On the Issues: Climate Disclosure Rule, Volatile Oil Markets, and More

Twice a month, we’re compiling the most relevant news stories from diverse sources online, connecting the latest environmental and energy economics research to global current events, real-time public discourse, and policy decisions. Keep reading, and feel free to send us your feedback; we hope this newsletter continues to evolve and improve. Here are some questions we’re asking and addressing with our research chops this week:

How might the recently proposed climate disclosure rule from the US Securities and Exchange Commission affect companies and investors?

This March, the US Securities and Exchange Commission (SEC) proposed rules that would require public companies to include climate-related disclosures in their statements and reports. These disclosures include information from firms about their direct and indirect greenhouse gas emissions, how they plan to handle climate-related risks, and how these risk-management strategies may impact their business. The required disclosures would provide potential investors with a more complete and consistent picture of how companies are at risk both from climate change impacts and regulations to significantly reduce greenhouse gas emissions. The proposed rules also would require companies to devote additional resources to comply with the required disclosures. In a new special blog series, experts from various institutions and perspectives weigh in on questions regarding the proposed SEC rule. The first installment of the series asks experts, Why do investors need or want the SEC climate disclosure rule? The second blog post in the series acknowledges that indirect emissions disclosures are important but tricky, with experts addressing the question, What are some of the main concerns with Scope 3 emissions disclosures?

As Ukraine and the world continue to contend with the Russian invasion, what’s been the fallout for oil markets?

As the Russian war in Ukraine continues, the European Union has proposed a complete ban on imports of Russian oil, with crude oil phased out over the next six months and refined products cut off by the end of 2022. EU member states Hungary and Slovakia likely would get an exemption to the phase-out of Russian oil through the end of 2023, as their energy dependence and limited ability to transition to alternative sources requires more time to adapt. The proposed oil ban is part of the European Union’s attempt to “break the Russian war machine,” as described by European Council President Charles Michel. On a new episode of Resources Radio, Helima Croft of RBC Capital Markets explores the volatile oil market in light of the crisis in Ukraine. “Are we going to get to a situation where not only do key European countries that import lots of Russian oil, like Germany, decide that they’re going to wind down those purchases—but is the United States going to take active measures to try to restrict key Asian countries from importing Russian barrels [by applying secondary sanctions]?” says Croft.

How might forthcoming Supreme Court decisions affect water quality and wetland conservation?

A Supreme Court case that may be decided as early as this summer will review how the federal government defines and protects wetlands and other “waters of the United States.” The plaintiffs in Sackett v. Environmental Protection Agency are Chantell and Michael Sackett of Idaho, who have appealed their case to gain the right to build on their land without the need to pay for a federal permit. While the past few administrations have used regulations to determine the degree of federal oversight of wetlands and waterways, the interpretations of “navigable” and “waters of the United States” are still under debate. The court decision will have important implications for federal jurisdiction over privately owned land and wetland protection. A recent blog post by RFF Fellow Hannah Druckenmiller (also published as an op-ed in the Hill) explores the benefits and costs of wetland conservation. “While landowners certainly have reasonable arguments for determining the use of their own property, the effect of their actions on their neighbors is no small potatoes,” says Druckenmiller. “If communities come together to invest in this type of green infrastructure, they are likely to see a quick return on their investment. If we protect wetlands, then wetlands are sure to pay us back by protecting us.”

Expert Perspectives

Climate Change Threatens Historically Significant Sites and Natural Lands

Jamestown, Virginia, is historically significant as the first permanent settlement of English colonists in North America and the first stop for enslaved Africans in 1619. As an archaeological site today, Jamestown is rich with artifacts. But climate change brings extreme weather and stronger storms, threatening important sites in vulnerable areas—such as Jamestown and other sites that are culturally significant to Indigenous people—with damage and flooding.

A Common Resources blog post from the archive summarizes a geospatial analysis of sea level rise and state spending on coastal protected lands. RFF coauthors Rebecca Epanchin-Niell, Carolyn Kousky, Alexandra Thompson, and Margaret Walls show that more than a quarter of Virginia’s shoreline protected lands would succumb to a three-foot rise in sea levels. While impacts on urban areas and historical sites are notable, natural lands and their associated services will suffer, too. “Wetlands attenuate storm surge from hurricanes, store carbon, filter nutrients, provide fish nurseries and wildlife habitat, and are important recreational amenities,” the researchers say. “Sea level rise will affect all of these services.”

Pennsylvania Joins a Regional Effort to Reduce Greenhouse Gas Emissions

Governor Tom Wolf of Pennsylvania has finalized a regulation to join 12 other northeastern states in the Regional Greenhouse Gas Initiative, the first mandatory carbon emissions abatement program in the United States. “This is putting a price on carbon in an important part of the economy and, as people move to electrify, it could be even more important,” says RFF Senior Fellow Karen Palmer in an article on the topic.

The History and Evolution of the Defense Production Act

In a recent episode of Resources Radio, University of Iowa Associate Professor Ty Priest describes the origin, history, and potential future of the Defense Production Act in the context of US energy development. Priest discusses how the act has evolved and expanded since it was enacted in 1950 and how the act has been used to promote domestic energy security in the face of major threats like COVID and climate change. “Basically, it allowed the federal government to prioritize national defense needs over the needs of the private sector and increase the supply of raw materials as it deemed necessary,” Priest says.

Forest Management and Climate Change

On Wednesday, May 4, RFF hosted a webinar to explore how working forests can contribute to achieving climate change goals and provide a sustainable supply of wood products. It was the third event in an RFF Live series that focuses on the role of forests in climate change mitigation and adaptation. “What we’re seeing is that working forests are really the base of solving this whole problem of carbon dioxide and climate change,” said panelist Elaine Oneil of the Consortium for Research on Renewable Industrial Materials. Catch up on the full event by watching the recording.

#ChartOfTheWeek

This graph from Bloomberg, which uses data from the Science Based Targets initiative, depicts the number of companies that have committed to emissions reduction targets in line with the goals of the Paris Agreement. The figure shows the number of companies each year that have made commitments, on a monthly basis, with cumulative numbers indicated for each year. 150 commitments were made in June 2021 alone, bringing the total number of science-based commitments by companies to more than 1,500 by mid-2021 (and more than 2,000 commitments to date).

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