Transcripts For CSPAN2 Briefing On Global Commissions Climate Change Report 20240713

There are issues about what we can do to help communities at high risk with relocation. What we can do to support communities that will be on the receiving end, they will need Financial Support as well. With that i will conclude those are some of the key ways in which i see the report we put out in september translating into the us context, thank you. I think youre absolutely right. Its very clear that awareness at the city, state and tribal level has been increasing. Mayors are on the front line of responding to all these extreme events and if you look at the burgeoning of resilience officers, the urban resilience network, there is a hunger for best practices, more data and to be able to share things with each other quickly. Our last speaker is Leonardo Martinez diaz and he directs the Sustainable Finance center at the resources institute. Previously we all worked at the department of treasury, Deputy Assistant secretary for energy and environment, he also worked on climate finance in that capacity but also international negotiations. He has held many other positions at the imf, at the world bank, at usaid and served on the board of the Green Climate fund. We know him as the author of the financing adaptation chapter. It is great to be here with so many colleagues and folks who have really spent a lot of time contributing to this issue. I want to focus on the private sector. My colleagues have been clear about showing you the challenges and opportunities for the Public Sector but now lets think about the part of the economy that is a huge amount of Small Enterprises as well as large corporations which was climate going to do to them and how can they prepare and take action . As it was clear from the comments you heard today companies will be affected by these impacts. Already it has become clear these impacts are affecting the bottom line, affecting business operations, affecting business facilities. Let me give you a couple examples, the food giant is very aware Climate Change is beginning to affect how and where consumers and key commodities going to its product we all know and love. They have to start thinking about where to begin to sort these things in the future as crop yields are affected. Think about bloomberg, the giant Global Financial data company that during Hurricane Sandy had servers in the basement and came within inches of getting hit by water wiping out the entire operation of its company. Think about our airlines which are increasingly concerned about the ability of their planes to take off in extremely hot weather which would mean delays and losses that way. Report operators and shipping lines are concerned what happens when port facilities and warehouses and railroads and so im get flooded and become inoperative. It is clear that business gets it at least large corporations are keenly aware of the impact. They dont call it climate risk, they call it Business Continuity risk, supply chain risk but in the end that is what it is and they are beginning many cases quietly but very carefully to plan. And it is crucial the government at the federal level and beyond begin to help facilitate and encourage the private sector to take action. Let me move to a very powerful tool that could help us do that and that is the Capital Market. The us built this incredible apparatus, Capital Market and stock market, the biggest in the world and importantly they are trusted by investors all around the world and that makes these markets so powerful and the reason they are trusted is they are transparent, thanks to reforms that go all the way back to the period after the great depression. The securities and Exchange Commission requires all private and listed companies to tell the investors anything that could be material, that is to say would impact the value of security in this case should that be known. And as a result the information investors can use about buying and selling security. So the question then, is Climate Change, climate impact, should Companies Report these 2 investors . Before that it wasnt clear that should be the case. I remember having a conversation with a Us Bank Regulator in the hallway of the treasury where we should start thinking about the reality of climate risk and she said look, if it was Material Companies would be reporting it and because they are not reporting it is not material. It is a circular argument that is going to get into real trouble because you could argue companies have been dealing with risk of different types all along. They had experienced hurricanes, floods but for the reasons my colleagues have laid out this type of risk is now significantly new kind of risk in the sense youre dealing with higher frequency and severity of events with cascading risks that cannot be as easily predicted. What has been the approach to try to encourage Capital Markets to get folks to think about climate risk. Some years ago there is a speech by the governor of the bank of england who said what we should do is get companies to disclose Climate Risks, get companies to explain to us, the investigators, regulators and consumers how they are taking these risks into account, how are they identifying the risks and what do they do with the risks when they find them and identify them and what exactly do they have planned in order to cope with this major challenge and as that becomes quantified and disclosed it becomes known to the consumers and investors and incorporated into the buying and selling of security and is priced, the risk becomes visible and then the prices begin to work their magic if you will, the companies that take climate risk seriously, putting in place credible strategies will be rewarded by the market with lower cost and those that are bearing their heads in the sand will find themselves punished by the market because the market will say you are taking risks that are reckless and we are not going to invest. That is the theory and the question is what happens now, how do we put that into play and let me tell the story of one Major Initiative proposed by the name the task force on climate related financial disclosure. Too many of us that is like the air we breathe but in the real world it is still a very obscure group. It is the privatesector led voluntary groups that had the lesson of regulators from the us and put together some recommendations that were pretty common sense, they tried to advise companies about how they should disclose this type of risk and how they should do it, what types of categories they should consider. Those recommendations went out in 2017 and were endorsed by hundreds of Companies Including Many Us Companies and the question became how do you actually do this . How do you make it granular and put it into your reports for the sec or other investors and the bottom line is it is not going well. Right now there was a status report in the summer basically of over 1000 companies that were studied, 25 are actually reporting aligned with 5 of the 11 recommended disclosures and only 4 of the thousand or so companies are disclosing aligned with at least 10 of the 11 disclosures. In other words it is going slowly, perhaps too slowly given we have a real time constraint. We should not cast too much blame in the sense this is not easy and is relatively short timing. It is hard to quantify these risks as christina said you have to model things, theres uncertainty involved, getting the right data, making it compelling, making sure youre getting things right is difficult and theres something called the first mover disadvantage as well. A lot of companies are concerned that if they go out there with their Climate Risks and are transparent about them but their competitors dont they will be at a disadvantage, they will proceed to be more risky than somebody else who stayed quiet about the risk. As one banker told me once if i were a company today i would be secretly preparing for climate risk while denying it in public. Not recommending you do that but that is the perception and thats going to be the problem with a voluntary system of disclosure, those that feel they are doing things right are more biased towards disclosing and those with more risk may not want to disclose anything so that is probably holding back this project. What can we do now. What can we do next to address these things . There are three things, the Climate Risk Disclosure act of 2019, by senator warren and counterpart in the house would direct the sec to issue rules that require every Public Company to disclose a series of things including Risk Management strategy related to physical risk by the Climate Crisis. The devil will be in the details and the sec will have to work through that with the privatesector and the community of investors but it is crucial that that type of Authority Come from the congress or it will be left to the financial regulators and still remain in a difficult environment of uneven disclosures. The sec did issue in 2010 some guidance on disclosing against climate risk but there was no introduction of these requirements so we are still in a world where this is encouraged but not required. Meanwhile in europe they are moving forward with the European Union Sustainable Finance taxonomy. It sounds incredibly boring but it is quite important. It is going to be a list of activities determined by experts and scientists to be aligned with the Paris Agreement in terms of mitigation and adaptation that could provide a sense of credibility around these types of activities. In other words if a bank or another Financial Institution puts out a green Financial Product or product meant to be good for adaptation how do you know if it is truly green or sustainable and truly Climate Friendly . This is one way to do it. If you apply the taxonomy it will be an approved, fully endorsed definition of good for meditation will be and this will be a european standard that would be universally applied at least in europe and would therefore help those in the market trying to make sense of these activities have that reference point. They are pretty far along, the taxonomy has been released and consulted extensively but it has yet to be approved by the council of ministers so that will be crucial if that happens, around 2023 this would start getting implemented and it would move very quickly in a major regional economy. Finally there is the Climate Resilience principles launched this year by the climate bond initiative, focused very much on the bond space. Youve heard of green bonds, they are everywhere. Washington dc should its own green bond for water and the problem is a lot of these bonds are focused mostly on the mitigation side. We havent done much for adaptational resilience and what these standards do is to help define exactly what our, quote, allowable highquality credible activities for adaptation and resilience so there is good material out there, Building Blocks out there but we have yet to take the big step of endorsing and turning these into law. What should congress do . The first thing i would say is to reflect on what we have learned for the last 5 years and begin to realize there are limitations to voluntary disclosure regime we are part of now and that means in my view theres an obvious need to move towards a mandatory disclosure regime, that is what the adaptation commissions recommendation also contains and i think importantly these have to be gradually introduced in order to make sure the market will be able to absorb them and work through them. These are complicated things that weve had some practice. Other initiatives have allowed the market to practice with a lot of these in a sandbox type of environment. It has to be gradually introduced but we need a set of common standards and metrics. If every company gets to choose how it reports on what metrics and what basis and what scenarios and what temperature targets it is going to be such a disorder of information the market will ignore it. It is crucial that this information be presented to the market and investors in a way that is comparable, consistent and common to all the companies. That is going to take centralized action and that is why it is important to have government involvement. It is important that we initially apply this to the Public Listed Companies in the first instance, folks often say small and Mediumsized Enterprises dont have the resources to do this, it would be an enormous burden on them and that is true. We are not suggesting this type of disclosure begin with those that are publicly listed. We have the mechanisms to do that. The process will take time, better to start soon especially now that the voluntary approach has run for five years in the us and europe dont end up with separate standards. This is happened before. The accounting standards, it is important to begin conversation, transatlantic conversation for larger Capital Markets to have a single standard and finally it is important to get china and japan to eventually join us so there is a level Playing Field in terms of disclosure. Transparency and disclosure are not going to solve everything. Market transparency will be a powerful tool to move the system across the board but it will not necessarily help the condition. We are still going to have to provide assistance and support to companies and communities for them to build that resilience. The market will simply be able to discriminate between those that are riskier and less risky and may move very swiftly to punish those that are not taking action but unless we also provide at the same time a letter of support and help to those who want to build resilience it is going to be difficult for them to move forward. Thank you for this opportunity. We look forward to considering this dialogue. Your point is well taken that the International Markets are moving very quickly and strongly towards Climate Risk Disclosure and the us should be part of the finding. When you started, you made me think again of that iconic picture during Hurricane Sandy of goldman sachs, the only lit building in midtown manhattan which brought me back to the opening point that it takes the system. Is not any good to have just one building lit if you cant get anybody to or from so the infrastructure, the transportation, the finance, the natural resources, necessary to build resilience system. Its your turn to ask questions. I cant believe we sat through all of that without plotting. They deserve a round of applause. All i could do not to burst into applause. Before we get into the queue and they a couple quick things. First i would like to give a special thanks to our friends at the today, sam medlock in the back, senior counsel, melvin felix, communications director. You would like to say a few words. Absolutely. Thank you. On behalf of chair cast or i thank everyone for being here today. I quickly want to mention the select committee on the Climate Crisis is developing a set of policy recommendations for Climate Action. For congress to take. Those will be made public in march of next year and we need your ideas and policy proposals as groups, as organizations and as individuals so i want to plug our information request which is climatecrisis. House. Gov request. It is a big document you can fill out any parts that you have ideas on whether it is resilience, adaptation, carbon pricing, all of that. Climate crisis. House. Gov inforequested you can follow our work on facebook, twitter and instagram. Thank you so much. You want to Say Something cute you we have sat down to normal height. Sam medlock i want to recognize some of our other fantastic staff that are here in the audience with rollie martin, e. G. I fellow helping to lead a lot of our thinking around science including metrics and data and how do we deliver a lot of the tools and decisions and actionable information that is needed and also our incredible clerk and a couple interns who are here, and after we adjourn. This is building twitter report to congress in march 2020. Your input is really valuable so thank you. And thanks to the science, space and technology for hosting us in their nice room. Today is november 1st. I have only been here a month and we have been very busy. In addition to working on our response to the rfi, there are many of us here who have been busy with briefings. We do a lot of briefings and they are all fantastic so if you are not a regular attendee version change and you should start attending, we have webcast options, three coming up that i need to plug, november 6th next week, Community Centered resilience lessons from louisiana, november 15th the growing role of Renewable Energy and november 22nd which is also the deadline for the rfi response, that is burned into my memory. The decarbonization of the us, these are just the ones in november. We will make announcements for december and january and if you cant be with us in person we have webcasts and we record everything. If you are not already visiting or subscribing to our newsletter, including the climate solution newsletters we have a lot of information and it is all quite good. If you are not currently using a resource you should change that. I want to thank our friends at cspan for bringing us to a wider audience today and our friends at World Resource Institute for all the great work. We are going to get started with questions. We have a roving microphone somewhere, there she is held by savanna. I dont know im going to get started and kick off the first question. The first question is when you look at what other developments are going on, to advance human adaptation practices and making investments what are the best practices and Lessons Learned that you think us policymake it should look at and emulate . In your microphones will turn on in the same way with a little talk button. Please feel free. This report has several examples from other developing countries but i will name Major Economies and expand it. I name four examples of good practices. One is the netherlands. As many know the dutch have been living with water for quite some time and theres an example of their effort, rooms for the rivers is what its called and instead of building levees higher and higher as the level rises, it is making room for the river so it does flood and allowing that space for flooding and not having development on that space which then increases loss and damages. Second would be an example on infrastructure in the uk. And iconic example in the adaptation community is the thames barrier built to protect 1. 3 Million People, more than 265 billion pounds of property and assets from storm surges and high tides. China, often an example, they have a goal in sponge cities in china to absorb, reuse or capture 80 of storm water runoff in urban areas by 2030 and the force is our neighbors to the north in canada investing and financing in naturebased solutions particularly natural infrastructure, restoring saltwater match marshes to protect against coastal flooding. Any other comments from our panel . Go and turn to the audience. Question here in front. Earlier the question for leo, earlier this week, a purity study showing coastal flooding risks are massively greater in most of the world other than the us that have been understood because we were able to develop an improvement on the coastal elevation data set. It is not just how high the water is but how high is the land. The data set used today turns out to be wrong by an average error of 6 feet. We have been able to use Machine Learning to adjust that down to three inches, the result being there are 300 Million People at risk of annual flooding 3 times more than previously understood by 2050, 150 million at risk of daily flooding also known as high tide line by 2050 and those numbers doubled at the end of the century. My question for leo is how do we ensure that is companies are doing their analysis of climate risk that they are using new data such as the set not just this but other data that becomes available much of which indicates the risks are worse than had been understood to date . A couple of thoughts. One is it is going to be crucial to have the type of disclosure regime i mentioned in my remarks because it will then empower investors including the really big Institutional Investors who hold large chunks of shares in these companies to engage with those companies and ask what are you doing to deal with this risk, what precisely with scenarios you are planning and and how are you deploying resources, what are the redundancies and other safeguards you are putting in place so if this were to happen you dont lose production or supply . The other piece is the insurance company. They are crucial because they will have to be taken seriously, companies rely on insurers to deal with this risk and to deal with the superrisk. The insurers are going to want to know the companies are taking into account the best science Data Available and we need to make sure there is not the perception that government will come in and bail you out because that is the perception in the residential markets. We know the National Flood Insurance Program and its challenges, the Global Commission adaptation mentioned this issue of moral hazard and how do we make sure companies do not do nothing because they feel ultimately there is damage, and implicit government guarantee that will essentially pour resources into those companies and communities . Of course government has to be there to protect communities and help them recover but there has to be a division of labor and division of financial labor between the Public Sector and private sector and that conversation we havent truly had and we have to have it. Its going to require demarcating where the governments role begins and ends and where companies are going to be expected to put some skin in the game. We have a question over here. In addition to that, one of the things we recognize and report is given the pace of urbanization taking place globally and the incredible lack of data city officials have in many places around the world one of the most Strategic Investments that can be made is basic topographic maps. City officials dont even know necessarily the elevations in their area. It is all online. And how we translate or share that use that given the recent advances to do that is a huge opportunity. One of the things that has been emphasized is the need for action on the federal level so my question, having seen so much of that recently and if we dont see that soon in the next four years is there a plan b . Is there something cities, or can the privatesector step up more . Do we have a backup plan if federal support doesnt come quickly . Thanks for the question. I will say a couple things on that. The perception is widespread but not sure it is completely accurate. I talked about this in the Senate Energy committee. There are a lot of bills and they are not just being introduced. Their committees are taking action. Many are finding their way to the senate floor or calendar at least. The transportation bill that has emphasis on infrastructure including naturebased solutions the natural infrastructure is one example sitting on the calendar, who knows when it will come up but it has a lot of potential and on the house side the select committee has been very busy but so has the committee of jurisdiction, Energy Commerce in particular is working through a lot of bills. Many of them are limited in scope so maybe theres an Energy Efficiency bill, storage bill, workforce bill, weatherization bill but when taken together if they could be enacted and enacted in the 116th congress that would be a great place to get started but let me see what the panelists think too. I would agree and one of the most Amazing Things we saw was the coalition that is called we are still in. You are seeing cities and states, the privatesector, the philanthropic community, the Investment Community all saying we recognize this is a problem and we are still dedicated to confronting Climate Change, mitigating as much as the us originally promised and coping with these problems that the city mayors are feeling on the front line and that was an amazing a mass meant of groups all around a common theme and theres great strength in those numbers. We know philanthropy, the public money can solve it, we need the privatesector to be in their strongly and they are now. Feel free to go down the line. On the we are still in, the us climate alliance, most of the focus has been what they are doing on mitigation but they are doing quite a bit on adaptation. There is a whole set of landuse solutions related to agricultural plans that they are working with and we need to remember that oftentimes some of the best solutions sequester carbon, help the mitigations site but build resilience and theres a lot that can be done build on mitigation and adaptation. The other piece is think a little bit about not only looking at standalone bills but adaptation and how to weave building resilience into your bills that are likely to go forward in any case. It was a nice example and i dont know the details but i suspect you do, the transportation infrastructure act, there is a wide range of bills and one of the things we tried to make clear in this report is adaptation is just about doing growth with development and we need to look at how to actually reframe sometimes the narrative from one that might be polarized around Climate Action to one about building resilience in what we do every day. We can do both and it is not plan a or plan b. Frontline communities are facing the impact of Climate Change today and regularly will continue to take action to prepare. One of our commissioners is the mayor of miami and hes doing great things in miami. One of the examples we highlighted is the miami forever bond where taxpayers in miami voted for their taxpayer money to go toward climate preparedness. I also think there are front runner states and front runner cities and communities that will continue to take steps to adapt. We need at the federal level, there was a mayor from louisiana on november 6th, part of the state, local, tribal task force talking about how there just arent the resources miami or new york has so those communities are on the front lines but dont have the resources and capacity and that is where the federal government and policies at the federal National Level are needed to support those communities. I remain hopeful that we can do both. One last asset that exists and is being amplified is the Climate Resilience toolkit which has examples from all different parts of the country and you can put in your latitude and longitude, your city and it will give you future projections and you can work your way through what is most vulnerable and give you case studies how other communities have responded. One of the themes of our response as we were putting it together is the point you are raising which is in order to get this done it cant just be the federal government, cant be state or local governments, this requires a huge amount of coordination in order to get this done because we dont have time to Waste Resources if we are not pulling in the same direction of the team same time. We had another question up here in the front. First off thanks for such an amazing set of talks. My name is alex. Im working with senator shots was i have a question about Climate Change risk versus transition risk. For the privatesector it seems Different Companies have different portfolios of risk whether they are negra cultural company, they have Climate Change risk versus fossil companies where they have a large transition risk. To the large Institutional Investors are they mostly worried about Climate Change risk or institutional risk or transition risk and with the disclosure act do you think they will use the same framework for Climate Change risks and transition risks or is are going to need to be a different framework . That sounded like it was aimed right at you. Climate risk is a relative term in that you have transition risk that is to say the danger your Business Model will be appended by changes in policy or technology so that if your company is based on pumping oil and gas and suddenly that becomes unfeasible because of changes in regulation what happens to your companys value. All the things weve been talking about, hurricanes, droughts and so on affecting your company, initially companies mostly focused on transition risk, initially when they were launched, focus was very much on the cement companies, the Energy Companies and how are they going to deal with this shift to a higher carbon price . Since then partly because of all the disasters that have beset the world in the last four years the privatesector and investors are increasingly concerned about physical risks. We had the finance center talk to a lot of investors especially Asset Managers at the top of the financial food chain and they tell us they are most concerned about climate risk and increasingly devoted resources to understanding physical risk. The problem is they need data, lots of data from the companies in which they invest and often times that data is not forthcoming or is coming in ways that are hard to compare and that is where the disclosure, mandatory disclosure could help but i think the privatesector really gets it and they are really concerned about it. The two kinds of risk the transition and the physical are very different. One is about regulatory change affecting a very specific set of companies. The other is about complex set of physical risks affecting supply chains and markets more broadly. The trademarks will have to be different for both the to do this right you need two sets of people who are quite different in skills and expertise to put together frameworks that make sense. One small addition to that for many of these companies that have complex supply chains that these risks need to be appreciated. Given this will risk in different parts of the value chain but in particular the transitional Regulatory Risk has implications given many other Companies Take action on this. In the last administration. For how things are accelerated, most of the s p 100, and using longterm climate models, almost 40 . When it comes to the supply chain and understanding an event at one part of the world will affect you too is taking off, very important. We have time for one as long as it is brief in the front row. The front row is showing up today with questions, thank you. Talking about the highway bills or transportation bills that are going through where transport station is located determines where private investment will go and develop. What should we look for to get into the transportation bills to keep transportation infrastructure to build in the wrong places. I will leave that to the panel. 3 thing stick out to me. A viable legislative vehicle. That will attract a lot of attention and lots of ideas for where members do. There are block Grant Programs and Community Development and other block Grant Programs, one called the surface transportation block grants and one was promoting resilient operations or transformative, efficient and costsaving transportation which conveniently reduces to protect and those are great ways for the federal government to encourage what the panelists talk about. Happy to turn it over to the panel. Speaking in terms of transportation. In your question about how you prevent or disincentive eyes adaptation, building transportation in areas we know are more at risk for example floods where one in 100 flight is now a one in 25 year and that gets to dans point on landuse. How can we be better at thinking about zoning regulations to disincentive eyes building a Public Transportation infrastructure in areas we know at risk. A couple things. One is to make sure the planning and design of the infrastructure is based on the best available data and most updated flood map, talking infrastructure with Life Expectancy of 50 plus years. The other is known as no regret policies or practices. Did you incorporate into the infrastructure some flexible features, but what you might do is make sure that structure can be lowcost, expanded, raised, elevated or retrofitted in some way to cope with the projection that exceeds the baseline so for example in california there is a breach that has structures that are designed for a certain sealevel height that can be elevated further should the need arise and it can be done cheaply so you have to factor that flexibility into the structure before you build it just for a rainy day if you will. I looked that way and saw doug mason sitting over there and doug was an effort. The Hoover Institute put out a paper this year in infrastructure and principles for slight climate infrastructure. I was reading through it the other day, i cant remember what the principles were but i think there are organizations like hoover and experts like doug mason in the room who would be a wealth of expertise on advice to that particular we have to end it there. We are a couple minutes past 11. Speaking to the bill we have a wonderful fact sheet, naturebased solutions on the transportation bill. Let me thank anna, amber, george, for all the work in pulling out the briefing. Thank you and hope everyone has a really great rest of your friday. Thank you. [applause] [inaudible conversations] [inaudible conversations] booktv has coverage of the recent boston book festival beginning today at 2 00 pm eastern with author discussions on violence. It is common to say in the area of gun violence that we need more research and the assumption, implicit in that statement is we dont know what works to reduce gun violence. Thats not true in relation to urban gun violence. Urban gun violence is the most studied, most rigorously studied form of gun violence. The failure in syria goes back a long way. It doesnt begin with donald trump, doesnt begin last week, it began with the fact the United States has never since the syrian uprising began known what was actually trying to accomplish. The environment. Right now call is where a lot of asthma is coming from. Call waste as arsenic, lead, mercury, all the things you are talking about and we cite all these in poor communities, communities of color but Nuclear Plants can produce electricity without all those pollutants. At keynote talk by civil rights attorney been grump. States like florida and tennessee, one out of every 5 black men are convicted felons and these statistics are similar in many states across the country and experts suggest if this trend continues in the next 25 years it will be one of every three black men in america who are convicted felons. Reporter watch the boston book festival at 2 00 pm eastern and catch the Miami Book Fair Live Saturday and sunday, november 23rd and 24th on booktv on cspan2. More from campaign 2020 later today when joe biden will open his Newest Campaign office in the morning, iowa. Is expected to be joined by his wife jill biden at the event, watch live coverage at 11 45 eastern on cspan, online, cspan. Org or listen to the free cspan radio apps. Next, National Economic Council Director larry kudlow talks to white house reporters about the october unemployment numbers from the labor department. This is a little over 10 minutes