Equilibrium/Sustainability — Presented by NextEra Energy — Melting cables cancel streetcar service

Today is Tuesday!  Welcome to Equilibrium, a newsletter that tracks the growing global battle over the future of sustainability. Subscribe here: digital-stage.thehill.com/newsletter-signup. 

Temperatures in the Pacific Northwest climbed so high over the past few days that melting cables prompted a suspension of streetcar service in Portland, while southbound lanes began to buckle on Interstate 5 in Seattle. 

At local retailers, residents cleared out air conditioner supplies as they scrambled to escape the life-threatening conditions caused by the triple-digit heat dome, according to CBS Evening News.

Farther south in Palm Springs, Calif., which CBS described as “accustomed to searing heat,” a 55-year-old man died after sunbathing for more than an hour in 119-degree heat on Monday, CBS reported.

(From us at Equilibrium, we beg you: please, please don’t do this. It can be deadly out there, but in sufficiently dry places, you can’t always feel the danger before it’s too late.)

Monday’s temperatures may have “shocked meteorologists and climate scientists alike,” but some spots are still climbing: Lytton, British Columbia, for example, is expected to hit 120 degrees or higher on Tuesday, Andrew Freedman reported for Axios.

While unprecedented heat continues to challenge the Pacific Northwest, we’ll turn our attention to the opposite corner of the country — south Florida — where we’ll explore whether climate change may have played a role in the devastating condo collapse. Then we’ll hear from California’s attorney general about why companies need to disclose environmental and social risk and impact to their investors. 

Finally, since we’ve decided it’s Tree Tuesday, we will bring you a flurry of forestry news. 

For Equilibrium, we are Saul Elbein and Sharon Udasin. Please send tips or comments to Saul at selbein@digital-stage.thehill.com or Sharon at sudasin@digital-stage.thehill.com. Follow us on Twitter: @saul_elbein and @sharonudasin. 

Let’s get to it.

A MESSAGE FROM NEXTERA ENERGY

As the world’s largest producer of wind and solar energy, NextEra Energy is pioneering innovation on green hydrogen – the solution for deep decarbonization of hard-to-abate sectors. See how at NextEraEnergy.com.

Whether climate was directly responsible, Surfside was a bad omen

Scientists are weighing whether climate change played a demonstrable role in last week’s Surfside, Fla., condo collapse, in which at least 11 people died and another 150 remained missing as of Tuesday.

While experts agreed that it was too soon to answer the climate question, investigators will be looking into the root cause of the collapse over the next few months. 

As they do, they’ll be considering climate-related factors like the corrosive impact of rising sea levels and salty floods — as well as other variables that have little connection to global warming, Chelsea Harvey reported for E&E News.

Warning signs: Reports surfaced Monday that the condo board’s president was aware the deterioration of the building’s concrete was “accelerating” and the condition of the basement garage had “gotten significantly worse,” according to an April letter obtained by USA Today.

The president discussed necessary structural repairs, while noting that in fall 2018, an inspection found a “major error” in the design of the building and predicted that failure to ameliorate the issues would “cause the extent of the concrete deterioration to expand exponentially,” Kyle Bagenstose and Romina Ruiz-Goiriena reported.

But the estimated $7 million cost of conducting the repairs ultimately led to disputes among the condo board’s members, a resident told USA Today, and no repairs were made. 

Sinking in the sand: Media reports over the past few days also explored how the land beneath the complex sank at a rate of 2 millimeters per year throughout the 1990s, the E&E report said, citing a 2020 Ocean & Coastal Management study.

This sinking process, known as “subsidence,” is common in many coastal areas, particularly in areas like Surfside built atop filled-in wetlands, according to E&E. But subsidence doesn’t usually cause a building’s abrupt collapse.

Timothy Dixon, a geologist at the University of South Florida, told E&E that subsidence poses the gravest danger when different parts of the building sink at different rates. But it was unclear to what extent that applied to this case.

OBSERVERS SEE WARNING SIGNS FOR INFRASTRUCTURE

Questions that “could not be contained”: Although it may be months before investigators come to a definitive conclusion about the collapse, “the rationalization of the Surfside building collapse got off to a fast start,” John Morales, an atmospheric scientist and weathercaster in south Florida, warned in a piece for the Bulletin of the Atomic Scientists. 

Morales described the tower’s foundation as “set upon sand and silt,” while also citing a former maintenance chief’s observation of frequent 1- to 2-foot saltwater floods in the building’s garage.

Morales acknowledged the dangers of speculation, but he stressed that “in a coastal megalopolis lined with towering condominiums … questions of how a 12-story tower built in the 1980s could simply crumble could not be contained.”

Coastal infrastructure at risk: Although experts still don’t know if they can hold climate responsible for the Florida collapse, there is a broad consensus that such shifts — like subsidence, increased flooding and sea-level rise — do threaten the integrity of coastal infrastructure, the E&E report stressed. 

Tidal flooding events, Morales added, have been commonplace for years, and climate scientists have long been forecasting that the sea level is rising due to thermal expansion of the oceans, along with melting glaciers and ice caps.

Takeaway: Policymakers could start by mandating more frequent inspections for buildings on land sensitive to climate change, wrote Susan Matthews, news director of Slate. Surfside, she wrote, drove home “about how climate change might exacerbate some of the very factors we might otherwise chalk up to ‘structural integrity.’”  

“There is a sense from local officials that they are doing their absolute best to make sure that people don’t feel panicked,” Matthews wrote. “But I think we know enough right now to say that there is a material and physical crisis facing buildings in Miami. We know that we should feel more urgency to do something about the problem facing the people who live there.”

A MESSAGE FROM NEXTERA ENERGY

We’re pioneering innovation on green hydrogen – the solution for deep decarbonization of hard-to-abate sectors. See how it can create jobs, accelerate economic growth and more at NextEraEnergy.com.

California AG to SEC: Don’t let public companies keep investors ‘in the dark’ about climate

 

California Attorney General Rob Bonta wants the Securities and Exchange Commission (SEC) to “use its power” to make companies investigate and disclose their impact on, and risk from, climate change.

Such transparency is a key component of the environmental, social and governance (ESG) metrics that investors and state regulators are trying to hash out. While ESG tends to be used interchangeably with climate-conscious or socially responsible investing, reporting requirements are inconsistent among U.S. firms. This is something Bonta is hoping to see change. And just last week, the SEC finished accepting public comments on how and when it might begin setting some standards, Bob Pisani reported Wednesday for CNBC. 

Making ESG concrete: Because the attorney general realizes that ESG issues can be abstract, he took some time to help Equilibrium “make it concrete.”

Imagine parents “pinching their pennies” to put in an investment fund to send their kid to college, Bonta suggested. 

Except, we live in a world with no mandatory climate disclosure. “So, they could have their money in a set of investments that, unbeknownst to them, have massive risk because of the spread of extreme weather events,” Bonta said. 

“And if that’s not being told to them — they could lose their investment,” he continued. 

“They should know exactly what the risk is of their investment before they make the determination of where they want to put their money.” 

On June 14, Bonta joined 12 other Democratic attorneys general in sending a letter (PDF) to the SEC requesting “comparable, specific, and mandatory climate-related disclosures” from publicly traded companies.

“Climate change is not a distant problem to be dealt with in the future,” the attorneys general opened their letter. “It is here, and it threatens the U.S. economy and its financial system.”

“This is pretty straightforward,” Bonta told Equilibrium. When you make an investment, you want to know what the real risk is. You don’t want it to be kept in the dark.

“You don’t want someone to fail to tell you about a risk to your investment — and then later, only when you’ve lost your money, do you find out that there was a risk that was never told to you. 

“So, we’ve urged the SEC to require corporations to provide that disclosure,” he said.

ATTORNEYS GENERAL DEMAND ‘A LEVEL PLAYING FIELD’

Picking winners and losers? When the House passed the ESG Disclosure Act on June 16 by a hair’s breadth of 215-214, Republicans proclaimed that it was an attempt at market manipulation to direct capital away from fossil fuels.

Rep. French Hill (R-Ark.) said it was a bid to “name and shame” companies, Roll Call reported, while the conservative Cato Institute called it an attempt to “pick ‘winners’ and ‘losers’ ” in its comments to the SEC.

“I fundamentally disagree,” Bonta told Equilibrium. “This is a straight up, uniform application to all companies. Companies that are stewarding their assets in a responsible way, and insulating them, or taking steps to protect them from the financial risk, the threat of climate change — then [they should] say so.”

Those that don’t, he added, “should say so, too.” 

Only with all of this information at their fingertips, Bonta explained, should investors then decide “what appetite for risk that they have.” 

Is disclosure necessary? Conservatives such as Elad Roisman, whom former President Trump appointed to the SEC, argue that there is no need for a special disclosure requirement, as the commissioner told the ESG Board Forum in early June. If climate risk and impact are “material” to an investment, they contend, companies should already be requiring them. 

But Bonta maintained that companies are not already providing such disclosures — making a disclosure obligation all the more critical.

“If you think it’s already required,” Bonta said, “let’s make it clear, and be specific.” 

Takeaway: The mainstream view in financial regulation is coalescing around the position that the SEC can require climate risk disclosure — whether it’s material or not, as Commissioner Allison Herren Lee explained in May, according to the SEC.

But the move by the attorneys general puts additional pressure on the agency, and it now seems fairly clear that the SEC is going to take some action on ESG — an issue that SEC Chairman Gary Gensler has repeatedly signaled interest in.

The question is, what would an SEC disclosure initiative look like, and will it get the additional coverage from Congress that could help it survive a Republican administration?

ROUND-UP

Tree Tuesday

We offer you a fair balance of the depressing and inspiring: Two items on dead trees; two items on live trees. 

Trees are dying of thirst in Western drought conditions

• The prolonged droughts and extreme heat waves baking the Western U.S. are killing the region’s native trees — those most suited to the local climate, scientists Daniel Johnson and Raquel Partelli Feltrin reported for The Conversation 
• Trees survive by transporting water from their roots to their leaves through small cylindrical conduits, but as moisture begins to decline, air bubbles can form in the vascular systems of the plants, creating embolisms that block water flow, the scientists explained. “If a tree can’t get water to its leaves, it can’t survive,” Johnson and Partelli Feltrin wrote.
• Water stress has contributed to the die-off of as many as 30 percent of junipers in central and northern Arizona. Meanwhile, more than 129 million trees have died as a result of severe drought in California in the past decade — leaving flammable dry wood in their stead, Johnson and Partelli Feltrin wrote.
• While the long-term impact of changing drought and fire regimes on forests remains unclear, the scientists said there has been some evidence of transition from forests to shrublands in parts of the Western U.S.

Deforestation in the mountains of Southeast Asia accelerating

• Half of the tropical mountain forests are spread across the islands and peninsulas of Southeast Asia — forests that store far more carbon than the lowlands below, and whose relative inaccessibility protected them during the 20th century.
• But with farmland largely claimed in the lowlands, deforestation is moving uphill at a precipitous rate, Carolyn Cowan reported in Mongabay.
• According to a Nature Sustainability study published Monday, 73,000 square miles of forest across the region’s 11 nations — an area the size of North Dakota — was converted to cropland, much of it for palm oil and other plantation crops.
• This loss of forest resulted in the release of an additional 140 million metric tons of carbon per year, Cowan reported — carbon that the Intergovernmental Panel on Climate Change had predicted would stay locked up in trees. 
• That means our climate budgets may well be overly optimistic, the study authors said.

Brazilian community shows how to farm sustainably in the Amazon

• Near the frontier town of Nova Califórnia, in a remote corner of northwestern Brazil, farmers are cultivating man-made forests replete with Brazil nut trees — thanks to a local agroforestry cooperative called RECA, which shows how agriculture in the Amazon can occur in a sustainable manner, according to National Geographic.
• The cooperative has made planting the trees economically viable, Brian Barth and Flávia Milhorance reported. Agroforestry requires much less land than cattle to make a living, while helping take the pressure off the rainforest that remains in the Amazon, the writers explained.
• RECA’s farmers attempt to “approximate” the natural rainforest ecosystem, creating “rainforest parcels” with up to 40 species. 
•  The co-op then processes about a dozen of these species into food products to market throughout Brazil, including fruit juices, palm hearts, oils and medicinal plants, National Geographic reported.

‘Transparency will add value’ for deforestation-free beef, Brazil minister says

• The Amazon state of Pará has 2 1/2 times as many cattle as people — and the fastest deforestation rate in Brazil, Sam Cowie reported for the Financial Times. That’s no coincidence, as cattle raised on illegally deforested plots are fed back into the legal cattle market, in a process called “cattle laundering.”
• But a digital platform called SeloVerde (Green Seal) “lets buyers know if the cattle they are being sold have been raised on illegally deforested land, or on farms that have unpaid environmental fines, or involvement in crimes such as slave labour,” Cowie wrote. 
• Or, in other words, an even spread of ESG factors — deforestation as environmental, slave labor as social and unpaid taxes as governance.
• The promise here is that ranchers who don’t deforest can charge extra, Mauro O’ de Almeida, Pará’s environment secretary, told the FT.

{mosads}About that last one: People are often confused by ESG. Why do those three factors go together, and what do investors want to know about them? 

Later this week, we’ll travel to the Amazon, where environmental, social and governance turn out to be all tied together — and where investors want to see payments from funds eager to get ESG returns to go to communities holding the line against deforestation.

Also, The Hill has a couple of virtual sustainability events taking place Wednesday. Tune in at 1 p.m. ET for a national summit on ESG and corporate responsibility in America and at 3:15 p.m. ET for an event that delves into the road to zero-emission trucks. 

This is Equilibrium. See more sustainability content at The Hill by clicking here. We’ll see you Wednesday evening.