Re: Global Warming: Wall St Investors Now Sounding Like Sierra Club

Great article. When business gets the point, more Republicans will
listen....


On Wed, 28 Sep 2005 13:34:45 -0500, "Harry Thompson" <me@xxxxxxxxxxx>
wrote:

>I can't wait to see what our retired petroleum engineers in this newsgroup
>have to say about this article.
>
>Hap
>
>http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=INIY650D9L35#
>
> Bloomberg Washington Report
>
>Bush Faces Wall Street Pressure on Global Warming (Update1)
>By Kim Chipman
>
>Sept. 28 (Bloomberg) -- The deadliest U.S. hurricane season in more than a
>century has some Wall Street investors sounding like members of the Sierra
>Club.
>
>Firms including Goldman Sachs Group Inc. and JPMorgan Chase & Co. are
>telling U.S. clients for the first time that climate change poses financial
>risks. With damage estimates for Hurricanes Katrina and Rita as high as $200
>billion, an increasing number of investors are joining public pension funds
>in urging action on global warming, which scientists say may be making
>storms more powerful.
>
>``Definitely there will be more attention paid on Wall Street to natural
>disasters and global warming,'' said Michael Johnston, a New York-based
>investment strategist at Capital Group Cos., the third-largest U.S.
>mutual-fund firm, which manages more than $1 trillion.
>
>Katrina hit the Gulf Coast on Aug. 29, followed three weeks later by Rita,
>which at its peak was the third-most-intense Atlantic hurricane ever. The
>devastation disrupted energy supplies, and insurers and economists say they
>worry about another big storm hitting this year.
>
>``Katrina is going to be a big stimulus for Washington to act,'' said Morton
>Cohen, a hedge fund manager at Cleveland- based Clarion Group, which manages
>$200 million in assets, almost half of which are energy-related. ``It's
>pretty obvious we have to do something about building refineries in this
>country and diminishing our amount of coal-burning toxins.''
>
>President George W. Bush has questioned the science behind climate change
>and rejected calls for a mandatory federal cap on carbon dioxide and other
>greenhouse gases.
>
>`A Little Spooked'
>
>Katrina will make Bush's opposition to mandatory limits harder to defend,
>some say. The idea that hurricanes are becoming more devastating in the Gulf
>``is difficult to avoid,'' Neil McMahon, a London-based oil industry analyst
>at Sanford C. Bernstein & Co., said in a Sept. 2 report to clients. ``More
>worryingly, recent research suggests that this trend is highly likely to
>continue as it's linked to global warming.''
>
>While a single storm can't be directly linked to climate change,
>environmental advocacy groups such as San Francisco- based Sierra Club point
>to recent studies showing that rising sea temperatures are causing more
>ferocious storms.
>
>Storm Intensity
>
>Kerry Emanuel, a climate professor at the Massachusetts Institute of
>Technology in Cambridge, wrote in the journal Nature last month that storm
>intensity has risen by 50 percent over the past half-century as ocean
>temperatures have risen.
>
>``The potential for damage is much larger than we've seen in the past,''
>said Theodore Roosevelt IV, 62, a Lehman Brothers Inc. managing director in
>New York and great-grandson of the 26th U.S. president. ``The markets are a
>little spooked about our refining capacity and our ability to pump for oil
>in the Gulf of Mexico.''
>
>Possible steps to curb greenhouse gases include a mandatory carbon emissions
>limit that would require companies to install new equipment and possibly
>revamp operations; a carbon emissions-trading program; and a renewable
>energy initiative, already adopted by several states, that calls for a
>certain percentage of power supplies to come from wind or other alternative
>sources.
>
>Kyoto Protocol
>
>The expense of such steps gives some investors and politicians pause, said
>John Holdren, environmental studies professor at Harvard University in
>Cambridge, Massachusetts. ``The real consequences are far away,'' Holdren
>said. ``The cost of doing something is immediate. There's a strong
>temptation to say `wait and see.'''
>
>``Analysts are worried about the next 12 hours; climate change is way too
>long-term for them,'' said William Andrews, who manages about $4.5 billion
>at C.S. McKee & Co. in Pittsburgh, including Chevron Corp. shares.
>
>Democratic President Bill Clinton, whose administration agreed to the 1997
>Kyoto Protocol mandating greenhouse-gas emissions cuts, never submitted the
>accord to a Senate vote because countries like China and India weren't
>covered, and opposition to the accord among lawmakers was overwhelming.
>
>Bush rejected the Kyoto accord in 2001, saying it would cost the U.S. 5
>million jobs. Since then, he's touted voluntary reductions, incentive
>measures and ``market-based'' programs.
>
>`In a Box'
>
>The concerns on Wall Street may step up pressure on Bush to drop or soften
>his opposition.
>
>``The Bush administration has gotten itself in a box,'' said Marc Levinson,
>a JPMorgan Chase economist in New York. ``It continues to say global warming
>may not really be a problem, even though by now almost everyone who has
>seriously looked at the issue says this is a problem.'''
>
>Even before Katrina flooded 80 percent of New Orleans, Goldman's chief
>investment strategist, Abby Joseph Cohen, was signaling a shift on Wall
>Street.
>
>``Environmental issues, in particular climate change, are receiving
>increased focus from the investment community,'' Cohen said in an Aug. 26
>report to clients.
>
>Utilities including Exelon Corp. and lawmakers including Senator John
>McCain, an Arizona Republican, support national limits on greenhouse
>emissions.
>
>McCain-Lieberman Measure
>
>McCain, along with Senator Joseph Lieberman, a Connecticut Democrat, tried
>to push through legislation earlier this year that would reduce emissions to
>their 2000 level by 2010. While the measure failed, McCain said in June that
>eventually ``we will win'' because ``climate change is real.''
>
>Bush likely will have to tackle climate change head-on at some point, said
>Barry Abramson, a utility industry analyst who helps manage $28 billion at
>Gabelli Asset Management in Rye, New York.
>
>``It does appear that the scientific evidence is increasing, as well as
>pressure from other companies and prominent politicians in the U.S.,'' he
>said. ``The storms have people thinking, and that continues to ramp up the
>pressure.''
>
>Companies such as Chicago-based Exelon and Fairfield, Connecticut-based
>General Electric Co. say they want federal guidelines so they can map
>strategies for future expansion. They also want to avoid the confusion of
>complying with various state emissions rules.
>
>Carbon-Related Risks
>
>Responding to pressure from pension funds and other investors, companies are
>factoring climate change into the risks and opportunities faced by their
>businesses, according to the Carbon Disclosure Project, a group of 155
>institutional investors who oversee $21 trillion.
>
>The group, which includes the California Public Employees' Retirement
>System, the largest U.S. public pension fund, got 60 percent of the largest
>U.S. companies to participate in its annual study, reporting their emissions
>and their plans to reduce them. Calpers is among a group of funds overseeing
>$3 trillion in assets that in April pledged to invest $1 billion in
>companies that reduce greenhouse-gas emissions.
>
>Calpers is talking to the U.S. Securities and Exchange Commission about
>requiring companies to disclose their carbon- related risks, said Winston
>Hickox, Sacramento-based portfolio manager for environmental initiatives and
>former head the California Environmental Protection Agency.
>
>Hickox said it's ``just a matter of time'' before the White House catches up
>with states, companies and investors and ``gets serious'' about climate
>change.
>
>©2005 Bloomberg L.P. All rights reserved.
>
.

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