel” (oil on canvas), the first of a series of eight skull paintings painted in 1983, was held in the same collection for 30 years after a last public exhibition in 1988.

Based on a photograph taken by Richter himself, the painting demonstrates a “dialogue between painterly abstraction and photo-realist representation that had been simmering across separate stands of Richter’s practice for nearly two decades.”

This painting led the Post-War and Contemporary Art Evening Sale held at Christie’s London on 4 October 2018.

With an unpublished estimate, the painting was expected to sell for between £12 and £18 million (US$15 – US$23 million).

Bidding reached £11.5 million. The painting was not allowed to change hands.

Note also the instance of Edward Hopper’s 1972 painting, “Portrait of an Artist (Pool with Two Figures)” that sold at Christie’s in New York on 15 November. It closed narrowly, at what may have been a precisely agreed threshold of $80 million – with what appeared to be Christie’s bidding against itself to reach the sales price.

See:

Why You Can’t Always Buy a Work of Art Just Because You Have the Cash,” Anna Louie Sussman, Artsy, 12 December 2018

Seen for the first time in 30 years: Gerhard Richter’s ‘Schädel’ (‘Skull’),” Christie’s

Gerhard Richter ‘Skull’ to Headline Christie’s Sale in London,” Fang Block, Barron’s, 4 September 2018

Rare Richter’s a Bust, but Christie’s Moves $25.9 M. Bacon, $21 M. Fontana at London Sales,” Judd Tully, Artnews, 4 October 2018

 

your money, your life, your choice | California, cars, CO2

California, in so many ways, could learn from the US Northeast. 

To reduce CO2 and and greenhouse gas emissions from cars, a continuing and increasing issue in California and elsewhere, cities need data—ways to accurately measure emissions, pinpoint sources, and monitor change over time; cities need to know how much CO2 they are producing and reducing.

A tool called ACES (Anthropogenic Carbon Emissions System) was developed in response to the requirement for data by researchers at Boston University and Harvard. ACES offers finely-grained maps of CO2 emissions, with a resolution of 1km2, totaled hourly.

As we know, per our atmosphere – the air, its particular mix of gaseous elements, and its temperatures, together vital to life, inclusive of human, animal, and plant – CO2 and other greenhouse gases are an issue, in many ways.

California has “targets” to meet by the year 2020 for limiting the greenhouse gases associated with the driving that people do on a daily basis. The approach to greenhouse gases associated with the driving that people do on a daily basis has a heightened level of complexity in California. Driving a car, rather than availing oneself of public transportation such as a subway, metro, or bus, is a norm that people are highly unwilling and actually afraid to examine and rethink. The many localities within the state have made limited investment in public transportation in significant part because taking such modes of transportation is largely considered to be beneath the dignity – whether personal, social, or professional – of and compromising to anybody with a sense of self esteem.

While the “hope” has been that climate emissions might be curbed largely by promoting regional planning of denser development along transit lines ( S.B. 375, the Sustainable Communities and Climate Protection Act, a landmark 2008 deal, with the California legislature recognizing the critical role of integrated transportation, land use, and housing decisions to meet state climate goals), the California Air Resources Board 2018 Progress Report released in November documents that driving of cars has skyrocketed statewide during the years following the recession of 2008 – 2009 through 2016.

A “key finding of this report is that California is not on track to meet the greenhouse gas reductions expected under SB 375 for 2020, with emissions from statewide passenger vehicle travel per capita increasing and going in the wrong direction” (page 4) and “emissions from the transportation sector continuing to rise despite increases in fuel efficiency and decreases in the carbon content of fuel” (page 5).

Top air quality officials in California state they currently have no way to fully assess whether regions from San Diego to Sacramento are on track to meet 2020 targets for reigning in greenhouse gases associated with daily driving. While “greenhouse gas emissions considered under the SB 375 program reflect carbon-dioxide (CO2) emissions only from light-duty passenger vehicles” (page 21, footnote 22), the California Air Resources Board 2018 Progress Report states, “SB 375 passenger vehicle greenhouse gas emissions reductions cannot be directly measured because greenhouse gas emissions come from many sources” (page 21).

Air board officials said that while they tracked the key metric of vehicle miles traveled, or VMT, available statewide through fuel sales, that same information wasn’t available regionally. Without that, officials say there is no consistent way to extrapolate greenhouse gas emissions from driving for each region.

There’s no unifying way to bring it all together and say ‘You’re at this particular performance metric,’” said Nicole Dolney, chief of the air board’s transportation planning branch. “Our hope was that we would have VMT data that we could rely on, but it wasn’t there.”

So what might California learn from ACES?

For cities to cut down CO2, they need to know how much they are producing and reducing. Most cities get rough estimates with “carbon calculators” that account for the size and population of a city, electricity used, and an estimate of how many cars zip (or crawl) through the city streets.

“The calculation would be fine except for all those cars. Cars are the hardest part of the emissions equation to quantify. They are moving all the time at different speeds, and there are different cars on the road at different times of day.”

“There are other factors to consider. There’s the make of the car, of course: a Toyota Prius gives off less CO2 than a Chevy Silverado. There’s also the speed; most cars give off the least CO2 when cruising in a “sweet spot” between 40 and 60 miles per hour.”

(Conor Gately, co-developer of ACES; PhD, Geography and Environment, Boston University, 2016; lead author on a study examining cities, traffic, and CO2, published in the Proceedings of the National Academy of Sciences (PNAS) in April 2015.)

ACES (Anthropogenic Carbon Emissions System) has been developed by Lucy Hutyra of Boston University and Conor Gately, now a postdoctoral associate working jointly at Boston University and Harvard. A tool for measuring and mapping CO2 emissions, ACES offers finely-grained maps of CO2 emissions, with a resolution of 1km2, totaled hourly, is relevant and could be helpful to the cities and the state of California.

Cities have the political will to change emissions, and they have policy levers to pull,” says Lucy Hutyra, a Boston University College of Arts & Sciences (CAS) associate professor of Earth and environment. And because cities are responsible for 70 percent of greenhouse-gas emissions, according to the United Nations, their actions matter. But to take effective action, cities need data—ways to accurately measure emissions, pinpoint sources, and monitor change over time. And so Hutyra and her colleague Conor Gately have developed a tool called ACES, for Anthropogenic Carbon Emissions System, that offers the finest-grained maps of CO2 emissions in the Northeastern US to date, with a resolution of 1km2, totaled hourly. The tool, funded by NASA’s Carbon Monitoring System and detailed in the October 12, 2017, issue of the Journal of Geophysical Research—Atmospheres, could provide valuable data to cities nationwide.

‘The goal was to take the finest grained, most local data possible and build a ‘bottom-up’ inventory,” says Gately. The research team started by divvying up the sources of emissions on a giant whiteboard. “We did every sector of emissions of CO2,” he says. “Roads, residential buildings, commercial buildings, industrial facilities, power plants, airports, marine ports, shipping, and railway.” The group searched for data from 2011, scouring every source they could find: city and country records, household fuel estimates, EPA databases, hundreds of traffic sensors located around New England. All of these data, when combined with the amount of fossil fuels consumed in the region (gasoline, diesel, home heating oil, coal and natural gas for power generation), allowed the team to calculate CO2 emissions for all of the major sources. The team then calculated emissions for every hour of the year.

Gately, working with a three-year, $1.5 million grant from the National Oceanic and Atmospheric Administration, is now expanding ACES to cover the entire continental United States and meeting with government, scientific, and policy stakeholders to help create a core set of methods and data products.”

DARTE might also be helpful. DARTE, the Database of Road Transportation Emissions (Conor Gately, Lucy Hutyra, Ian Sue Wing) is available for free download from the Harvard Dataverse

Funded by grants from the National Aeronautics and Space Administration (NASA), the National Science Foundation (NSF), and the Department of Energy (DOE), Gately has developed a more precise way to tally CO2 emissions from vehicles. He used 33 years of traffic data to build the Database of Road Transportation Emissions (DARTE), which displays CO2 data for the contiguous US on a finer scale than ever before—a one-kilometer grid. (He hopes to add Alaska and Hawaii later.) Available for free download, DARTE could change the way cities and states measure greenhouse gas emissions.

The science is coming together to bring us very fine measurements in a way never possible before,” says Lucy Hutyra, an assistant professor of earth and environment and a coauthor on the PNAS study. Hutyra says that DARTE complements NASA’s Orbiting Carbon Observatory 2, which is collecting global data on atmospheric carbon dioxide. “We need good bottom-up data to match what we’re measuring looking down from space. That’s what we need to really advance greenhouse gas policies.”

See:

2018 Progress Report: California’s Sustainable Communities and Climate Protection Act,” California Air Resources Board, November 2018

Regions across California likely off the hook for 2020 caps on greenhouse-gas emissions from driving,” Joshua Emerson Smith, The San Diego Union-Tribune, 27 November 2018

Poor forest management: Trump oversimplifies state’s fire problem,” Readers React, The San Diego Union-Tribune, 20 November 2018

A Fine-Tuned Map for CO2,” Barbara Moran, Boston University Research, 26 October 2017

A New Map for Greenhouse Gas,” Barbara Moran, Boston University Research, 10 April 2015

Gately, Conor, K.; Hutyra, Lucy, R.; Sue Wing, Ian, 2015, “Cities, traffic, and CO2: A multi-decadal assessment of trends, drivers, and scaling relationships“, https://doi.org/10.7910/DVN/28999, Harvard Dataverse, V6

 

the compounding costs of California’s year-after-year wildfires

The compounding costs of California’s year-after-year wildfires are making it increasingly difficult for any party to absorb the expenses.

So observes Mark Cooper, Yale PhD, former Yale University and Fulbright Fellow, and Senior Research Fellow for Economic Analysis at the Institute for Energy and the Environment of Vermont Law School currently working on Energy Assessment.

PG&E electrical equipment, including power lines and poles, has been found to be responsible for at least 17 of 21 major Northern California fires of autumn 2017.

While the cause of California’s Camp Fire has not yet been determined, PG&E, one of California’s largest utilities, disclosed to the SEC on 9 November that an outage and damage to a transmission tower were reported in the area shortly before the fire started.

In the SEC Form 8-K of 9 November, PG&E declared that it may face billions of dollars in potential liabilities, far more than its insurance would cover, for the wildfires of 2018.

The Form 8-K reads, in pertinent part:

On November 8, 2018, a wildfire began near the city of Paradise, Butte County, California (the “Camp Fire”), located in the service territory of the Utility.  The California Department of Forestry and Fire Protection’s (“Cal Fire”) Camp Fire Incident Report dated November 13, 2018, 7:00 a.m. Pacific Time (the “incident report”), indicated that the Camp Fire had consumed 125,000 acres and was 30% contained.  Cal Fire estimates in the incident report that the Camp Fire will be fully contained on November 30, 2018.  In the incident report, Cal Fire reported 42 fatalities.  The incident report also indicates the following: structures threatened, 15,500; single residences destroyed, 6,522; single residences damaged, 75; multiple residences destroyed, 85; commercial structures destroyed, 260; commercial structures damaged, 32; and other minor structures destroyed, 772.

The cause of the Camp Fire is under investigation. On November 8, 2018, the Utility submitted an electric incident report to the California Public Utilities Commission (the “CPUC”) indicating that “on November 8, 2018 at approximately 0615 hours, PG&E experienced an outage on the Caribou-Palermo 115 kV Transmission line in Butte County. In the afternoon of November 8, PG&E observed by aerial patrol damage to a transmission tower on the Caribou-Palermo 115 kV Transmission line, approximately one mile north-east of the town of Pulga, in the area of the Camp Fire. This information is preliminary.” Also on November 8, 2018, acting governor Gavin Newsom issued an emergency proclamation for Butte County, due to the effect of the Camp Fire.

As previously reported, during the third quarter of 2018, PG&E Corporation and the Utility renewed their liability insurance coverage for wildfire events in an aggregate amount of approximately $1.4 billion for the period from August 1, 2018 through July 31, 2019. For more information about wildfire insurance and risks associated with wildfires, see PG&E Corporation and the Utility’s quarterly report on Form 10-Q for the quarter ended September 30, 2018.

While the cause of the Camp Fire is still under investigation, if the Utility’s equipment is determined to be the cause, the Utility could be subject to significant liability in excess of insurance coverage that would be expected to have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

United States Securities and Exchange Commission, Form 8-K, filed by PG&E on 9 November 2018

Citigroup estimates that PG&E’s exposure to liability for at least 17 of 21 major Norther California fires that took place in autumn 2017 is $15 billion. Citigroup estimates further that if it is found responsible for the Camp Fire, PG&E could face another $15 billion in claims. This number could rise, the fire is as yet only partially contained.

PG&E’s customers, both business and residential, may find themselves responsible for covering the bill for the company’s liabilities through higher costs.

California state  legislators took steps this year to shield PG&E and the state’s other investor-owned utilities from overwhelming legal claims, allowing them to pass the expense on to ratepayers.

California Senate Bill 901, signed into law on 21 September 2018, applies to fires beginning in 2019, and to some that occurred in 2017.

The bill enables utilities to sell bonds to cover liability costs and pay them off over time through higher rates.

(14) The existing restructuring of the electrical services industry provides for the issuance of rate reduction bonds by the California Infrastructure and Economic Development Bank for the recovery of transition costs, as defined, by electrical corporations. Existing law authorizes the PUC to issue financing orders, to support the issuance of recovery bonds, as defined, by the recovery corporation, as defined, secured by a dedicated rate component, to finance the unamortized balance of the regulatory asset awarded Pacific Gas and Electric Company in PUC Decision 03-12-035.

This bill would, under specific circumstances, authorize the PUC, upon application by an electrical corporation, to issue financing orders to support the issuance of recovery bonds to finance costs, in excess of insurance proceeds, incurred, or that are expected to be incurred, by an electrical corporation, excluding fines and penalties, related to wildfires, as provided.

SB 901, Dodd. Wildfires.

PG&E’s company shares dropped by more than 20 percent yesterday (Wednesday). More than half of its market value has been lost since late last week as the fires have spread.

Shares of other investor-owned utilities in California, Edison International (operated Southern California Edison) and Sempra Energy (owns San Diego Gas and Electric), dropped earlier this week.

California’s power supply is likely not to be at risk. PG&E could face bankruptcy if it cannot cover the liabilities it faces. Such a bankruptcy would eliminate shareholders’ equity and affect bondholder investments.

See:

California Utility Customers May Be on the Hook for Billions in Wildfire Damage,” Ivan Penn and Peter Eavis, The New York Times, 14 November 2018

SEC Form 8-K filed by PG&E, dated 9 November 2018

California Senate Bill No. 901

Amazon selects New York & Arlington, VA for HQ2 ・people, mass transit, sustainability

Amazon has selected New York City (the Long Island City neighborhood of the borough of Queens) and Arlington,Virginia (the Crystal City neighborhood, across the Potomac from Washington, DC) for its HQ2.

In agreements with the local and state governments, Amazon stipulates that the two locations will house at least 25,000 employees each. The new sites will require $5 billion in construction and other investments.

Direct access to rail, train, subway/metro, bus routes (mass transit) at site has been a core preference of Amazon, stipulated in the Amazon HQ2 RFP.

Significantly, Amazon’s HQ2 RFP stipulates that it will develop HQ2 with a dedication to sustainability:

Sustainability: Amazon is committed to sustainability efforts. Amazon’s buildings in its current Seattle campus are sustainable and energy efficient. The buildings’ interiors feature salvaged and locally sourced woods, energy efficient lighting, composting and recycling alternatives as well as public plazas and pockets of green space. Twenty of the buildings in our Seattle campus were built using LEED standards. Additionally, Amazon’s newest buildings use a ‘District Energy’ system that utilizes recycled heat from a nearby non-Amazon data center to heat millions of square feet of office space – a system that is about 4x more efficient than traditional heating. This system is designed to allow Amazon to warm just over 4 million square feet of office space on Amazon’s four-block campus, saving 80 million kilowatt hours over 20 years, or about 4 million kilowatt-hours a year. We also invest in large solar and wind operations and were the largest corporate purchaser of renewable energy in the U.S. in 2016.

Amazon will develop HQ2 with a dedication to sustainability.

Of the cities selected, Emily Badger of The New York Times observes:

Tech companies feed on highly educated and specialized workers, specifically dense clusters of them where workers and companies interacting with one another are more likely to produce new ideas. Washington and New York, as it turns out, are two of the most highly educated regions in the country, with already large pools of tech workers.

Drop a big Amazon headquarters into Washington or New York, and economists expect the 50,000 workers there to be more productive than if the same 50,000 jobs were dropped into Indianapolis. Simply putting them in New York, near so many other tech workers, increases the likelihood that Amazon invents more services, connects to more markets, makes more money.

Those added benefits are so strong, economists say, that it’s worth it to companies like Amazon to pay more — a lot more — for office space and employee salaries in New York City.

‘If you are in the business of making new things — whether it’s a new product, or a new way of delivering things, or a new service — and it’s something that is unique, and it keeps changing and it needs updating, the most important factor of all is human capital,” said Enrico Moretti, an economist at the University of California, Berkeley. “It’s not like making soap, or like making textiles.’”

See:

Amazon HQ2 RFP

Amazon Announces New York and Virginia as HQ2 Picks,” Karen Weise, Technology | The New York Times, 13 November 2018

In Superstar Cities, the Rich Get Richer, and They Get Amazon,” Emily Badger, The New York Times, 7 November 2018

It’s your money ・ Hurricanes, flooding, fires. Buying a home?

It’s your money. ・ Hurricanes, flooding, wildfires. Buying a home? Approach your investment with care and due diligence.

Buying a home involves an enormous amount of money, and few people do it often enough to be experts. Given the realities of climate change, the process is now set against a backdrop of radical uncertainty about the very ground you will live on and the air you will breathe.

Given all that, you owe it to yourself to call on every dispassionate expert you can find and grab all available data on any risk you are taking on.”

There is a case for optimism here, where the world comes together and manages to turn the (rising) tides. So if you are a positive thinker or can afford a big loss, by all means bet one of your biggest assets on that possibility.

Otherwise, ask yourself this: Just how much more science and weather will it take before ever larger numbers of people decide to settle in or retire to places that pose less risk? And once they do, do you want to be trying to unload your property in a danger zone so you can afford to join them?

You’re Buying a Home? Have You Considered Climate Change?”, Ron Lieber, The New York Times, 2 December 2016

Research and understand highly pertinent issues such as those that follow below. Examine flood zones, flood insurance, fire zones, and the term Wildland Urban Interface (WUI, indexes the conversion of wildland to developed territory).

In the context of wildfires, a cornerstone of risk evaluation is a metric called the Wildland Urban Interface, or WUI. WUI indexes the conversion of wildland to developed territory. WUI indicates an explosion in wildland development over recent years.

According to the Wildland Urban Interface (WUI) measurement framework, the conversion rate from wildlands to urban development has grown to 4,000 acres per day or close to 2 million acres per year.

The explosion in WUI development increasingly puts homeowners, firefighters and communities at risk of wildfire – a risk that is only growing across the United States as the globe warms and aridification worsens. Since the 1980s, large fires in Northern California have increased by 60 percent. Some forests in the Pacific Northwest have seen a 5,000 percent increase in annual burned land

According to the  2017 Verisk Wildfire Risk Analysis, more than 2 million of the 4.5 million homes at high or extreme risk of wildfire are in California.

We should start by learning which regions are most at risk. Many people assume that most WUI lands fall in the western states. The large eastern and southern states have the most land in the WUI. In 2016, Kansas and Oklahome saw over a million acres burn – that’s an area bigger than the state of Rhode Island. 

The so-called “fire season” has continued to lengthen over the past several decades, and that, since 2000, climate change has been attributed to adding 9 additional days of high fire season. The environmental context facing designers and developers is thus increasingly risky.

We Should Plan Homes to Minimize the Threat of Wildfires,” Jesse M. Keenan and Alice Hill, Newsweek, 21 October 2017

Services & infrastructure

Sources & uses of municipal services such as flood- and fire-prevention, -recovery, and related maintenance services.

How much does the locality (village, town, county, parish, state) pay for public services such as roads, pumps, fire services, drinking water, sewage, etc. Where does the money come from. 

Sources & uses of flood- and fire-prevention and -recovery service funds

How are flood- and fire-prevention and -recovery services financed and funded. How long will flood- and fire-prevention and -recovery services be affordable. How is “affordable” defined.

Home-purchase finance

If you plan to finance a purchase with a mortgage, examine how banks and insurance companies are currently managing flood- and fire-prone properties in their portfolios. What are the trend lines? What steps are being taken by banks and insurance companies vis a vis such properties to protect their balance sheets over the long term.

Insurance

Examine how insurance companies are managing flood- and fire-prone properties in their portfolios. What are the trend lines? What steps are being taken by insurance companies vis a vis such properties to protect their balance sheets over the long term.

What are current premiums? Is the appropriate insurance provided by private companies, by the government? How much will you receive in case of a disaster? Will you receive the full market value of the damaged property?

Sources & uses of energy

Energy matters. Know sources and uses of energy. A house designed and built for low energy unit intensity offers multiple advantages.

Sources, uses, costs, & quality of water

Water matters. Know sources, uses, costs, and quality of water.

Building materials

Building materials and construction matter. Know how and of what materials the house is constructed. Is the house built for fire resilience? Is the house built for flood resilience?

Access & transportation infrastructure

Access matters. How is the neighborhood served by transportation. Can you get to work / school / the doctor’s and dentist’s office / the grocery store and shops / all those important places by foot, bike, bus, train? Must you drive a car? (Think of the CO2 emissions that are exacerbating both the floods and the fires.) Are there multiple lines of access? One road?

Climate change

Research climate change and its effects in your geographical area of interest.

A team & teamwork matter

Develop a team of experts, whom you can trust and consult and with whom you can work together, in your geographical area of interest.

As you delve into these questions, here are links to articles, and there are many more, that provide information, insight, perspective and links to further sources of information.

See:

You’re Buying a Home? Have You Considered Climate Change?”, Ron Lieber, Your Money | The New York Times, 2 December 2016

Flooding Risk Knocks $7 Billion Off Home Values, Study Finds,” Laura Kusisto, The Wall Street Journal, 25 August 2018

Your coastal property has already lost value to sea rise. This site can tell you how much”, Alex Harris, Miami Herald, 25 July 2018

Fire Weather Outlooks (updated daily), NOAA’s National Weather Service Storm Prediction Center, Fire Weather Outlooks

Why does California have so many wildfires?”, Kendra Pierre-Louis, The New York Times, 9 November 2018

Forced Out by Deadly Fires, Then Trapped in Traffic,” Jack Nicas, Thomas Fuller, Tim Arango, The New York Times, 11 November 2018

Jesse M. Keenan in Newsweek: time is now to evaluate design risk, enhance resilience against wildfires,” Travis Dagenais, Harvard University Graduate School of Design, 24 October 2017

We Should Plan Homes to Minimize the Threat of Wildfires,” Jesse M. Keenan and Alice Hill, Newsweek, 21 October 2017

North Carolina, Warned of Rising Seas, Chose to Favor Development,” John Schwartz and Richard Fausset, The New York Times, 12 September 2018

Perils of Climate Change Could Swamp Coastal Real Estate,” Ian Urbina, The New York Times, 24 November 2016

Underwater. Rising Seas, Chronic Floods, and the Implications for US Coastal Real Estate,” Union of Concerned Scientists, 2018

Del Mar stands firm against ‘planned retreat”, Phil Diehl, The San Diego Union-Tribune, 22 May 2018

Can Miami Beach survive global warming?”, David Kamp, Vanity Fair, 10 November 2015

Rising seas, distressed communities, and ‘climate gentrification’: Jesse M. Keenan talks Miami in Vice, Scientific American,” Travis Dagenais, Harvard University Graduate School of Design, 14 August 2017

California Today: Now Comes the Insurance Challenge,” Mike McPhate, The New York Times, 11 October 2017

Climate change and commercial real estate: How resilient is your portfolio?” Jeffrey Kanne, Carlos Madex-Madani, Sam Bendix, Institutional Real Estate, Inc., 1 June 2017

Settling post-catastrophe insurance claims: What agents should know,” Bernice Ross, Inman, 5 September 2017

High Ground Is Becoming Hot Property as Sea Level Rises,” Erika Bolstad, Scientific American, 1 May 2017

Wildland-Urban Interface: Key Issues,” L. Annie Hermansen-Báez, Jennifer Seitz, and Martha C. Monroe, Joint product of InterfaceSouth of the Centers for Urban and Interface Forestry, Southern Research Station, U.S. Forest Service and the University of Florida, Institute of Food and Agricultural Sciences (IFAS). Published March 2009.

Key findings from the 2017 Verisk wildfire risk analysis,” Arindam Samanta, Verisk, 12 July 2017

The Wildland-Urban Interface in the United States,” Susan I. Stewart, Northern Research Station, USDA Forest Service, Evanston, IL (sistewart@fs.fed.us), Volker C. Radeloff, Department of Forestry, University of Wisconsin-Madison, Roger B. Hammer, Department of Sociology, Oregon State University

collections care & engineered resilience

As the markets for works of art, collections care, and engineered resilience in the built environment (private collections, museums – public and private, galleries, fairs, corporate and university collections, etc.) converge, renewable energy will be a factor.

“Underlying property increases in value by virtue of the fact that positive externalities associated with the performance of the resilience investments represents a superior outcome to the status quo – even when netted out by any costs.” (Keenan et.al.)

Companies have signed long-term contracts to purchase solar and wind energy in 28 markets.

Cost declines and efficiency improvements are making renewables cost-competitive with wholesale power prices of more traditional sources of electricity.

While larger corporations are entering into corporate power purchase agreements (PPA),

smaller companies are increasingly pooling electricity demand together to access economies of scale achieved through solar and wind projects.

This is called “aggregation.”

“Aggregation” might be a workable model for entities in the art market concerned about the long-term resilience of structures and care and value of works and collections.


See: 1) Jesse M. Keenan, Thomas Hill, Anurag Gumber, “Climate Gentrification: From Theory to Empiricism in Miami-Dade County,” IOPScience, 23 April 2018; 2) “Corporations Already Purchased Record Clean Energy Volumes in 2018, and It’s Not an Anomaly,” Bloomberg New Energy Finance, 9 August 2018

 

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