Climate Crisis May Cause the Next Financial Crisis
The mounting climate emergency may spur the next global financial crisis and the world's central banks are woefully ill equipped to handle the consequences, according to a new book-length report by the Bank for International Settlements (BIS), as S&P Global reported. Located in Basel, Switzerland, the BIS is an umbrella organization for the world's central banks.
The report, titled The Green Swan, which plays on the idea of a "black swan" even warned that the climate crisis could have a potentially seismic effect on the world's financial system and that central banks do not have the tools to handle it, as Reuters reported.
"Climate change poses unprecedented challenges to human societies, and our community of central banks and supervisors cannot consider itself immune to the risks ahead of us," François Villeroy de Galhau, governor of the Banque de France, said in the report, as The New York Times reported.
The world's markets are in a bind. To limit global warming to less than 1.5 degrees Celsius requires leaving a large proportion of fossil fuel reserves in the ground, which creates a potential risk for the value of energy companies and the broader financial system. Yet, extracting those fossil fuels will almost surely push the world past the 1.5 degrees Celsius threshold, as S&P Global reported.
If temperatures continue to rise, the world is at risk from global sea-level rise, which will flood many coastal cities, while brutal droughts will make other parts of the world uninhabitable, as Reuters reported.
Already, the world has the number of extreme weather events quadruple of the last four decades. The report warns that the financial markets are not protected against climate-induced losses. Only 44 percent of the write-downs caused by extreme weather events are now covered in the U.S. In Asia it's just 8 percent and in Africa only 3 percent, according to Reuters.
"I think we might be on the brink of observing something that might be behind the next systemic financial crisis," Luiz Awazu Pereira Da Silva, one of the book's main authors, told reporters, as Reuters reported.
The report also warned that central banks, which spent the last decade pulling their countries out of a deep financial crisis, may spend the next decade coping with disruptions from the climate crisis, as The New York Times reported.
The paper warned that central banks may be called on to bail out many communities that are devastated by climate emergencies.
"In the worst-case scenario, central banks may have to confront a situation where they are called upon by their local constituencies to intervene as climate rescuers of last resort," the report said. "Fundamentally, climate-related risks will remain largely uninsurable or unable to be hedged as long as system-wide action is not taken."
The European Central Bank is starting to grapple with climate-related issues, according to The New York Times. The new president of the European Central Bank has pledged to put the climate crisis at the forefront of the bank's decisions.
"While we might not be ahead of the curve yet, we are not sitting on our bottoms doing nothing," Ms. Lagarde said during a news conference on Thursday, as The New York Times. "It is going to be an important matter that will be debated during the strategy review."
She noted that bank's employee pension fund is shifting investment to companies with lower carbon dioxide emissions.
Environmental activists who have campaigned to divest from fossil fuels took to Twitter to highlight the report's findings. Bill McKibben, the founder of 350.org, rewrote The New York Times headline "Climate Change Could Cause the Next Financial Meltdown." Instead, he edited it to, "Financial Systems Could Cause the Next Financial Meltdown," as Common Dreams reported.
Since the banks fund the fossil fuel system, this is really a way of saying 'Financial systems Could Cause the Nex… https://t.co/LcA6ocTV2X— Bill McKibben (@Bill McKibben)1579786306.0
"A new global financial crisis triggered by climate change would render central banks and financial supervisors powerless," the BIS said. "We cannot be the only game in town."
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On Friday, China set out an economic blueprint for the next five years, which was expected to substantiate the goal set out last fall by President Xi Jinping for the country to reach net-zero emissions before 2060 and hit peak emissions by 2030.
The Great Trail in Canada is recognized as the world's longest recreational trail for hiking, biking, and cross-country skiing. Created by the Trans Canada Trail (TCT) and various partners, The Great Trail consists of a series of smaller, interconnected routes that stretch from St. John's to Vancouver and even into the Yukon and Northwest Territories. It took nearly 25 years to connect the 27,000 kilometers of greenway in ways that were safe and accessible to hikers. Now, thanks to a new partnership with the Canadian Paralympic Committee and AccessNow, the TCT is increasing accessibility throughout The Great Trail for people with disabilities.
Trans Canada Trail and AccessNow partnership for AccessOutdoors / Trails for All project. Mapping day at Stanley Park Seawall in Vancouver, British Columbia with Richard Peter. Alexa Fernando<p>This partnership also comes at a time when access to outdoor recreation is more important to Canadian citizens than ever. <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/200527/dq200527b-eng.htm" target="_blank" rel="noopener noreferrer">Studies from the spring of 2020</a> indicate that Canadian's <a href="https://www.bnnbloomberg.ca/moneytalk-mental-health-during-covid-19-1.1567633" target="_blank" rel="noopener noreferrer">mental health has worsened</a> since the onset of social distancing protocols due to COVID-19. </p><p>The <a href="https://www.mayoclinic.org/diseases-conditions/coronavirus/in-depth/safe-activities-during-covid19/art-20489385" target="_blank" rel="noopener noreferrer">Mayo Clinic</a> lists hiking, biking, and skiing as safe activities during COVID-19. Their website explains, "When you're outside, fresh air is constantly moving, dispersing these droplets. So you're less likely to breathe in enough of the respiratory droplets containing the virus that causes COVID-19 to become infected."</p><p>TCT leadership took this into consideration when embarking on the accessibility project. McMahon explains that there has never been a more important time to bring accessibility to the great outdoors: "Canadians have told us that during these difficult times, they value access to natural spaces to stay active, take care of their mental health, and socially connect with others while respecting physical distancing and public health directives. This partnership is incredibly important especially now as trails have become a lifeline for Canadians."</p><p>Together, these organizations are paving the way for better physical and mental health among all Canadians. To learn more about the TCT's mission and initiatives, check out their <a href="https://thegreattrail.ca/stories/" target="_blank">trail stories</a> and <a href="https://thegreattrail.ca/wp-content/uploads/2021/01/TCT_2020-Donor-Impact-Report_EN_8.5x14-web.pdf" target="_blank">2020 Impact Report</a>.</p>
By Kiyoshi Kurokawa and Najmedin Meshkati
Ten years ago, on March 11, 2011, the biggest recorded earthquake in Japanese history hit the country's northeast coast. It was followed by a tsunami that traveled up to 6 miles inland, reaching heights of over 140 feet in some areas and sweeping entire towns away in seconds.
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="c5a625c9013ad84ea4c23c52181dde22"><iframe lazy-loadable="true" src="https://www.youtube.com/embed/ZK8UBHMo04U?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
Nuclear power generates about 10% of the world's electricity (TWh = terawatt-hours). About 50 new plants are under construction, but many operating plants are aging. World Nuclear Association / CC BY-ND
<div id="07c42" class="rm-shortcode" data-rm-shortcode-id="ac2be7bdc1a748c089d24d27f01992a2"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1366694917045690369" data-partner="rebelmouse"><div style="margin:1em 0">🇸🇪 Nuclear Safety statement in IAEA BoG: Important safety upgrades introduced at 6 remaining nuclear power stations… https://t.co/FrgHv4N4UL</div> — SwedenUN Vienna 🇸🇪 (@SwedenUN Vienna 🇸🇪)<a href="https://twitter.com/SwedenUN_Vienna/statuses/1366694917045690369">1614680434.0</a></blockquote></div>
Author Najmedin Meshkati holding an earthquake railing in a Fukushima Daiichi control room during a 2012 site visit. Najmedin Meshkati / CC BY-ND
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"Watch. Connect. Take Action."
These words are the invitation and mandate of the WaterBear Network, a free film-streaming platform that launched in November of 2020. Its goal is to turn inspirational images of the natural world into actions to save it.
WaterBear CEO Ellen Windemuth uses films to inspire planet-positive actions. WaterBear
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