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January 08 2014

18:38

NY Governor Launches $17B Plan to Enhance Resiliency to Extreme Weather

Hammered by an unprecedented nine federally declared disasters since he took office three years ago and with much of the state now frozen solid as a result of the southward drifting polar vortex, New York Governor Andrew Cuomo unveiled details of a far reaching rebuilding plan that aims to enhance New York state’s resiliency to climate change and its emergency preparedness.

Dubbed “Reimagining New York for a New Reality,” the $17 billion plan will see the state invest a wide range of projects “that will transform New York’s infrastructure, transportation networks, energy supply, coastal protection, weather warning system and emergency management system to better protect New Yorkers from future extreme weather,” the governor’s office explained in a press release.

Credit: New York State Office of the Governor

Extreme weather is “The New Reality”

Along with its own funds, the state government is putting federal disaster funds granted in response to 2012′s Superstorm Sandy and 2011′s Hurricane Irene and Tropical Storm Lee to work to implement the far reaching plan to enhance New York’s climate change resiliency and emergency preparedness. Its key aspects include:

  • Building the most advanced weather detection system in the nation, with 125 interconnected weather stations to provide real-time warnings of local extreme weather and flood conditions;
  • Launching the nation’s first College of Emergency Preparedness, Homeland Security, and Cybersecurity;
  • Replacing and repairing 104 older bridges at risk due to increasing flooding;
  • Implementing the largest reconstruction of the state’s transit system in 110 years with $5 billion of federal funds;
  • Creating a statewide Strategic Fuel Reserve, and statewide gas station back-up power on critical routes throughout the state;
  • Hardening the state’s electric grid and creating 10 “microgrids” (independent community-based electric distribution systems);
  • Building new natural infrastructure to protect the New York’s coastline, and provide advanced flood control for inland waterways;
  • Training a new Citizen First Responder Corps to make New York residents the best prepared in the nation to deal with emergencies and disasters; and
  • Expanding the $650 million NY Rising Community Reconstruction program to allow 124 communities around the state to create their own individualized storm resilience plans.
  • Issuing special license plates for first responders

Avoiding climate change catastrophe

Besides enhancing New York’s emergency preparedness and climate change resiliency, carrying out the $17 billion plan is sure to provide the state economy with a big, much needed, economic boost.

Unveiling the strategic plan at a press conference in Albany, the state capitol, Governor Cuomo highlighted the new reality of more frequent extreme weather events and recounted the unprecedented disruption and devastation that resulted, both downstate, in and around New York City, as well as across the length and breadth of upstate New York.

Of the one-year process that resulted in creation of the plan, the governor stated,

“This was a special challenge for us, because it called for us to literally reimagine the state in light of what we went through with Hurricane Sandy, Superstorm Sandy, storms Irene and Lee, and taking those lessons, and taking really that trauma, and reshaping our vision of New York through that experience. We call it ‘Reimagining New York’ because we are now facing a new reality after what we went through.”

 

“Extreme weather is the new reality, like it or not. What caused it is a separate discussion for a separate day, but the reality is extreme weather and we have to deal with it.”

The governor also acknowledged that the plan couldn’t have come to fruition without extraordinary support and assistance from the Obama Administration and federal government, as well as local leaders throughout New York State.

Joining Governor Cuomo at the press conference, Vice President Joe Biden praised the plan and Governor Cuomo. “Governor, I am delighted to be able to be here with you today,” the vice president began.

“I think you rebuilding New York, reimagining a future is exactly what we have to do in this country. And once again, in the tradition of this state and the tradition of Andrew Cuomo, you’re leading. You’re not just leading in New York, you’re leading the country. And I think a lot of governors and a lot of folks can learn an awful lot from what they see and what you do here.”

For more on this, check out the Office of the Governor’s press release or watch the press conference below:

Image credit: New York State Office of the Governor

The post NY Governor Launches $17B Plan to Enhance Resiliency to Extreme Weather appeared first on Global Warming is Real.

July 16 2013

16:31

Study Shows Growth in Climate-Themed Bonds

“Bonds and Climate Change: The State of the Market in 2013,” HSBC Climate Change Centre of Excellence, Climate Bond Initiative

Climate change adaptation is a core aspect of President Obama’s National Climate Change Action Plan. Developing the institutional framework and cost-effective private-sector financial mechanisms to stimulate and leverage public policies and programs remains a key hurdle that needs to be surmounted if the aims of the President’s national strategy are to be realized, however.

Continuing a pioneering effort to monitor and assess “green” infrastructure financing and investments, the HSBC Climate Change Centre of Excellence commissioned and the Climate Bond Initiative produced, “Bonds and Climate Change: The State of the Market in 2013.” The number of climate-themed bonds outstanding nearly doubled in 2013, researchers found, reaching some $346 billion.

Bonds for climate change adaptation

Focusing on seven climate themes – Transport, Energy, Climate Finance, Agriculture & Forestry, Waste & Pollution Control, and Water – the study corresponds “to our view of the emerging low-carbon, climate-resilient economy,” the study partners state. “It is designed to ring-fence goods and services that enable the transition to low-carbon growth that is also resilient to the impacts of a changing climate.”

Climate Bond Initiative used the seven climate change themes to screen the use of proceeds of bonds issued in markets worldwide and “arrive at a universe that is 100% aligned with the low-carbon, climate-resilient economy.”

Researchers found climate change bonds were issued by corporations, financial institutions, municipalities, state-backed entities and project special purpose vehicles (SPVs). A second level of filters entailed verifying their selection using Bloomberg descriptions and revenue breakdowns “cross-checked with company disclosures and other market sources to confirm alignment with climate themes,” the report authors explain.

According to the report’s authors,

“Our updated 2013 estimate has reiterated the perception that the climate-themed bond market is not niche, lacking scale or liquidity.”

Ultimately screening over 10,000 bonds from 2,300 issuers, 1,200 from 260 issuers with a total outstanding principal of $346 billion qualified across all seven climate themes. That’s just shy of double – 99 percent higher – than the $174 billion estimate of the amount outstanding in 2012.

“Bonds and Climate Change: The State of the Market in 2013,” HSBC Climate Change Centre of Excellence, Climate Bond Initiative

“Bonds and Climate Change: The State of the Market in 2013,” HSBC Climate Change Centre of Excellence, Climate Bond Initiative

With a total $263 billion in climate bonds outstanding, the Transport sector accounted for the large majority, just over 70 percent. Climate bonds outstanding for the Energy ($41 billion) and Finance sectors ($32 billion) ranked second and third, respectively.

The Climate Bonds Initiative expects institutional investors – pension funds, insurers, etc. – will expand the range of criteria used to expand the range of climate-theme bonds they invest in. Two factors will add momentum and fuel growing investment in climate-theme bonds, they say: 1) growing focus on implementation of environmental, social and governance goals of the Principles for Responsible Investment (PRI) to fixed income portfolios, and 2) the need for institutional investors to adjust their portfolios in light of the expected advent of a 2015 international climate accord.

More than 1,000 companies representing some $32 trillion in assets under management have signed the PRI. Meanwhile, some “$22 trillion of assets under management fall undr the Global Investor Coalition on Climate Change that issues regular policy statements outlining investor requirements on international and national climate policy,” the report authors point out.

The post Study Shows Growth in Climate-Themed Bonds appeared first on Global Warming is Real.

January 12 2012

18:46

Climate Change a Growing Factor in Pension Funds’ Strategic Asset Management Allocation


Climate change is becoming a key, high-level factor in the strategic asset allocation and risk management decisions of a growing number of the world’s institutional investment organizations, a group that includes the world’s largest pension funds.

More than half of 14 “asset owner partners” participating in the Mercer Group’s “Climate Change Scenarios – Implications for Strategic Asset Allocation” now include climate change considerations in future risk management and/or strategic asset allocation decisions- including Calpers (California Public Employees Retirement System), the largest pension fund in the US.

Moving into a third year, Mercer is leading a global collaborative effort to develop a strategic risk management and asset allocation framework that institutional investors can use to evaluate the risks and opportunities global climate change presents for their portfolios, retirees and investors.

“Collectively, large pension and sovereign funds (and other asset owners) have the power (and perhaps the resources) to determine objectives, fund vehicles and structure deals. Potentially, they may also have the capacity to create new entities to effectively deploy assets as necessary to fund (and profit from) a transition to a lower carbon economy,” write the authors of a project update report released January 12.

Assessing Climate Change Impact on Investments: Mercer’s TIP Framework

Mercer has developed the three-point TIP framework to represent and assess the impacts of climate change on asset class returns.

  • ‘T’ for Technology: Investments in carbon efficient technologies could accumulate to $3 trillion – $5 trillion by 2030
  • ‘I’ for Impacts: Costs of physical damage could accumulate to $4 trillion by 2030
  • ‘P’ is for Policy: Costs of delayed, uncoordinated policy could accumulate to $8 trillion by 2030.

In addition to the three TIP factors, fundamental economic factors (economic cycle inflation) and market factors (ERP, for Energy Resource Price, Volatility) are key elements of Mercer’s climate change asset allocation and risk management framework.

Climate Change Scenarios for Asset Allocation, Risk Management

In its latest project report update, Mercer analysts developed four climate change scenarios as a means “of understanding how asset classes may respond to the TIP factors under different conditions.” The four scenarios – Regional Divergence, Delayed Action, Stern Action and Climate Breakdown – were developed to indicate how climate change “might have an impact on a portfolio’s asset mix from now until 2030.”

Using the TIP model and four scenarios to look a little more closely at each of these three key factors, Mercer finds that the value of additional investments in technology assets (T) will grow between $180 billion to $260 billion per year for all climate mitigation scenarios.

Regarding the impacts of climate change on investment portfolios (I), the costs range in the order of $70 billion to $80 billion per year in terms of adaptation and residual damage costs. In terms of climate policy (P), the increase in the cost of emissions from 2010-2030 ranges between $130 billion and $400 billion per annum, with costs highest under the model’s “Delayed Action” scenario.

As Mercer has clearly recognized, mitigating and adapting to the risks associated with worldwide
climate change requires comprehensive action on a global scale. The active engagement of private sector investment and investors is critical. Among the largest investment organizations in the world, the participation of pension funds and other institutional investors is likewise critical to making the transition to a more sustainable and clean energy economy.

The resources and research challenges required to realize the project’s objectives are enormous and virtually unprecedented. It’s going to require consistent, coordinated, broad-based collaborative working relationships between supra-national and national government agencies, investor and industry participants and associations, and other stakeholders in order to carry out. The Mercer Group’s groundbreaking Climate Program makes for an excellent, if belated, start.

“It will be no small task to accomplish this across regions, market segments and asset classes, but the stage has been set through membership organizations and established intermediaries to explore alternative investment structures, outsourcing opportunities and agreements on requirements. Focus should be put on developing these solutions and the associated deployment of assets – as a priority,” the authors of latest project update report wrote.

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