You Asked Us: What can Joe Biden do for the environment?

Our expert panel:

Joyce Coffee, Founder and President, Climate Resilience Consulting

Daniel Kreeger, Co-founder and Executive Director, Association of Climate Change Officers

Decarbonisation targets are easy enough to define. But how challenging is it to accurately measure progress?

Daniel Kreeger: At the international level, the resources available with which to measure emissions are not consistent from country-to-country. The United States has a wide array of satellites, and atmospheric and oceanic equipment deployed worldwide. Most other nations don’t. Additionally, those countries will need to maintain regulatory or legal frameworks in place to collect data from their largest greenhouse gas (GHG) emitters. A growing number of countries may have put frameworks in place, but certainly not enough. Globally focused assessments generated by the IPCC will continue to give a good sense of what is actually being emitted, but not at the national or subnational level.

Once we begin to look at measuring progress of the commitments being made by businesses, universities and subnational governments, there is a different set of challenges. GHG data from certain categories of activities require a lot of “guesstimation” – for instance, when looking at emissions from employee commuting and the supply chain. Most private sector companies are going to have very large footprints outside of their organisational and operational control. That leaves them dependent upon other organisations for data and reduction efforts. To some degree, they may be able to exert influence on those in their value chain, but that is still a substantial challenge.

Budgetary and resource restrictions dictate that most local governments will not have specialised personnel devoted to accounting for and reducing emissions. Those governments will benefit from forming regional collaborations to aggregate their interests and share resources.

During the webinar, the panel spent some time talking about social inclusion. Could you expand on the ways in which the climate emergency intersects with social and equity issues?

Joyce Coffee: There is a differential climate vulnerability and exposure risk faced by poorer places. Internationally, the Global Adaptation Initiative's GAIN Index suggests a disproportionate risk to countries with lower economic, social and governance readiness. In the US, studies show that the poorest one-third of U.S. counties sustain greater economic hardship from hurricanes, rising seas and higher temperatures than their wealthier counterparts.

US federal disaster money favours the rich. As disaster costs rise, so does inequality. Between 1999 and 2013, in counties where federal funds were allocated after hazards had caused damages of at least US$10bn, white households gained, on average, US$126,000 in wealth. By comparison, black households lost an average of US$27,000 in wealth and Hispanic households lost US$29,000.

Government cost benefit systems also increase inequity. For instance, the US Army Corps of Engineers determines project prioritization based on the value of assets at risk. This, clearly, benefits wealthy areas.

Government action is, of course, much needed. But what about the responsibilities of the private sector – particularly finance? How can we best measure a return-on-investment that looks beyond financial returns to include environmental and social dividends?

DK: For the investment community, the existential questions centre around incorporating climate change, environment and social issues into conversations around return-on-investment. On one side, there is a question as to what the actual risks of investment are. This is such a difficult thing for us to get our arms around. How does an investor determine which one of five companies in the same sector is best equipped to deal with, and thrive in, a changing climate? The Task Force for Climate-Related Financial Disclosures was established to look at this issue. Progress, yes – but there are a lot of questions still to be answered. Which climate change scenarios should be disclosed? What implications? How much of the value chain is material?

On the other side, how do we incorporate climate change, environmental and social considerations into lending activities? Financial institutions are increasingly making commitments to loan less money to fossil fuel activities and direct lending into renewable energy projects, but that isn’t enough. Any lender’s primary objective is to gain a return on their investment. The challenge of incorporating responsibility into this calculation is substantial – after all, the lender doesn’t (necessarily) have a social good mission. That is generally the responsibility of government. My sense is that one of two things will need to happen. Either governments will need to regulate and/or incentivise behaviours. Or we will need to rewrite our “social contract” with the private sector. Big questions to address, for sure.