More stories

  • in

    Dilemma on Wall Street: Short-Term Gain or Climate Benefit?

    A team of economists recently analyzed 20 years of peer-reviewed research on the social cost of carbon, an estimate of the damage from climate change. They concluded that the average cost, adjusted for improved methods, is substantially higher than even the U.S. government’s most up-to-date figure.That means greenhouse gas emissions, over time, will take a larger toll than regulators are accounting for. As tools for measuring the links between weather patterns and economic output evolve — and the interactions between weather and the economy magnify the costs in unpredictable ways — the damage estimates have only risen.It’s the kind of data that one might expect to set off alarm bells across the financial industry, which closely tracks economic developments that might affect portfolios of stocks and loans. But it was hard to detect even a ripple.In fact, the news from Wall Street lately has mostly been about retreat from climate goals, rather than recommitment. Banks and asset managers are withdrawing from international climate alliances and chafing at their rules. Regional banks are stepping up lending to fossil fuel producers. Sustainable investment funds have sustained crippling outflows, and many have collapsed.So what explains this apparent disconnect? In some cases, it’s a classic prisoner’s dilemma: If firms collectively shift to cleaner energy, a cooler climate benefits everyone more in the future. But in the short term, each firm has an individual incentive to cash in on fossil fuels, making the transition much harder to achieve.And when it comes to avoiding climate damage to their own operations, the financial industry is genuinely struggling to comprehend what a warming future will mean.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Will Billions More in New Aid Save Family Farms?

    Agriculture Secretary Tom Vilsack has a line about the state of small-scale agriculture in America these days.It’s drawn from the National Agricultural Statistics Service, which shows that as the average size of farms has risen, the nation had lost 544,000 of them since 1981. “That’s every farm today that exists in North Dakota and South Dakota, added to those in Wisconsin and Minnesota, added to those in Nebraska and Colorado, added to those in Oklahoma and Missouri,” Mr. Vilsack told a conference in Washington this spring. “Are we as a country OK with it?”Even though the United States continues to produce more food on fewer acres, Mr. Vilsack worries that the loss of small farmers has weakened rural economies, and he wants to stop the bleeding. Unlike his last turn in the same job, under former President Barack Obama, this time his department is able to spend billions of dollars in subsidies and incentives passed under three major laws since 2021 — including the biggest investment in conservation programs in U.S. history.The plan in a nutshell: Multiply and improve revenue streams to bolster farm balance sheets. Rather than just selling crops and livestock, farms of the future could also sell carbon credits, waste products and renewable energy.“Instead of the farm getting one check, they potentially could get four checks,” Mr. Vilsack said in an interview. He is also helping schools, hospitals and other institutions to buy food grown locally, and investors to build meatpacking plants and other processing facilities to free farmers from powerful middlemen.American Farms Are DisappearingAs agriculture consolidates, fewer operations grow more crops.

    Source: U.S. Department of AgricultureBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    As Wildfires Grow Fiercer, Some Companies Look to Rebuild the Tree Supply Chain

    As forests succumb to ever-fiercer wildfires, the federal government and some adventurous private companies are trying to resuscitate an industry.When it came to wildfires, 2021 was an increasingly common kind of year in Montana: Flames consumed 747,000 acres, an area nearly the size of Long Island.About 2,700 of those acres were on Don Harland’s Sheep Creek Ranch, where ever-drier summers have turned lodgepole pines into matchsticks ready to ignite. After the smoke cleared, Mr. Harland found creeks running black with soot and the ground hardening more with every day that passed.A former timber industry executive, Mr. Harland knew the forest wouldn’t grow back on its own. The land is high and dry, the ground rocky and inhospitable — not like the rainy coastal Northwest, where trees grow thick and fast. Nor did he have the money to carry out a replanting operation, since growing for timber wouldn’t pay for itself; most of the nearby sawmills had shut down long ago anyway. The state government offered a few grants, but nothing on the scale needed to heal the scar.Then a local forester Mr. Harland knew suggested he get in touch with a new company out of Seattle, called Mast. After visiting to scope out the site, Mast’s staff proposed to replant the whole acreage, free, and even pay Mr. Harland a bit at the end. Mast, in turn, was to earn money from companies that wanted to offset their carbon emissions and would put millions of dollars into planting trees that otherwise wouldn’t exist.Mr. Harland said he had his doubts about the carbon-selling part of the plan, but he was impressed with Mast’s operations, so he said yes.Two years later, after seeds had been collected from similar trees on nearby lands, crews of planters came out with bags full of seedlings, rapidly plunking them into the ashen ground. As part of the deal, Mr. Harland signed an agreement to let the trees grow for at least 100 years, so they can keep sucking greenhouse gases out of the air as they mature.Can carbon credits help rebuild a forest? Tell us what you think. More

  • in

    They Grow Your Berries and Peaches, but Often Lack One Item: Insurance

    Farmers of fruits and vegetables say coverage has become unavailable or unaffordable as drought and floods increasingly threaten their crops.Farmers who grow fresh fruits and vegetables are often finding crop insurance prohibitively expensive — or even unavailable — as climate change escalates the likelihood of drought and floods capable of decimating harvests.Their predicament has left some small farmers questioning their future on the land.Efforts to increase the availability and affordability of crop insurance are being considered in Congress as part of the next farm bill, but divisions between the interests of big and small farmers loom over the debate.The threat to farms from climate change is not hypothetical. A 2021 study from researchers at Stanford University found that rising temperatures were responsible for 19 percent of the $27 billion in crop insurance payouts from 1991 to 2017 and concluded that additional warming substantially increases the likelihood of future crop losses.About 85 percent of the nation’s commodity crops — which include row crops like corn, soybeans and wheat — are insured, according to the National Sustainable Agriculture Coalition, a nonprofit promoting environmentally friendly food production.In contrast, barely half the land devoted to specialty crops — supermarket staples like strawberries, apples, asparagus and peaches — was insured in 2022, federal statistics show.Among those going without insurance is Bernie Smiarowski, who farms potatoes on 700 acres in western Massachusetts, along with 12 acres for strawberries. His soil is considered some of the nation’s most fertile. The trade-off is the proximity to the Connecticut River, a bargain that grows more tenuous as a warming world heightens the likelihood of flooding.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Why the Panama Canal Didn’t Lose Money When Ship Crossings Fell

    A water shortage forced officials to reduce traffic, but higher fees increased revenue.Low water levels have forced officials to slash the number of ships that are allowed through the Panama Canal, disrupting global supply chains and pushing up transportation costs.But, remarkably, the big drop in ship traffic has not — at least so far — led to a financial crunch for the canal, which passes on much of its toll revenue to Panama’s government.That’s because the canal authority introduced hefty increases in tolls before the water crisis started. In addition, shipping companies have been willing to pay large sums in special auctions to secure one of the reduced number of crossings.In the 12 months through September, the canal’s revenue rose 15 percent, to nearly $5 billion, even though the tonnage shipped through the canal fell 1.5 percent.The Panama Canal Authority declined to say how much money it earned from auctions. At a maritime conference last week in Stamford, Conn., Ilya Espino de Marotta, the canal’s deputy administrator, said the auction fees, which reached as much as $4 million per passage last year, “helped a little bit.”But even now, during a quieter season for global shipping, auction fees can double the cost of using the canal. This month, Avance Gas, which ships liquefied petroleum gas, paid a $401,000 auction fee and $400,000 for the regular toll, said Oystein Kalleklev, the company’s chief executive. Auction fees are ultimately borne by the company whose goods are being shipped.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Can Europe Save Forests Without Killing Jobs in Malaysia?

    The European Union’s upcoming ban on imports linked to deforestation has been hailed as a “gold standard” in climate policy: a meaningful step to protect the world’s forests, which help remove planet-killing greenhouse gases from the atmosphere.The law requires traders to trace the origins of a head-spinning variety of products — beef and books, chocolate and charcoal, lipstick and leather. To the European Union, the mandate, set to take effect next year, is a testament to the bloc’s role as a global leader on climate change.The policy, though, has gotten caught in fierce crosscurrents about how to navigate the economic and political trade-offs demanded by climate change in a world where power is shifting and international institutions are fracturing.Developing countries have expressed outrage — with Malaysia and Indonesia among the most vocal. Together, the two nations supply 85 percent of the world’s palm oil, one of seven critical commodities covered by the European Union’s ban. And they maintain that the law puts their economies at risk.In their eyes, rich, technologically advanced countries — and former colonial powers — are yet again dictating terms and changing the rules of trade when it suits them. “Regulatory imperialism,” Indonesia’s economic minister declared.The view fits with complaints from developing countries that the reigning international order neglects their concerns.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Nature Has Value. Could We Literally Invest in It?

    “Natural asset companies” would put a market price on improving ecosystems, rather than on destroying them.Picture this: You own a few hundred acres near a growing town that your family has been farming for generations. Turning a profit has gotten harder, and none of your children want to take it over. You don’t want to sell the land; you love the open space, the flora and fauna it hosts. But offers from developers who would turn it into subdivisions or strip malls seem increasingly tempting.One day, a land broker mentions an idea. How about granting a long-term lease to a company that values your property for the same reasons you do: long walks through tall grass, the calls of migrating birds, the way it keeps the air and water clean.It sounds like a scam. Or charity. In fact, it’s an approach backed by hardheaded investors who think nature has an intrinsic value that can provide them with a return down the road — and in the meantime, they would be happy to hold shares of the new company on their balance sheets.Such a company doesn’t yet exist. But the idea has gained traction among environmentalists, money managers and philanthropists who believe that nature won’t be adequately protected unless it is assigned a value in the market — whether or not that asset generates dividends through a monetizable use.The concept almost hit the big time when the Securities and Exchange Commission was considering a proposal from the New York Stock Exchange to list these “natural asset companies” for public trading. But after a wave of fierce opposition from right-wing groups and Republican politicians, and even conservationists wary of Wall Street, in mid-January the exchange pulled the plug.That doesn’t mean natural asset companies are going away; their proponents are working on prototypes in the private markets to build out the model. And even if this concept doesn’t take off, it’s part of a larger movement motivated by the belief that if natural riches are to be preserved, they must have a price.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Climate Change Takes Center Stage in Economics

    With climate change affecting everything from household finances to electric grids, the profession is increasingly focused on how society can mitigate carbon emissions and cope with their impact.A major economics conference this month included papers on wind turbine manufacturing, wildfire smoke and the stability of electricity grids.From left: Joe Buglewicz for The New York Times; Earl Wilson/The New York Times; Zack Wittman for The New York TimesIn early January in San Antonio, dozens of Ph.D. economists packed into a small windowless room in the recesses of a Grand Hyatt to hear brand-new research on the hottest topic of their annual conference: how climate change is affecting everything.The papers in this session focused on the impact of natural disasters on mortgage risk, railway safety and even payday loans. Some attendees had to stand in the back, as the seats had already been filled. It wasn’t an anomaly.Nearly every block of time at the Allied Social Science Associations conference — a gathering of dozens of economics-adjacent academic organizations recognized by the American Economic Association — had multiple climate-related presentations to choose from, and most appeared similarly popular.For those who have long focused on environmental issues, the proliferation of climate-related papers was a welcome development. “It’s so nice to not be the crazy people in the room with the last session,” said Avis Devine, an associate professor of real estate finance and sustainability at York University in Toronto, emerging after a lively discussion.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More