Finance

Regulators take first steps to head off a climate financial crisis

Published

7 months ago

October 25, 2023

Regulators take first steps to head off a climate financial crisis

The U.S. financial system just took its first significant step to head off risks of a potential global warming-related financial meltdown.

On Tuesday, three major federal financial regulators released joint guidelines on the steps banks must take to prepare for a climatic assault on their balance sheets.

The potential risks are dire, wrote representatives of the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

The regulators focused on two ways that a warming climate could lead to financial upheaval. The first was physical damage from floods, fires and storms, while the second involved the “transition risk” related to broad economic changes and slow shifts away from fossil fuels.

In both cases, these “pose an emerging risk to the safety and soundness of financial institutions and the financial stability of the United States,” the agencies wrote.

The three regulators collectively called on bank boards to take concrete steps to “control [their] exposure” to the financial risks of climate change.

The regulators also urged banks to conduct a “scenario analysis,” in which they would forecast what could happen to their investments — and, by extension, the deposits they hold — under circumstances of extreme climate disruption.

Progressive watchdog group Public Citizen offered qualified praise of the new guidelines.

“These principles have taken far too long to produce, but they are a solid start,” group climate director David Arkush said in an emailed statement.

But Arkush noted that the devil would be in the details.

For example, he called on federal regulators to give banks more specific guidance on what kind of climate scenarios to incorporate, as well as how to create “credible” strategies to meet their decarbonization goals.

Republicans have long equated proposed guardrails around climate risk with an assault on U.S. oil and gas, and GOP congressional members attacked the new proposal.

“Banks were not created to be arbiters of public policy, but now environmental activists have seized our nation’s financial regulators and are inserting their political preferences into the equation,” Sen. Kevin Cramer (R-N.D.) said in a statement.

Cramer cited North Dakota’s “innovative clean-energy” solutions as evidence that such guidelines are unnecessary. The state gets about 6 percent of its energy from renewables, which include carbon-emitting biofuels.

For the sake of comparison, the state gets 8 percent of its energy from coal, and the lion’s share of the rest from oil and gas.

But the agencies said that they had stayed far away from activism.

They emphasized in their statement, for example, that they had ignored public comments calling for them to “promote a transition to a lower carbon economy” — something that they argued went beyond regulators’ role.

If banks wanted to keep funding oil and gas, regulators implied, that was their business — so long as the risks were properly accounted for.

“If banking regulators and the Financial Stability Oversight Council pick up the pace, they might still prevent climate-related financial crises,” Arkush said.

Welcome to The Hill’s Sustainability newsletter, we’re Saul Elbein and Sharon Udasin — every week we follow the latest moves in the growing battle over sustainability in the U.S. and around the world.

Latest news impacting sustainability this week and beyond:

A striking majority of poll respondents oppose congressional Republicans’ plans to repurpose conservation funding for non-climate-related farm bill programs. In a poll released exclusively to The Hill on Tuesday, voters across six leading agriculture states opposed those plans by a ratio of 3 to 1. And despite the fact that the GOP is the party pushing to repurpose the conservation funds, likely Republican voters opposed …

Certain types of “forever chemicals” may be associated with a heightened risk of developing thyroid cancer, a new study has found. While scientists have previously identified exposure to these compounds, known as PFAS, as a potential contributor to recent surges in thyroid cancer, limited research has investigated the association in human populations, the authors noted. “We wanted to dive into the potential environmental factors …

California Gov. Gavin Newsom (D) reinforced his state’s commitment to collaborating with China on climate issues on the first day of his trip to the country on Monday. “The long-standing partnership — and competition — between California and China has led to measurable progress,” Newsom said in a statement at the end of that day. The governor, who spent Monday at Hong Kong University, referred to California-China collaborations …

The moon’s violent birth may have happened 40 million years earlier than scientists previously thought. That finding is based on remnants of molten crystals recovered from the moon’s surface, according to a study published Monday in Geochemical Perspectives Letters. These slivers of radioactive zircon are almost infinitesimally small — so tiny they must be evaluated atom by atom. But they contain …

Wildlife hunting in China could endanger global health

Illegal hunting and trade practices in China are not only imperiling domestic biodiversity, but they also pose a threat to global public health, a new study has found.

Since such lawless activity is common nationwide, so too is the prospect of disease transmission from hunted animals to people, according to the study, published on Wednesday in Nature.

International threat: The risk of such disease propagation — which scientists assume contributed to the coronavirus outbreak — does not stop at China’s borders, the study authors warned.

“The rest of the world should also be concerned,” corresponding author David Wilcove, a professor of ecology, evolutionary biology and public affairs at Princeton University, said in a statement.

Crossing borders: Biodiversity loss in China means biodiversity loss for the entire world, Wilcove noted.

In addition, there is no reason to assume that this problem is unique to China, he said.
As far as diseases are concerned, wildlife trade-related outbreaks “have the potential to escape the borders of any one country,” he added.

Reading between the lines: To understand the extent of both threats, the researchers used Chinese court documents that detailed convictions for illegal hunting around the country.

They then created a series of models to estimate how much illegal hunting is actually occurring — including instances that are not getting caught.

Endangered animals in the mix: The court documents showed a total of 9,256 convictions for the illegal hunting of more than 3 million individual animals from 2014 to 2020, according to the study.

These animals included representatives of more than 20 percent of China’s bird, mammal, reptile and amphibian species.
Nearly a quarter of the species in these categories were endangered.

‘The tip of the iceberg’: “We were very surprised by the large number of species that were illegally hunted in the space of just six years,” lead author Dan Liang, an associate research scholar at Princeton’s School of Public and International Affairs Center, said in a statement.

Because these results are only a small fraction of total hunting incidents, the findings represent just “the tip of the iceberg,” according to Wilcove.
“And so, we then applied various statistical methods to show that, in fact, the iceberg is very large indeed,” Wilcove added.

Accounting for future threats: By extrapolating from their data, the authors assumed that 10 percent of all illegal hunting incidents were detected and prosecuted.

They concluded that at least 28 percent of China’s native terrestrial vertebrates, including 40 percent of its birds, may have been among those taken.
The scientists also identified another 781 species, of which about 90 percent were threatened, that would likely be targeted by hunters over the next six years.

Some positive action underway: Stressing that illegal hunting is a clear threat to China’s wildlife, Liang also recognized the country’s progress in addressing the issue.

The government amended its protected animals list by adding 517 species, including 31 endangered ones.
During the early days of the pandemic, the country also enacted a ban on the consumption of “wild-caught species.”

A complex quest: But hunting and trade remains common and is most concentrated near urban centers — likely for commercial and resale purposes, the authors noted.

“Illegal activities are inherently very difficult to study because, by definition, people don’t talk about them or practice them out in the open,” Wilcove said.

“It’s quite a scientific challenge,” he added.

Upcoming news themes and events we’re watching:

Representatives of countries that house the world’s major tropical forests — like Brazil, Indonesia and the Democratic Republic of Congo — will meet on Thursday in Brazzaville, Congo, at the Three Basins Summit. Participating nations from the Amazon, Congo and Borneo-Mekong basins intend to create a “global alliance of ecosystems” among Southern Hemisphere countries.
Also on Thursday, the Senate Energy Committee will hold a hearing on the future of federal offshore energy, which will likely include proposals for expanding offshore wind, oil and gas.

Branch out with different reads from The Hill:

Local and state headlines on sustainability issues:

Maryland researchers invented two new apples to withstand climate change (The Washington Post)
Inside Poland Spring’s Hidden Attack on Water Rules It Didn’t Like (The New York Times)
Climate change impacting overnight temperatures in Phoenix (ABC15 Arizona)

Sustainability news we’ve flagged from other outlets:

Vivaldi‘s Four Seasons gets climate change makeover (Reuters)
European Union Advances Mandatory ESG Reporting Standards (The National Law Review)
Ancient rock carvings revealed by receding Amazon waters amid drought (The Guardian)

What Others are Reading

More stories on The Hill right now:

Opinions related to sustainability submitted to The Hill:

You’re all caught up. See you next week!

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Finance

Rana Abbasova, Adams aide whose home was raided, is cooperating with feds’ campaign finance probe

Published

6 hours ago

May 21, 2024

Press Room

Rana Abbasova, Adams aide whose home was raided, is cooperating with feds’ campaign finance probe

An aide to Mayor Adams whose home was raided amid an FBI probe into his 2021 campaign is cooperating with federal authorities, a source with knowledge of the matter said Monday.

The aide, Rana Abbasova, is one of several people whose residence was raided as the feds probe allegations that the Turkish government funneled illegal cash into Adams’ campaign through straw donors.

The mayor has not been accused of any wrongdoing and strongly denies any suggestion of impropriety in connection with the investigation.

It’s unclear what Abbasova may have discussed with the feds, though her cooperation pertains to the general allegation of illegal Turkish government-financed contributions to the mayor’s campaign, according to The New York Times, which first reported her cooperation. Her lawyer Rachel Maimin declined to comment.

Brendan McGuire, the mayor’s former chief counsel at City Hall who now represents him and his 2021 campaign in the FBI investigation, confirmed Abbasova’s cooperation, but said it’s “not a new or meaningful development.”

Abbasova, the director of protocol in Adams’ International Affairs Office and the mayor’s unofficial liaison to the local Turkish community, was put on unpaid leave days after her home was raided in November, according to two sources with knowledge of the matter. She remains on unpaid leave, and her position at City Hall has not been filled, they added.

The sources spoke on condition of anonymity due to the sensitive nature of the Adams campaign probe, which burst into the headlines when the home of the mayor’s chief campaign fundraiser, Brianna Suggs, was raided in November. Days later, Adams had his own electronic devices seized by the feds.

Abbasova received three tickets in New Jersey in January for offenses linked to driving a for-hire vehicle, the Daily News previously reported.

While she’s been on unpaid leave, another Adams aide targeted by the feds in a separate matter went on paid sick leave after her Bronx homes were raided in February. That aide, Winnie Greco, has since returned to work at City Hall, receiving a raise earlier this month.

McGuire noted the mayor’s administration reported to investigators late last year that Abbasova had engaged in “improper conduct.” Sources confirmed at the time that the conduct in question was Abbasova instructing other Adams staffers to delete text messages they’d exchanged with her.

“It is our understanding that Ms. Abbasova has been talking to investigators since her improper conduct was reported by the administration in November,” McGuire said in a Monday night statement.

Finance

Trends in residential solar finance, equipment and maintenance

Published

13 hours ago

May 20, 2024

Press Room

Solar informational site SolarReviews released its annual survey, sharing results gathered from a group mostly represented by residential solar installers, as well as commercial installers, equipment providers, and utility-scale installers. SolarReviews operates a Solar Calculator that enables prospective customers to have a snapshot of the benefits of adding solar to their roof based on customized data for their area.

Finance

With higher financing costs industry-wide, 54% of U.S. installers said customers were less likely to take a solar loan over the past year, while cash deals are up. About 49% of sales reported were cash deals, while 41% were loans. HELOC, PACE loans, power purchase agreements, and leases combined for 10% of reported solar sales.

The top financing providers used were Credithuman (15%), Mosaic (14%), Sunlight Financial (9%),Dividend (8%), and Clean Energy Credit Union (8%).

Typical loans for loaned systems varied widely depending on whether dealer fees were assigned. Average terms are seen below.

Image: SolarReviews

Heightened cost of finance has pressed the residential solar industry. About half (49%) of installers said demand went down in 2023 versus 2022.

In California, where rates paid for exporting solar production to the grid were slashed by about 80%, about 69% of installers reported lower sales in California in 2023 versus 2022. However, 68% of installers reported including battery energy storage with their solar installation, about double the national average. Installers report a median payback period of eight years for solar systems with a battery, while standalone solar systems have a longer median payback period of about 10 years.

California was not the only state to cut rates for solar exports, a process known as net metering. Georgia, Arizona, Kansas, Arkansas, and Wisconsin all noted an increase in installed systems not tied to a net metering agreement.

Top products

As for the top equipment brands in residential solar, SolarReviews surveyed installers based on five criteria of performance and quality, brand name reputation, product warranty, pricing, and product availability from distributors. Based on the five criteria, SolarReviews listed Qcells as the top performing panel brand.

Installers said the top five most-used panels were Qcells (53%), REC (41%), Canadian Solar (35%), Mission Solar (29%), and JinkoSolar (20%). About 19% of solar installers offer one panel brand, while the majority provide alternative options to meet the needs of their customers.

For inverters, the top five most-used were Enphase (62%), SolarEdge (43%), SMA (23%), Sol-Ark (21%), and Tesla (21%). Tesla made a notable leap up into the top five, gaining a larger market share than Fronius and Generac.

Enphase was also listed as the most commonly used battery energy storage provider, offered by 46% of installers. This was followed by Tesla (42%), SolarEdge (35%), FranklinWH (29%), and Fortress Power (18%). A sizeable market share was also held by SunPower, Generac, LG Energy Solution, and HomeGrid.

Maintenance

Given that solar is often a 25-year investment, post-installation services are a critical feature in a solar agreement. About 96% of installers have access to system monitoring, while 63% said they proactively check their customers’ installations at least once per quarter to ensure they are working.

The most common reasons for service, in order, were inverter hardware failures and replacement, inverter software and setup issues, battery software updates, communications and monitoring fixes, roof leaks, battery hardware failure or replacement, wiring issues, and broken or underperforming panels.

“Fortunately, when issues do occur, they are often covered by some type of warranty, leaving only 15% of cases where the customer is responsible for repair costs,” said SolarReviews.

Outlook

The residential solar industry looks to recover from a rocky 2023, where growth was slowed by high finance costs and unfavorable policy changes like the reduction of net metering rates.

“Some solar businesses are still reeling from the events of 2023. 22% of solar businesses say they have concerns that make them unsure whether they can stay in business in the coming six months,” said SolarReviews.

Despite this uncertainty, residential solar installers appear to have a good outlook for 2024. About 54% of surveyed installers said they expect to sell more solar in 2024, and an additional 23% said they think they will be able to maintain the same level of business next year.

Notably, surveyed installers listed pv magazine as the top trusted media platform for solar news and analysis, with 52% responding we are the preferred source. The marks the second year in a row as the most-trusted media source. We thank you for your continued readership.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Finance

Crow Wing County is nationally recognized for financial reporting

Published

20 hours ago

May 20, 2024

Press Room

Crow Wing County is nationally recognized for financial reporting

BRAINERD — For the 10th consecutive year, Crow Wing County was awarded the Certificate of Achievement for Excellence in Financial Reporting and the Award for Outstanding Achievement in Popular Financial Reporting.

The Certificate of Achievement is the highest form of recognition in the area of governmental and financial reporting. The honor is given out by the Government Finance Officers Association of the United States and Canada.

The Certificate for Excellence in Financial Reporting was awarded to Crow Wing County for its 2022 Comprehensive Annual Financial Report compiled in 2023.

The award represents a significant accomplishment by a government and its management, the county noted in a news release.

“This is a testament to the type of work that is being done in our Finance Department,” said Finance Director Nancy Malecha. “This award recognizes our commitment in ensuring that our financial data and information is reported accurately, timely and provides transparency that the taxpayers of Crow Wing County deserve.”

Crow Wing County is one of only 16 counties in Minnesota to have earned this award.

The Award for Outstanding Achievement in Popular Financial Reporting was awarded to Crow Wing County for its 2022 Popular Annual Financial Report.

The annual report extracts information from the Comprehensive Annual Financial Report and summarizes the financial position of the county in a simple, easy to read format. Crow Wing County is one of five counties in Minnesota that have received the national award.

Financial reports are available on the Crow Wing County website at

www.crowwing.gov/771/Financial-Statements

Our newsroom occasionally reports stories under a byline of “staff.” Often, the “staff” byline is used when rewriting basic news briefs that originate from official sources, such as a city press release about a road closure, and which require little or no reporting. At times, this byline is used when a news story includes numerous authors or when the story is formed by aggregating previously reported news from various sources. If outside sources are used, it is noted within the story.

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