Business
How bad the climate crisis gets is still up to us. We just have to act
As usual, California was ahead of the game.
It’s been two decades since lawmakers passed the first law to begin requiring electric utilities to replace fossil fuels with renewable energy. Nearly as long since Gov. Arnold Schwarzenegger called for 1 million solar roofs. A decade since the state first mandated large numbers of electric cars on the road, and four years since Berkeley became the first U.S. city to ban gas appliances in new homes.
None of those initiatives have protected the Golden State from the ravages of the climate crisis.
The eight largest wildfires on record have all burned in the last six years, collectively torching more than 4 million acres — and none of them was nearly as deadly as the 2018 Camp fire, which killed 85 people and destroyed the town of Paradise.
The three driest years ever recorded came to a dramatic end this past winter, when record rain and snow wreaked deadly havoc, flooding farmworker communities and burying mountain towns. The precipitation filled reservoirs but did nothing to change the reality that California faces a frighteningly water-scarce future as rivers dwindle and groundwater levels drop.
The coast has fared relatively better — but sea level rise grows ever more urgent. Cliffs are collapsing into the Pacific, rail lines are experiencing temporary shutdowns and waves are edging closer to toxic sites, threatening to poison nearby residents.
And there may be no more harmful consequences of global warming than extreme heat. Hundreds of Californians already die in heat waves every year, roasting in their homes and baking on asphalt streets with little shade. The toll will only rise as we continue to burn coal, oil and fossil gas, spewing heat-trapping carbon dioxide and methane pollution into the atmosphere.
If the Golden State is going to lead the world toward a better, safer future, our political and business leaders — and the rest of us — will have to work harder to rewrite the California narrative. Here’s how we can push the state forward.
Lisa Patel, a Stanford University pediatrician, saw the dangers firsthand during last year’s Labor Day weekend heat wave, when temperatures reached 116 degrees outside her hospital in Pleasanton. She worked two 24-hour shifts, and she was called to several deliveries where laboring mothers had fevers or other complications. She sent multiple newborns to intensive care.
“In retrospect, I don’t know if those moms had a true infection or if they just got overheated,” Patel said.
It’s not too late to stop climate change from getting worse.
But for California to lead the world toward a safer future, the state’s politicians, business leaders and tens of millions of residents will need to work a lot harder — and be willing to accept a tomorrow that looks different than today.
Los Angeles offers a telling case study.
The city is dominated by freeways built to serve gas-guzzling cars and trucks, and for decades its biggest electricity source has been a coal-fired plant in Utah. Ships and trucks belch toxic fumes into low-income communities of color. Many neighborhoods have precious few trees to protect residents from heat soaked up by the urban hardscape. There are too many grassy lawns, not enough protected bus lanes and far too many well-to-do white homeowners willing to fight dense housing construction near job centers.
Elected officials are trying, at least, to make things better.
L.A.’s first-ever chief heat officer, Marta Segura, is working on efforts to plant trees, update building codes to keep residents cool and create an early-warning system for dangerous temperature extremes, with public outreach in English and Spanish. The port is aiming for a 100% zero-emissions truck fleet by 2035. City leaders have approved rebates for replacing grass with native plants, plus billions of dollars in spending to expand the Metro rail system ahead of the 2028 Summer Olympics.
And that Utah coal plant? It won’t be around much longer. The L.A. Department of Water and Power has an ambitious plan to fuel the city with 100% climate-friendly energy by 2035, largely by using solar farms, wind turbines and lithium-ion batteries.
“This is a new direction — it’s kind of a new world order,” said Marty Adams, general manager of the Department of Water and Power. “We’re learning as quickly as we can, but there are a lot of things that are kind of like ground zero.”
None of it is enough. But at the same time, we’ve reached a point in history when almost nothing is enough.
Earth is likely headed beyond 1.5 degrees Celsius of warming — the goal urged by scientists and endorsed by nearly every nation at the 2015 Paris climate summit. Keeping average global temperature increases below that target would require slashing carbon pollution nearly in half by 2030 — not impossible, but nowhere close to current economic and political trends.
The 1.2 degrees of warming we’ve already felt have brought plenty of pain and suffering, especially for Black, Latino and Native American communities and nations in the Global South. Every additional tenth of a degree of warming will bring even more pain and suffering — and every tenth of a degree we avoid will mean better lives for billions of people.
So what more can California do to get its own house in order and possibly bring other states and countries along for the ride?
For one thing, California can prove it’s possible to phase out fossil fuels without badly disrupting daily life.
Hundreds of thousands of households and businesses got a taste of the difficulties in summer 2020, when state officials were forced to implement brief rolling blackouts during a brutal heat wave. There simply wasn’t enough power to supply tens of millions of air conditioners after sundown, when temperatures remained high but solar panels stopped producing electricity.
Residents barely avoided more outages the next two summers — and only then because they heeded pleas to use less power.
“We all want to accelerate the elimination of the gas,” Gov. Gavin Newsom said during a September 2022 heat storm. But the fact that gas-fired power plants still provide much of the state’s on-demand power is “a sober reminder of reality.”
Newsom has made climate and clean energy top priorities, likely knowing any future presidential campaign could flourish or fail on his performance. Like many leaders in Washington, D.C., the governor has urged permitting reform to make it easier to build the massive number of renewable energy facilities the state will need to ditch fossil fuels. He has also led a push to keep California’s Diablo Canyon nuclear plant open past 2025, so that it can keep generating emissions-free electricity.
There are many actions regular Californians can take to push the state forward, too: installing rooftop solar panels, replacing gas furnaces with electric heat pumps and gasoline cars with electric models and hardening their homes against wildfire.
Golden State residents can also think more broadly about how their lifestyles line up with climate imperatives.
Do you have an opportunity to take public transit to work, or to work from home? Would you support devoting more space on your neighborhood’s streets to buses and bikes, even if it slows down your car-based commute? Do you really want to move from a city to a rural or suburban area surrounded by forests when there’s a decent chance flames will come for your home?
Of course, living more sustainably would be easier with support from politicians and business executives — cheaper housing within cities, better bus and rail options, corporate policies that don’t require employees to drive to faraway offices.
“There is no more important issue for the world,” said Mike Feuer, formerly L.A.’s city attorney, during an unsuccessful campaign for mayor last year. “If we were to look forward to a conversation that our kids or grandkids might have in 20 or 30 years, they’re going to look back on us and say, ‘What the heck were you thinking?’ ”
No matter how hard California’s 40 million residents might work to reduce their own emissions, there’s nothing more effective they can do to fight climate change than to put pressure on elected officials to take more sweeping action.
That action should begin with aggressive measures to confront the fossil fuel industry, many activists say.
Under a bill pending in the state Legislature this year, California’s two big public employee pension funds — the nation’s largest — would be required to divest billions of dollars from oil and gas companies. Other proposals would require major corporations of all kinds to publicly report their heat-trapping emissions, as well as the risks that climate change poses to their operations.
But at least thus far, the deep-pocketed fossil fuel industry has largely been able to stave off transformative change.
Pumpjacks continue to suck oil and gas from the ground in and around Los Angeles, Kern County and elsewhere — polluting the air and contributing to asthma, preterm births and reduced lung function. Lawmakers voted last year to ban new drilling within 3,200 feet of homes, but the ban would do nothing to address existing wells — and it may never take effect. It’s paused through at least November 2024 after oil and gas producers secured enough signatures to send it to the ballot for voters to decide.
Another bill that would have made fossil fuel companies financially liable for the health problems of people living near wells died a quiet death in the Legislature in May, when a powerful lawmaker blocked the legislation from even getting a full vote.
“Fossil fuel executives have known for decades that drilling in neighborhoods puts our communities at risk,” said Nicole Rivera, government affairs director at the Climate Center, a Santa Rosa-based nonprofit, after the bill was defeated. “Instead of acting to protect public health and our shared climate, they’ve lobbied and spent millions of dollars convincing elected officials to look the other way.”
The political sparring over gas furnaces, water heaters and stoves has been equally intense.
Berkeley’s 2019 ban on gas hookups in new homes and businesses spurred a nationwide trend, with dozens of cities across the U.S. following its lead — including Los Angeles. The fossil fuel industry pushed back hard, led by the nation’s largest natural gas utility, Southern California Gas Co. A recent court ruling called into question the legality of some of the bans.
Will Californians be willing to give up cooking with gas? Will they support cutting down on fossil fuel production, even if doing so means higher prices at the pump? Can they learn to embrace a future of more densely populated, less car-centric cities?
And equally important: Will they vote for politicians determined to stand up to one of the world’s most powerful industries?
Because at the end of the day, the main barriers to climate action are more political than anything. Studies have shown we have most of the technologies we need to stop burning fossil fuels. The costs of clean energy have fallen dramatically. We know how to redesign our cities — and reshape our patterns of development — to get carbon pollution mostly under control.
The climate crisis is here to stay. How bad it gets is still up to us.
Ask a Reporter: Inside the project
What: Times reporters Rosanna Xia and Sammy Roth will discuss “Our Climate Change Challenge” during a live streaming conversation. City Editor Maria L. LaGanga moderates.
When: Sept. 19 at 6 p.m. Pacific.
Where: This free event will be live streaming. Sign up on Eventbrite for watch links and to share your questions and comments.
Business
Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case
In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.
The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.
The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.
Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.
Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”
Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.
Ms. Flynn said context mattered.
“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”
Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.
The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.
He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.
When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.
After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.
He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.
Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.
Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.
Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.
“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”
Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.
“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”
Business
SEC probes B. Riley loan to founder, deals with franchise group
B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for Chairman and co-founder Bryant Riley.
The Los Angeles-based investment firm and Riley each received additional subpoenas in November from the U.S. Securities and Exchange Commission seeking documents and information about Franchise Group, or FRG, the retail company that was once one of its biggest investments before its collapse last year, according to a long-delayed quarterly filing. The agency also wants to know more about Riley’s pledge of B. Riley shares as collateral for a personal loan, the filing shows.
B. Riley previously received SEC subpoenas in July for information about its dealings with ex-FRG chief executive Brian Kahn, part of a long-running probe that has rocked B. Riley and helped push its shares to their lowest in more than a decade. Bryant Riley, who founded the company in 1997 and built it into one of the biggest U.S. investment firms beyond Wall Street, has been forced to sell assets and raise cash to ease creditors’ concerns.
The firm and Riley “are responding to the subpoenas and are fully cooperating with the SEC,” according to the filing. The company said the subpoenas don’t mean the SEC has determined any violations of law have occurred.
Shares in B. Riley jumped more than 25% in New York trading after the company’s overdue quarterly filing gave investors their first formal look at the firm’s performance in more than half a year. The data included a net loss of more than $435 million for the three months ended June 30. The shares through Monday had plunged more than 80% in the past 12 months, trading for less than $4 each.
B. Riley and Kahn — a longstanding client and friend of Riley’s — teamed up in 2023 to take FRG private in a $2.8-billion deal. The transaction soon came under pressure when Kahn was tagged as an unindicted co-conspirator by authorities in the collapse of an unrelated hedge fund called Prophecy Asset Management, which led to a fraud conviction for one of the fund’s executives.
Kahn has said he didn’t do anything wrong, that he wasn’t aware of any fraud at Prophecy and that he was among those who lost money in the collapse. But federal investigations into his role have spilled over into his dealings with B. Riley and its chairman, who have said internal probes found they “had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates.”
FRG filed for Chapter 11 bankruptcy in November, a move that led to hundreds of millions of dollars of losses for B. Riley. The collapse made Riley “personally sick,” he said at the time.
One of the biggest financial problems to arise from the FRG deal was a loan that B. Riley made to Kahn for about $200 million, which was secured against FRG shares. With that company’s collapse into bankruptcy in November wiping out equity holders, the value of the remaining collateral for this debt has now dwindled to only about $2 million, the filing shows.
Griffin writes for Bloomberg.
Business
Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging
Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.
The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.
“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.
Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”
The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.
People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.
Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.
This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.
The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.
“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”
The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.
Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.
The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.
The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.
Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.
In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.
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