A reader chastised me because I asked how Florida business schools are supposed to teach the economic and financial effects from climate change when they are not permitted to mention the words climate change in textbooks. The reader said the subject is “political” and has no place in financial/economic/market newsletters. That reader is entitled to his opinion. So are you.
I’m entitled to my opinion, too. IMO, not discussing climate change is an abrogation of responsibility at all levels (local, state, federal) and especially in the arena of finance, economics and markets. Here’s why.
Climate change is a multi-trillion-dollar continuing event. Just ask insurers, lenders, mitigation providers, state and local governments who are issuers of $4 trillion in municipal bonds that deal with budgets affected by hurricanes, floods, or fires. Ask medical enterprises who treat heat injuries or respiratory distress. Ask bankers who are lending in coastal areas. Ask real estate location consultants. Ask users of large power supplies. Ask providers of that power. I could go on with this list for pages.
Climate change (whether warming or cooling or wetter or drier conditions) is big, serious and, possibly, more costly than war. When you include climate change-caused disease, it has killed more people and displaced more people than war. That is a fact. For some details about the impacts of climate change please review the reading selections at the end of this commentary. Then you may decide how important climate change is and whether it is a legitimate subject for study in schools at all levels.
Because of the importance of this topic, we will offer “Climate change,” Part 1 and Part 2 commentaries.
Today is Part 1.
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In an example of irony, 20 state attorneys general filed the following motion with SCOTUS within a few days of the hottest day on record for Planet Earth in at least 125,000 years. (See “Monday breaks the record for the hottest day ever on Earth,” https://www.yahoo.com/news/monday-hottest-day-record-earth-070026348.html.)
Here’s the filing document and a report on it. Please see for yourself the states and politics of those filing.
“STATES’ EMERGENCY APPLICATION FOR AN IMMEDIATE STAY OF ADMINISTRATIVE ACTION PENDING REVIEW IN THE D.C. CIRCUIT,” https://ago.wv.gov/Documents/Carbon%20Rule%20Stay%20Application.pdf
“Republicans ask Supreme Court to pause new EPA rules limiting planet-warming pollutants,” https://www.cnn.com/2024/07/23/politics/power-plant-emissions-supreme-court-republicans
Note also that this is what the United States and part of Canada looked like on an air-quality map two days after the heat record. Readers can decide for themselves how they view this governance.
Here’s the concluding paragraph from the Project 2025 document on the proposed shrinkage of the Environmental Protection Agency (EPA). The details in the 30 pages that lead to this conclusion are specific.
A more conservative EPA that aligns with the policies outlined in this chapter will lead to a better environmental future without unintended consequences. It will prevent unnecessary expenditures by the regulated community, allowing for investment in economic development and job creation, which are keys to thriving communities. Cutting EPA’s size and scope will deliver savings to the American taxpayer. Improved transparency will serve as an important check to ensure that the agency’s mission is not distorted or coopted for political gain. Importantly, a conservative EPA will deliver tangible environmental improvements to the American people in the form of cleaner air, cleaner water, and healthier soils.
IMO, just the opposite can be expected if this roadmap becomes a reality. I have read the entire section 13 of Project 2025. I strongly recommend anyone interested in the EPA and/or the environment spend the time to read it. It starts on page 417. I want to note that Trump has “disavowed” parts of the document but hasn’t pointed to specifics. He also said he hadn’t read it. Note that it was prepared by a large group of people who were in his administration. Note that Kamala Harris has condemned it.
My takeaway is that Project 2025 takes the entire environmental protection agenda and brings it to an immediate halt. A full stop. It then replaces scientists with political appointees, attempts to reverse EPA initiatives, and favors returning authorizations to the states where Project 2025 can do so. Where it can’t, the outline calls for congressional authorizations. IMO, the Heritage Foundation’s proposal reflects that this organization has become radicalized and lost its basic values. Lower taxes and less regulation may be a valid political stance, but it’s another thing to promote an approach that directly worsens air quality, water degradation, and soil contamination. See “Project 2025 Calls For EPA To Shift Focus From Climate Change,” https://www.forbes.com/sites/jonmcgowan/2024/07/11/project-2025-calls-for-epa-to-shift-focus-from-climate-change/.
There is one positive note in Project 2025, which deals with water and calls for increased spending. I will extract the paragraph on page 430 and then comment on it.
While the overall goal is certainly to reduce government spending, there is one very targeted area where increased spending would be in the nation’s interest. The Clean Water Act needs survey is the entire basis for how congressionally appropriated funds directed to state revolving funds—standard annual appropriations that are the true underpinning of all infrastructure funding for drinking water and clean water—are distributed by EPA across the country. Because this program is currently underfunded [bolded by Kotok], money is being thrown at untargeted locations while water infrastructure is crumbling at other locations. Increased targeted funding would greatly benefit water systems across the country at a time when intervention is crucial, leaving fewer communities with significant water service challenges.
Readers may ask, “Why is this underfunded?” For answers, I recommend reviewing the actions of the Congress and particularly the House of Representatives, where a minority of extremist alt-right Members have blocked environmental (including water) funding in budgets. Karl Rove is a leading Republican political commentator and former insider and counselor to a Republican presidential administration. Writing in the Wall Street Journal, he has editorialized and labeled these potentially destructive congressional miscreants the “Chaos Caucus.”
The reason I think Project 2025 is neither credible nor reliable is simply that it is dishonest. It is portraying that everything wrong is the fault of the political party they’re attacking, while everything can be fixed by the political party extremists who are sponsoring Project 2025. BTW, I would repeat this criticism if a highly partisan political document were as meticulously prepared by the political opposition. For the environment, for climate change mitigation, for water for agriculture and our food supply, for a list of many, many elements, Project 2025 is a roadmap to climate disaster, air toxicity, water poisoning, and food risk. IMO, it is downright dangerous to my health and yours.
Let me repeat, Trump has disavowed Project 2025 with generalities – said he hasn’t read it – but he hasn’t entirely condemned it (and most of it was written by former Trump administration personnel). Here’s an NBC report about it. See “What comes next after Trump’s Project 2025-bashing tour,” https://www.nbcnews.com/politics/donald-trump/comes-trumps-project-2025-bashing-tour-rcna164417.
Anyway. Project 2025 is out in the open now and not secretive. See “Project 2025, Explained: What It Says and What Trump Says About It,” https://www.bloomberg.com/news/articles/2024-07-18/project-2025-does-trump-support-it-his-plan-versus-what-it-says.
In our forthcoming climate change, part 2 commentary, we are going to get very specific and discuss what Project 2025 says about the response to the threats to the entire planet from the ozone hole expansion. Readers can decide for themselves what they want in their future when it comes to mitigation of the already predictable trends in adverse climate outcomes.
IMO, it is already too late to reverse the trajectory for some outcomes. Politics has prevented that. Only the expanding ozone hole, which threatened death to much of the planet, became a serious and obvious enough problem so as to cause politics to reverse itself; results are chlorofluorocarbons became regulated and mostly eliminated. See with your own eyes what Project 2025 says about chlorofluorocarbons and regulation. Then you can make your own decisions. I will focus on the topic in part 2.
Note the images below show ozone layer recovery and that it IS possible to reverse damage if we stop the political infighting and collectively decide to act in our own best interest.
The challenge before us is the mitigation of the impacts from changes already underway. The alternative is to permit the climate changes to occur more and more rapidly and with greater and greater intensity, as our divisive politics continues to allow us to do next to nothing.
I’m not sanguine about this outcome. I believe it will take catastrophe after catastrophe before citizens (voters) will connect the dots between climate events and the governance that brought us there. I will give examples in a future writing. This will not be the first time in human history that we ignored climate at our peril and perilous events followed.
Stay tuned for Part 2.
Now here’s a reading list on various climate issues.
This entire 45-minute interview with William White, former chairman of the Economic and Development Review Committee at the OECD, is extraordinary. And the emphasis on climate and costs is very well supported. “Why Interest Rates and Inflation Are Here to Stay | Williams White,” https://www.youtube.com/watch?v=d2GG2u7agsE
“What is Project 2025? How Trump and Biden compare on climate change,” https://yaleclimateconnections.org/2024/05/the-choice-could-not-be-more-stark-how-trump-and-biden-compare-on-climate-change/
“Project 2025 Wants to Propel America Into Environmental Catastrophe,” https://www.wired.com/story/project-2025-wants-to-propel-america-into-environmental-catastrophe/
“What Project 2025 would mean for the fight against climate change,” https://thehill.com/policy/energy-environment/4769252-project-2025-climate-change-energy-environment/
“Textbook authors told climate change references must be cut to get Florida’s OK,” https://www.orlandosentinel.com/2024/07/05/textbook-authors-told-climate-change-references-must-be-cut-to-get-floridas-ok/
“In the South, Sea Level Rise Accelerates at Some of the Most Extreme Rates on Earth,” https://insideclimatenews.org/news/11072024/florida-sea-level-rise-accelerates-at-extreme-rates/
“How Soon Might the Atlantic Ocean Break? Two Sibling Scientists Found an Answer—and Shook the World,” https://www.wired.com/story/amoc-collapse-atlantic-ocean/
“Climate Shocks in the Anthropocene Era: Should Net Domestic Product Be Affected by Climate Disasters,” https://t.e2ma.net/message/l2kkxh/1qe44j
“A look back into Harris’ future,” https://www.politico.com/newsletters/the-long-game/2024/07/23/a-look-back-into-harris-future-00170584
“Disaster-Struck Cities Fight for Aid as FEMA Runs Low,” https://www.bloomberg.com/news/articles/2024-07-12/record-climate-disasters-are-putting-fema-aid-to-us-cities-at-risk
“New insurer offered Citizens customers steep premium hikes. Then the state stepped in.” https://www.sun-sentinel.com/2024/07/28/new-insurer-offered-citizens-customers-steep-premium-hikes-then-the-state-stepped-in (subscribers only). Excerpt: “Proposed renewal premiums averaging 40% to 832% higher than Citizens’ premiums were sent for the three takeouts to policyholders in 759 out of 992 Florida ZIP codes.”
“Wildfires and Human Health,” https://jamanetwork.com/journals/jama/article-abstract/2821142
“Monday breaks the record for the hottest day ever on Earth,” https://www.yahoo.com/news/monday-hottest-day-record-earth-070026348.html
“Enough With the Arrogant Attitudes Toward Extreme Heat,” https://www.wired.com/story/enough-with-the-arrogant-attitudes-towards-extreme-heat/
