Bending the Climate Curve

Impact Reflection

The picture of climate change is coming into sharp focus this summer, with yellow, orange, red, and purple all over the weather maps on the news. Death Valley hit a global heat record of 134 degrees. Water off the coast of Florida was measured at over 100 degrees, setting a global seawater record. There have been extreme heat waves in India and the Middle East, a “heat storm” in Southern Europe, and a record-breaking 19-day streak of temperatures above 110 degrees in Phoenix, Arizona. In the past month, more than 5,000 heat records have been broken or tied in the US, and more than 10,000 records have been set globally.¹

Moving beyond the sensationalism of new heat records, it’s clear that we need to accelerate efforts to understand and adapt to a warming climate. We no longer need to imagine what a warmer world will be like; we are in the midst of it. The road ahead is one of acknowledging what’s happening and adapting our policies, our economy, and our day-to-day lives. We are experiencing very real change, and it is time to respond.

The discovery of oil and its uses in the late 19th and early 20th centuries accelerated industrial activity, as well as its impact on people’s lives and on the environment. A hundred years later, the negative impacts of our personal and infrastructural use of fossil fuels are becoming impossible to ignore. The transition from the late 20th into the early 21st century has given us an opportunity to steer our economy and our daily life toward a net positive rather than a net negative impact.

The scope of change needed in infrastructure, supply chain, and human capital is tremendous. Deliberate steps in both state and federal policy are already driving investment and creating change. Regulations requiring renewable energy production are now in place in 38 states, up from 29 five years ago. At the Federal level, the 2022 Inflation Reduction Act is rapidly providing a foundation for funding the acceleration in infrastructure that is needed to bend the curve of global temperature increase.

Government subsidy, primarily via tax credits, is starting to draw in significant amounts of financial capital from institutional and large private investors. Global climate investment is expected to top $1 trillion when the IRA provisions are supplemented by the European Union’s Green Deal and China’s low-carbon development initiatives announced in its latest five-year plan.² In a year of record heat, record funding for change is available not only for large projects but also for smaller, local initiatives that will impact our communities immediately.

Cities have not been designed to deal with the kind of extreme heat events we are currently experiencing. They tax power grids, increase the incidence of fatal heat strokes and related health care costs, and interrupt travel for people and transport of goods.³ The reality of driving to visit relatives takes on a new meaning in the transition to renewable energy. It requires a new, integrated renewable power grid to provide essential infrastructure that individual use of electric vehicles can plug into (pun intended).

Other smaller-scale adaptations are being used to ameliorate the impact of greater heat. Particularly in urban areas that absorb and re-emit more heat than natural landscapes, solutions are needed. Innovations such as painting roofs white or a reflective color can help air conditioning be up to 15% more efficient. Additional home remodeling choices include solar panel installation, replacing gas appliances with electric ones, and installing heat pumps instead of conventional HVAC systems.

Technical solutions to reduce emissions and slow climate change are creating an increasing number of investment choices for individuals that supplement government and institutional funding. Extreme weather is our new reality, and the choice to direct personal financial reserves in the service of a cooler and sustainable future has become a reality as well. Whether you are investing in heat pumps to replace your central air conditioning, or allocating a portion of your portfolio to promote energy efficiency at a broader level, there are opportunities to participate in the global effort at adaptation.

At North Berkeley, we work with clients on their needs to adapt on a personal level as well as address their desires to shape their portfolio in a way that adds to the momentum of broader positive change. All change is incremental, and our work necessarily builds on itself gradually over time, creating a throughline to a very different – and hopefully more sustainable – future.

We can only see so much of the next stretch of the road, but as we progress, we will eventually turn a corner that gives us more visibility and a different and more grounded optimism.

If you are interested in reading more about issues and opportunities for change in response to a warming climate, see our Climate Inflation article published in September 2022.

Resources

¹ National Oceanic and Atmospheric Administration (NOAA), cited in Seth Borenstein’s “Sick of hearing about record heat? Scientists say those numbers paint the picture of a warming world,” Associated Press, July 22, 2023.
² Higher Infrastructure Spending to Support China’s Environmental Targets, Sustainable Fitch.
³ See NOAA note above.