WHY HAVEN’T WE HARDENED THE GRID? — After a powerful hurricane plunged Louisiana into prolonged darkness, utility Entergy Corp. launched a plan to harden its power network to withstand devastating winds.
The storm was Hurricane Betsy and it was 1965. Billions of dollars later, Hurricane Ida was still able to tear through the state’s electric infrastructure.
The infrastructure bill now before Congress includes $73 billion to improve the grid. But riskier wildfires, floods and storms mean that building resilience into the electrical system is pricier than ever and the money might not be enough.
After Betsy, Entergy retrofitted structures along the coast and over major highways with concrete or steel poles. New substations were built outside 100-year flood plains.
It worked. When Hurricanes Katrina and Rita struck, 99 percent of structures within 20 miles of the Louisiana and Texas coastlines survived the winds.
And yet, Hurricane Ida toppled a key transmission tower into the Mississippi River that had passed an inspection just last year. The damage left New Orleans with no way to deliver power to homes and businesses.
Entergy has invested billions of dollars in the grid in just the past decade and plans to spend another $2.4 billion through 2022. In 2020, it completed a $100 million project to strengthen substations.
But there’s no guarantee those investments will be a match for more powerful and frequent storms. Last year, Hurricane Laura destroyed nearly 500 transmission line structures, a “large majority” of Entergy’s system.
This time, it will take weeks for the hardest-hit parts of New Orleans to recover from Ida. Entergy Louisiana President and CEO Phillip May called it a rebuild, not a repair.
U.S. Rep. Troy Carter, a Democrat who represents New Orleans, wants the city’s power lines buried underground, a project he said could be funded under the federal Stafford Act, which governs disaster spending, or with infrastructure legislation. Both options would increase grid reliability without passing costs to ratepayers.
“We know we’re going to have hurricanes,” Carter said, “and every year we put good money after bad putting our infrastructure above ground.”
Burying lines is just one approach. Some groups want Entergy to build more local power generation and deploy distributed resources such as solar and battery storage.
Then there’s this question: What system failures are foreseeable and preventable? The calculation constantly is being fine-tuned. Ultimately, it’s a measure of risk and what a utility — and ratepayers — are willing to spend to mitigate it.
Regulators are likely to investigate Ida’s impact on the power grid. They’ll need to determine whether our existing standards are enough.
Read more from POLITICO’s Catherine Morehouse and Kelsey Tamborrino.
President Joe Biden, in Louisiana on Friday to survey the damage, called for strengthening the grid. Today, he travels to New York and New Jersey, where Ida flooding has killed 44 people.
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YOU HEARD IT HERE FIRST — The physical effects of climate change — think flooded buildings, disrupted supply chains and the loss of human lives — could pose a $250 billion risk to the largest U.S. banks.
That’s the bottom-line finding of a forthcoming report from investor network Ceres, which said banks should conduct climate stress tests and take a page from insurers by collecting granular, asset-level data about exposure.
It’s no secret that climate change threatens homes, businesses, crops and lives, but studies show that financial markets have yet to price in the risk. A mortgage on a flood-prone house, for example, typically costs no more than one on dry land.
Ominous footnote: Insurance could shift some of the risk away from banks, but “future insurability of assets is uncertain,” the report found.
Federal and state regulators are working on the problem, but banks shouldn’t wait to be told what to do, Ceres concluded. Look for the full report Wednesday.
BTW, billion-dollar disasters are becoming more common. The National Oceanic and Atmospheric Administration has lots of data.
AND HERE’S MORE BAD NEWS — European bank pledges to fight climate change are lax at best. A study from nonprofit advocacy group ShareAction found that only three of Europe’s 25 biggest banks — Lloyds Banking Group, NatWest and Nordea — plan to cut their financed emissions in half by 2030. Fewer than half said they’ll stop financing activities powered by coal.
To sum it up: “No bank demonstrates leading practice on all issues,” said Xavier Lerin, who co-authored the report.
WE ALREADY KNEW THIS — But for the record, insuring your house will get more expensive. Insurance giant Swiss Re expects premiums to grow by 5.3 percent a year through 2040 thanks largely to — surprise! — natural catastrophes. The good news: The insurance industry is poised for growth.
FUN WITH METAPHORS — Climate talks between China and the U.S. ended Friday without a deal after geopolitical hostilities (think solar panels and human rights) got in the way.
The world’s largest greenhouse gas emitters traded some tough diplo-speak. U.S. climate envoy John Kerry told Chinese leaders that climate change isn’t “a geostrategic weapon.” Chinese Foreign Minister Wang Yi thought differently.
“The United States hopes to transform cooperation into an ‘oasis’ in Sino-US relations, but if the ‘oasis’ is surrounded by ‘deserts,’ the ‘oasis’ will sooner or later be deserted,” Wang said.
OIL EXPORTERS NEED LOVE, TOO — An energy transition that fails fossil fuel-producing countries could have profound security and economic implications. Iraqi Deputy Prime Minister Ali Allawi and International Energy Agency Executive Director Fatih Birol write that “in a region with one of the youngest and fastest-growing populations in the world, economic hardship and increasing unemployment risk creating broader unrest and instability.”
Today’s big number: Carbon has been trading for more than $60 a metric ton in Europe since August. That’s an 82 percent increase since the beginning of the year.
MAIL DELIVERY MEETS ITS MATCH — Snow, rain, heat and gloom of night can’t stop postal workers, but battery-powered vehicles might. The Postal Service says at least 12,500 mail routes are too long, too cold, or too far from charging stations to rely on electric power.
The Zero Emission Transportation Association, which as you might have guessed supports EVs, is livid. The group accused the Postal Service of cherry-picking data to defend its bias for internal combustion engines.
The Postal Service in February awarded an initial $6 billion contract to upgrade its aging fleet. Ninety percent of its new trucklets could be gas-powered.
Thoughts? The Postal Service is taking public feedback on its analysis.
TEST-DRIVING A NEW FEE — A provision tucked into the infrastructure package in Congress would greenlight, for the first time, a test of a vehicle-miles-traveled fee. The idea could be the most logical successor to the federal gas tax, which fuels part of the nation’s transportation spending.
The gas tax hasn’t been raised since 1993 and is losing ground as cars become more fuel efficient. POLITICO’s James Bikales has the details.
IKEA takes a lot of heat for its supercheap and highly disposable shelving and curios. Now the furniture equivalent of fast-fashion is piloting a buyback service that will offer store credit for “gently used” — and fully assembled — IKEA furniture, which will be resold in the store’s as-is section.
IKEA U.S. plans to make the program permanent at all U.S. stores. You can catch the pilot program until Sept. 19 in Conshohocken, Pa.
A Netherlands panel told Royal Dutch Shell to pull ads claiming that customers can drive carbon-free. The company said drivers who pay an extra penny or two per liter could cancel out pollution from their gasoline usage by funding tree-planting and forest conservation. Greenpeace and a group of students had a problem with that promise and filed a complaint. Shell can appeal the preliminary finding.
TAX US, PLEASE — As European regulators eye limits on emissions from shipping, the industry is volunteering to be taxed instead. The International Chamber of Shipping and Intercargo on Friday endorsed, for the first time, a global levy on emissions from large ships that could be used to fund clean-fuel infrastructure.
Shipping accounts for 2 percent of global greenhouse gas emissions, according to the ICS, which represents 80 percent of the world’s merchant fleet. A new EU report says it makes up 13.5 percent of transportation emissions on the continent.
The Marshall Islands and Solomon Islands — Pacific nations particularly vulnerable to rising seas — have demanded a $100 per metric ton levy on shipping emissions.
LOOK WHO’S GOING GREEN — Rupert Murdoch. His News Corp Australia will end its long-standing hostility toward carbon action and advocate for the world’s leading economies to hit net-zero emissions by 2050. The company has a plan to “limit — but not muzzle — dissenting voices” in its stable of conservative commentators, the Sydney Morning Herald reports.
A CRY FOR HEALTH — More than 230 health journals from across the globe called for emergency action to prevent “catastrophic harm to health” from climate change. In an editorial published Monday, the journals said allowing the effects of rising temperatures to fall disproportionately on vulnerable communities “will breed more conflict, food insecurity, forced displacement, and zoonotic disease.”
“We are globally as strong as our weakest member,” the group wrote.
RENTEZ-VOUS! — A new speed limit of 30 kilometers an hour — you can hardly call that “speed” — hit Paris streets after the World Health Organization called for strict speed limits in urban areas. The city wants to polish its climate bona fides, but car owners are fuming. Delivery drivers predict longer wait times. Taxi drivers say it will hurt business. The AP has details.
Whew: The Champs-Élysées and other main roads are exempt.
While we’re on the subject: Italy wants to shield iconic carmakers Ferrari and Lamborghini from Europe’s planned phaseout of combustion engine vehicles. But what about the Mini?
HOMEBOUND — U.S. business travelers are staying put as Covid-19 cases rise. A survey from the American Hotel & Lodging Association found that 67 percent of travelers are planning fewer trips and more than half are likely to cancel existing plans without rescheduling.
The big stat: The loss of corporate travel could cost the hotel industry an estimated $59 billion this year.
“The Arctic is losing its soul.” Heat, rain and even rivers are eating away at the Greenland ice sheet. Atlas Obscura has a rundown.
Severe weather was to blame for more than 2 million deaths, 11,000 disasters and $3.64 trillion in economic losses from 1970 to 2019. The World Meteorological Organization catalogues the damage.
In the U.S., no one is safe. Nearly every county in the country is feeling the economic burn of heat. Extreme heat costs the U.S. an average of $100 billion a year in productivity losses, more than the annual budgets of the Department of Homeland Security and the Department of Housing and Urban Development combined. Those losses could reach $500 billion a year by 2050, disproportionately afflicting Black and Hispanic workers. The Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center did the research.
Fly-fishing is a $1 billion industry in the U.S. But trout streams are drying up.
— Coral might be tougher than we think. Reefs that have survived underwater heat waves are tolerating ocean warming, the American Geophysical Union reports.
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