Tuesday, April 11, 2023

Beyond COP27: Who will pay for climate solutions?

VIDEO: Economic issues were front and center at the most recent global climate summit. Join Tobias Adrian of the International Monetary Fund and Shuang Liu of the World Resources Institute to take stock of the investments needed to prevent future climate disasters.

Watch the replay of this event held on December 7, 2022. (Transcript below.)

Trillions of dollars every year, for decades. That’s what we need to spend on green technology and infrastructure to stave off the worst impacts of climate change, experts calculate. As negotiations continue beyond this year’s UN climate summit (COP27), join our free online conversation with Tobias Adrian, of the International Monetary Fund, and Shuang Liu, of the World Resources Institute, about how governments, banks and investors can fund a greener future — and why that’s a smart investment.

Attendees will learn:

The role of national governments, international organizations and private industry in addressing the economics of climate change
Why many argue that wealthy countries such as the US should do more to help poor countries adapt to climate change
Why large investments in science and technology are needed to meet emissions targets

Speakers

Tobias Adrian

Financial Counselor and Director of the Monetary and Capital Markets Department, International Monetary Fund (IMF)

Tobias Adrian leads IMF efforts to find strengths and weaknesses in the global financial system, and to ensure its stability. Before joining the IMF, Tobias was a senior vice president of the Federal Reserve Bank of New York, where he contributed to monetary policy, financial stability policies and crisis management. He has published extensively in economics and finance journals and is on the editorial committee of the Annual Review of Financial Economics. He holds a PhD from the Massachusetts Institute of Technology.

Shuang Liu

China Finance Director, World Resources Institute (WRI)

Shuang Liu leads the WRI Sustainable Finance Center’s work on China finance and the Belt and Road Initiative. She works with governments, private financial institutions, NGOs and other partners to shift China’s investment to sustainable finance. Prior to WRI, Liu oversaw the development and implementation of strategies on climate mitigation and economic transition at Energy Foundation China. She developed Greenpeace’s first coal campaign strategy in China and has worked for consulting firms to assess greenhouse gas mitigation opportunities for private sector clients and government agencies. Liu holds a master’s degree in environmental and resource economics from University College London.

Moderator

Emily Underwood, Knowable Magazine

Emily Underwood is the host and producer of virtual events at Knowable Magazine from Annual Reviews. She has been covering science for over a decade, including as a staff neuroscience reporter for Science. In 2016-17, she was a Rosalynn Carter Fellow for Mental Health Journalism, and her reporting has won national awards, including a 2018 National Academies Keck Futures Initiatives Communication Award for magazine writing.

About

This event is part of an ongoing series of live events and science journalism from Knowable Magazine and Annual Reviews, a nonprofit publisher dedicated to synthesizing and integrating knowledge for the progress of science and the benefit of society.

Future Tense is a partnership of Slate, New America and Arizona State University that examines emerging technologies, public policy and society. Sign up for Future Tense’s newsletter.

Resources

Transcript

Emily Underwood: “Hello everyone. Welcome to our 21st live online event, ‘Beyond COP27: Who will pay for climate solutions?' I’m Emily Underwood, your host today, and the producer of events for Knowable Magazine. This is a special event brought to you by Annual Reviews, Knowable Magazine and Future Tense. Future Tense is a partnership of Slate, New America and Arizona State University that examines emerging technologies, public policy and society. If you haven’t checked out Future Tense before, please do, sign up for their newsletter and sign up for Knowable’s newsletter, too. We will be recording this event. You can replay it after it’s over and share it with others.

“A few technical things, if you can’t hear the audio, please refresh your browser and make sure the mute button is off. Do the same if one of the speaker tiles goes black. This is a known quirk, so you’re going to refresh your browser — same thing. OK. Put your questions in the question box at the bottom right of the screen. This is different from the general chat that you’ve been saying hi on. So take a second and make sure you can see that question box. You’re going to put your questions there. After about 30 minutes of discussion, our editors are going to pick from the list, and then we’ll answer as many of those questions as we can.

“All right, let’s meet our guests. First, we have Dr. Tobias Adrian, who joins us from Washington, DC. Tobias is the financial counselor and director of the Monetary and Capital Markets Fund of the International Monetary Fund. He’s on the editorial committee of Annual Reviews of Financial Economics, and he’s written extensively for Annual Reviews and many other publications. So welcome, Tobias. Can we bring Tobias up?”

Tobias Adrian: “Hello, Emily.”

Emily Underwood: “Hi. OK. Let’s meet our other guest, Shuang Liu. She is the acting director of the World Resources Institute’s Sustainable Finance Center. Among many other responsibilities, she works to help China shift its massive investments, at home and abroad, away from fossil fuels toward green development. And that’s just one of her many, many roles. So Tobias and Shuang, thank you for joining us today. And I also just want to say hi to everyone in our audience. I am seeing guests from Nairobi, Detroit, Ghana. Welcome. It’s really fun to see where you’re joining from, so please do share that in the chat if you like.

“We’re going to start this event off a little differently. We’re going to start with a poll that we can all participate in. So if you look to the right of your screen, you’re going to see a little icon for a bar graph. Can everybody click on that bar graph? Does everybody see the poll? Yes? OK. What you should be seeing in front of you is a question, which is just, where do we stand when it comes to funding climate change solutions? And you have six different options.

“First, ‘It’s going great!’ We’re golden. The other is ‘It’s going in the right direction, but we need to move much faster.’ The third is, it’s hard to say: There’s either plenty of money, lots and lots of money, or not nearly enough — outlook hazy. The other is, ‘We’re in deep trouble, but it’s still possible.’ ‘We’re out of money and/or time.’ And then the answer is, ‘Wrong question! Concentrate and ask again.’

“And, yes, I did get some of these answers off of a Magic 8 Ball. So please make your votes. We will show the results of this poll when we get to the end of our conversation, but I’d like to kick things off by asking what our speakers think. So Tobias, let’s start with you. Where do you land? We’re golden or we’re doomed or outlook hazy?”

Tobias Adrian: “Well, we have our work cut out. Still a lot more needs to be done to get the planet to a green transition and to ensure that the climate that we know is preserved in the future. We have started on this journey, but we have a long way to go. Many, many trillions of dollars.”

Emily Underwood: “OK, so answer 2 for Tobias. Shuang, where do you stand right now? Do you agree with Tobias? Are you more or less optimistic?

Shuang Liu: “Yeah, I think I would like to agree with Tobias and also to add, I think what we need is that we have a lot of the pieces, but probably not in the right place. There could be sufficient funding to support it. There could be sufficient capacity to access and mobilize the funding, but it’s not really flowing fast enough for us to see where the money can support the right efforts on climate solutions.”

Emily Underwood: “OK. Thank you for playing. And now I’d like to talk a little bit about why we are here today, which is not just can we pay for climate solutions, but who will pay for climate solutions? Where is the money going to come from? This has been in the news a lot lately because of the latest UN meeting in Egypt, which, Shuang, you attended. Correct? And Tobias, I’m sure either you or your team were there.

“So when we ask this question, it starts to get really complicated obviously, because we’re really talking about at least three buckets. So paying for climate mitigation, moving away from fossil fuels. Second, all the upgrades or adaptations that we need to make to avoid the catastrophic damages from climate change. And then third, this issue of loss and damage where we need to find a way to pay for the damages and losses that are already happening and that are causing such suffering around the world already.

“What I would like to start with is to talk about you, Tobias, and what is the International Monetary Fund, and why was it such a big player at COP27? Why is it such a big part of these conversations?”

Tobias Adrian: “Yeah, absolutely. The International Monetary Fund was created, together with the World Bank, after World War II, and the International Monetary Fund is really there to ensure that the global monetary system works well. So the mandate of the IMF is anything that is macro-critical, so that amounts to economic developments that are of macroeconomic magnitude, and certainly climate change falls into that bucket.

“One of the main differences between the IMF and the World Bank is that the IMF has global membership. We have 190 countries that are members, and that is stretching everything from the richest to the very poorest country in the world. So when we think about climate change, climate mitigation, climate adaptation — as you put it so nicely, Emily — we really have to think about the entire membership. And that’s one particular advantage point of the IMF is this global membership. It’s macro-criticality, global membership and how do we get the whole world to have a strategy to address this fundamental issue.”

Emily Underwood: “Can I ask, what does it mean to be a member? What powers does that give you if you’re a member of IMF?

Tobias Adrian: “Absolutely. There’s a kind of legal foundation to the IMF, which is called the Articles of Agreement. So any country that becomes a member has to adopt domestic laws to make its own functioning compatible with the IMF. And so there are both obligations and benefits from being a member. So it is very much universal. They are only about two or three countries that are not members, because it is viewed as being so beneficial and so important to be a member.

“The IMF does three things: surveillance, lending and capacity development. Let me just elaborate a little bit on those three things and what they mean in the context of climate change. So surveillance is really about assessing policies both at the global level and at the individual country level. This is where, for example, we play an important role in the COP and we cooperate with many other institutions such as the World Bank but also the NGFS, the Network of Greening the Financial System, or the Financial Stability Board. These are all global institutions that are involved in climate to some degree. So surveillance is about policies. Lending is about lending money to countries and we can elaborate more on that in a moment. And then capacity development is about building institutions in countries to deal with climate change.”

Emily Underwood: “Great. We will come back to those big buckets, but right now I’d like to hear from Shuang about what you do at the World Resource Institute. What is your role there?

Shuang Liu: “Yeah. Well, very different from IMF. We identify ourselves as a think-do tank. So the approaches that we take to tackle basically the human, nature and climate, that’s our focus, is that we provide research so that we can provide evidence to support a lot of the policy discussion and also the practices discussions. We also do a lot of convening, and this is only achievable with our global network in 12 regional offices in Latin America, Africa, Asia, Europe and the US.

“We also work very closely through our partnership, not just within WRI, but also with partners in different countries and regions. So if I can actually make analogy of, at the finance center, how we are looking at not just the climate finance, but also a lot of the nature and people-oriented finance, it’s like we are looking at the topic as it’s serving a pie. How we can make the pie, which is the size of finance that’s available to support the climate, people and nature goals, is that we need to make the pie larger.

“There’s still a large funding gap, particularly in the Global South countries, where we need a resource to do the work. That’s the first piece, how we look into the issue. The second piece is how we can cut the pie. The topic of today’s discussion is who’s going to pay for the climate solution. It’s part of the discussion on who is getting what size of the pie on the climate finance and the other global finance.

“And the last piece, how we frame it is that how we can serve the pie right. A lot of the discussion won’t end just as the developing countries on the national level can get climate finance, all other types of finance. It’s also about how to serve that finance service to the sub-national government and ultimately to the community and people who need finance to make magic happen. So by looking at the three different angles, that’s how WRI and our finance center can make our contribution to this global discussion.”

Emily Underwood: “OK, thank you. And, Shuang, when you’re talking about this pie, who are the big players? Who do you want to get to the table, not necessarily to eat the pie but make the pie?”

Shuang Liu: “It depends on how large the table is. I think the table should be very large. It’s very difficult to answer that question because it needs to be, in a lot of cases, a country-by-country discussion, if not a community-by-community discussion. So I’m just going to simplify, if not oversimplify, the question, and particularly because we’re talking about COP27 and the whole UNFCCC [United Nations Framework Convention on Climate Change] process. A very essential discussion on the global negotiation on climate is that developed countries have to pay developing countries for their climate action.

“The rationale behind it is because developing countries historically are not responsible for the global warming problem. So that in order to support developing countries to achieve their NDC [nationally determined contributions] and other climate mitigation and adaptation goals, the developed countries will have to pay for those efforts in developing countries. Well, we have been paying attention around COP and the UNFCCC process, that there is a commitment for all the developed countries to pay at least $100 billion every single year to developing countries to help with both mitigation, adaptation goals.

“However, we are actually behind on achieving these goals. And so a lot of discussion is how we can still make this a commitment realized in the reality. The other part of the story, again — let’s take the focus on the UNFCCC first — is for next steps; there’s this discussion that we have to raise the ambition from the developed countries on the climate finance to beyond $100 billion. There hasn’t been any concrete plan on how to achieve this, but that’s actually one of the areas we need to pay attention to under the question of who should pay for the climate finance.”

Emily Underwood: “I think that this question of who should pay and the equity issue, we’re going to spend more time on that as we get towards the end of our discussion. I want to give us plenty of time to hash some of these problems out. Before that, though, I want to move back to the basics of how to raise this money. And I want to use the example of coal, because that’s something that you and Tobias have both worked on extensively.

“Tobias, you’ve argued that countries like the US should be financing, should be paying for the replacement of coal. And I mean wealthy countries like the US, often referred to as the Global North, should be paying for the replacement of coal with renewable energy around the world, not just out of responsibility or equity, but out of self-interest. And you’ve calculated that there are huge economic benefits to be gained. If we don’t do it, it’s leaving $85 trillion on the table. So your challenge is to explain how you got to that enormous sum, in a minute or less.”

Tobias Adrian: “Yes, very happy. The usage of coal in the production of energy is polluting the environment, and that is extremely costly for the world. It generates global warming. Global warming is destroying the pie, what Shuang was talking about earlier. The pie is getting smaller — i.e., the world is getting destroyed by global warming. So preserving the planet is extremely beneficial and that’s the $100 trillion number. So to preserve the planet has a huge amount of economic value.

“The costs of replacing energy production from coal with greener sources of energy production is only about $30 trillion or so. So the cost of transition is perhaps $30 trillion, say, over the next 20 or 30 years, while the benefit is over $100 trillion. So the net benefit of transitioning from, say, coal production of energy to green sources of energy, the benefit is enormous, and the benefit is essentially preserving this planet and preserving the economic pie that the planet is producing.”

Emily Underwood: “So when you’re talking about this net benefit and you’re trying to convince countries that this should happen, how do you explain, when will this net benefit arrive and who will get it and are there going to be losers, as well, in that calculation?

Tobias Adrian: “There is of course always an adjustment, right? Because you have to move from energy production by coal to other sources of energy production. So some jobs, for example, need to be reallocated, but we estimate that those costs are relatively small relative to the benefit of preserving the planet. And so think about countries that can grow agriculture that become deserts — that is the cost that we are talking about. It is the literal destruction of the planet and that is costly for everybody.

“So as you alluded to, Emily, even for nations that are only indirectly exposed to these costs, paying for the transition can be extremely valuable. So some nations might not just be interested in transitioning in their own country, but to also pay for other countries to transition. And that is exactly the rationale why institutions such as the IMF, the World Bank and the multinational development banks are set up.

“Those are institutions to realize those net benefits for the world as a whole via transfers of financing. So I think that it is a combination of these public sector transfers of money, much of it from advanced economies to emerging markets and developing economies in combination with capital market activity, as well. So it is a combination of public and private sector funding that can solve this enormous challenging problem.”

Emily Underwood: “It seems to me that there is quite a bit of agreement and consensus about what needs to happen and a lot less agreement about how it should happen. So, Shuang, can you talk about your perspective on this, how to mobilize this transition, who should really be leading it?”

Shuang Liu: “Yes. I really love the framing that Tobias gave us. If I can actually just complement Tobias on not necessarily the macro level but micro level discussion and some of the efforts we have seen in the past several months on coal, and also particularly we’re talking about the replacement of existing coal power stations. I do want to bring our attention to the so-called Just Energy Transition Partnership, of JETP, which is G-7 countries … working with some of the countries where there’s a heavy exposure to fossil fuel, particularly to coal, in namely South Africa, Indonesia, India, Vietnam.

“And the design of the Just Energy Transition Partnership, the JETP, is for the G-7 countries to pool their funding together and to support the host country, or the JETP countries, to design a plan of how to retire the operating coal power stations earlier than those coal power stations were designed for. And what I meant is that normally, for instance, in those countries, the coal power station, when they became operating, the expectation is they will be there for 40 years, 50 years. I’m just making this as an example.

“And what funding from G-7 countries is trying to support is for those host countries to retire or put their coal power station off-grid 10 years early, 20 years early. It depends on the final package to say the details. But this is one way of how developed countries can put their funding together to pay developing countries to take the coal power stations off the grid. And this is what exactly the climate science is asking us to do.

“I just want to share one data point that IEA — that’s the International Energy Agency, who’s very good at their energy modeling work, and that’s very often that we will refer to — is asking that all the OECD countries will have to phase out all the coal power stations by 2030, and for the rest of the world, all the existing coal power stations have to be phased out by 2040. So to achieve that goal, which is in line with the 1.5-degree climate scenario we’re talking about, we’ll need a lot more funding than we currently have to replace those coal power capacities.”

Emily Underwood: “There’s a lot of talk about the need to mobilize or unleash, release money, especially private capital, for climate change solutions. And blended finance is one model for how that can work. Can you explain what that is and also, if somebody could just explain to me how money gets trapped or leashed, that’d be a bonus. But Tobias, why don’t we start with you?”

Tobias Adrian: “Yeah, happy to start. I will give you a very concrete example. At the IMF we have a new lending tool, which is called the Resilience and Sustainability Trust. That is about $40 billion at the moment — it could be scaled up over time — that is aimed at lower-income countries and vulnerable middle-income countries, oftentimes smaller countries such as islands that are really exposed to climate change. About 143 countries are eligible for this Resilience and Sustainability Trust. And we already have programs in place with Barbados and Rwanda, and our board approved a program with Costa Rica as well.

“So those countries are going to get a certain amount of funds from the IMF. Blended finance would mean that some of those funds are then combined with private sector funding to leverage up the public money. And a very good example of that was provided by the IFC, the International Finance Corporation, which is part of the World Bank Group. So that is the public-private sector arm of the World Bank.

“And so what they did a couple of years ago was to team up with a private investment operator, Amundi, to offer a tranche investment vehicle. So the public funding by the IFC and other development banks such as EBRD [European Bank for Reconstruction and Development] and EIB [European Investment Bank], those other multinational development banks, they funded sort of like the riskiest tranche in a kind of structure. And that was levered up 10 to 1. So say out of $200 million, $2 billion of total funding was generated by combining the $200 million with $1.8 billion of private sector money. So that’s a template that could generate, say, from this $100 billion, the magic number that Shuang mentioned earlier, if that was levered at 5 to 1 or 10 to 1, we would get into the sort of magnitudes that we think are needed to really have a global tranche transition.”

Emily Underwood: “OK, thank you. A couple questions. When you say give money, are you saying lending money or these are loans and are these loans with a different borrowing cost or interest rate than other types of funds? I’m just wondering if this is the same initiative that Prime Minister Mia Mottley from Barbados sort of brought about.”

Tobias Adrian: “These are loans that come with relatively low funding costs and they can be used by the country to help in building resilience and some of that could be used to be leveraged with private sector funding. So we did some work, some analytical work for the Global Financial Stability Report, which is one of our reports, where we looked systematically across development banks, how much leverage they generate. And on average it’s about 1.2. We think we can get to five times leverage or even more by structuring these public-private partnerships, which is what blended finance is about, in a better way.

“So when we talk to the private sector, there’s an enormous appetite to actually invest in climate transition. Investment managers, pension funds, insurance companies, they want to do that but they can only take on a certain amount of risk. And so this is where the public sector can come in. The public sector can take on a certain amount of risk, like country risk, off the table, and then the private sector complements the kind of risk-taking of the public sector. That’s the fundamentals.”

Emily Underwood: “Thanks. Thank you for that very nice explanation with a minimum of jargon, I really appreciate it. So, Shuang, do you think that what Tobias just described, are these types of changes going to be enough to make this happen?”

Shuang Liu: “Yeah, I would think, given the funding gap we’re talking about, we need a whole package of every solution. Also, just building upon what Tobias has shared, another example I’d like to bring our attention to is some of the international financing focusing on the infrastructure sector, the power generation sector. There are some of the bilateral players who actually played a very important role in this international infrastructure of the power generation financing. The way that, Emily, you asked the question, the blended finance … de-risking, the public finance mobilizing private finance. The reason we’ll need a solution like it was because there are perceived risks for private finance investors to invest in overseas, particularly in developing countries. That’s where the public finance or public investors can help with sharing the risks so that they will make private investors more comfortable in increasing their investment in the renewable energy and other climate efforts.

“The other part is that the public finance does have a different mandate than private finance. They are not as profit-driven as the private ones. So that having the public finance creating some of the … policies for private finance to come in, that’s another reason why we are seeing that the blended finance can play a more important role than what it does nowadays. And what I shared, for instance, for the international infrastructure projects or power generation projects, very often we have seen that, for instance, OECD countries, and China as well, there will be a so-called export credit agency that’s a public money and public agency who actually provides either insurance or sometimes the concessional loans as the public money.

“But they will also engage the private players — it can be the commercial banks or it can be the corporate who can actually invest directly in the developing countries, in other countries. That’s how they sometimes come together in a project-financing structure so that the public money can work with private money to support the infrastructure and other kinds of projects abroad.”

Emily Underwood: “Tobias, do you want to respond to anything that Shuang just brought up?

Tobias Adrian: “Let me frame it in the following way. I think there are three issues. One is the scale, and that is what Shuang was really talking about. So is there enough public money available to finance the transition globally? And what the exact number is, I think we can debate, but I fully agree that more is needed, for sure.

“The second question is what do you do with the money? Are there sufficient projects to, say, make a country, I mentioned Barbados, for example. Do you have concrete projects available to really generate transition in a country like Barbados? Or Shuang mentioned South Africa or Indonesia. So that’s the second question. And then the third question is how does the private sector complement public sector funding? And let me just spend a little bit of time on this third question.

“So the private sector is going to demand a certain return which is comparable to other returns, but the public sector can take some of the risks off the table, add a cost that is relatively lower than what would have to be asked by private sector. For example, the World Bank has a specific insurance product called MIGA [Multilateral Investment Guarantee Agency], that is specifically ensuring some of those risks that are very difficult to insure in the private sector. There is a public sector solution for those risks.

“That is, for example, something that could be used at much more scale in these blended finance structures. So it’s really thinking about how to tranche and make risk, allocate risk to different players, to the public sector with the private sector to, say, asset managers with insurance companies, with pension funds, in a way that increases the total capacity to finance the green transition. So a lot of plumbing there, but I’m quite optimistic that this can be a very important element to generating steps in the right direction.

“It doesn’t solve everything. You need the other parts, too, you need the right projects and you need sufficient public sector funding. But once you have the projects, once you have the public sector funding, combining that with the private sector I think will be very powerful and can be potentially much larger than the kind of numbers we see at the moment.”

Emily Underwood: “OK. Well, I’m glad you’re optimistic. I would like us to make sure we get to some of our audience questions. As a reminder, hey, audience, you've got to put your questions in the question box so make sure you’re putting those in there. Our editors are going to move them into a document that I will be looking at. But I’m just going to throw one question out there that’s obviously in the chat. So isn’t coal burning in China, the elephant in the room? Are these funds being focused on China? So, Shuang, can you take that question first?”

Shuang Liu: “Yes. … Is the question, those funds, like multilateral funds? Are those funds focusing on China? Those funds, are they referring to the multilateral funds?”

Emily Underwood: “It isn’t specified, so I think you should respond with the funds that are.”

Shuang Liu: “Yes. So maybe I can just take one step back. Yes, I think the coal conception, in China and the rest of the world — as I shared, the data point from IEA scenario — that’s what we need to address. And I believe that it’s also in China’s own interest to talk about the coal conception and how to reduce it. There are many policy discussions we have observed in China, including put a cap on the coal and also the total energy conception. Those are certainly the right directions that we will have to travel to.

“We do also notice that a lot of the coal power stations in China are actually not really economical to run … anymore. There is a lot of more political economic analysis and also discussions we can have. But just look at the performances, also how many hours those coal power stations in China are running. It doesn’t really make sense from, of course, the environmental perspective but also from the economic and financial perspectives, to keep them on the grid. And that’s certainly something that we will need to look into.

“On the multilateral funds, and I’m sure that Tobias will be able to give more answers to, but I do think that for China and maybe the other countries, we’re talking a lot about those international financing so far. But we also need to pay attention to how to mobilize the domestic finance within certain countries to support those efforts. China’s one example. Even in Africa, where the COPS27 countries, the data shows in the past decades, almost half of the investment in energy in Africa was actually from the domestic funding sources. I was actually surprised, looking at the data point, so just want to flag that domestic finance as well as the international finance are needed to support the climate efforts.”

Tobias Adrian: “Emily is not visible at the moment, and I’m not sure we can hear Emily, so why don’t I just complement what Shuang was saying. In many countries, I fully agree that domestic funds can be very instrumental in generating a green transition, and China of course is a good example because China is one of the largest countries in the world, by GDP, right? It’s the second-largest economy and by some measures it’s very close or comparable to the US in terms of size. So there’s certainly financing capacity there to finance transition and it is a question of policy priorities to get there. And this is where I think both the IMF and institutions such as the WRI, where Shuang is working, I think are pushing the debate in the right direction and policy orientation in the right direction is very first order.

“I did want to mention a complementary thought. We have been very much focused on coal and carbon in terms of carbon production. But of course, preserving nature is the other first order priority. We have rainforests around the world, in the Americas, in Africa, in Asia, and the value to the planet, to everybody on the planet, of preserving those forests is tremendous.

“But of course, this benefit, from the global perspective and from the global citizens’ perspective, in some sense, is not fully internalized at the local level, right? Because everybody is better off by having forests around the world. But of course any individual might be better off by planting agriculture or raising cattle on those areas where the rainforests are. So aligning the global interest with the local interests is another first order objective in this debate.”

Emily Underwood: “Tobias and Shuang, can you hear me?

Shuang Liu: “Yes.”

Tobias Adrian: “Yes, we can hear you.”

Emily Underwood: “Can you see me?”

Shuang Liu: “No.”

Tobias Adrian: “No.”

Emily Underwood: “Well, luckily you don’t need to see me and you’re carrying on beautifully without me. Sorry, we had a connectivity issue. I just want to make sure we get to a few more of our audience questions, and apologies if I’m repeating anything.

“From Donald Samulack, it’s a mixture of a statement and a question: ‘I find that we are all in the same conversation loop globally, lots of commitment through talk and money but not much political will to affect change. Other priorities like Covid seem to stifle the momentum. In the end, real solutions are going to come from private sector rather than big government.’

“Basically, the question is, ‘Are we going about this all wrong?’ You’ve talked a bit about incentivizing the private sector to offer a better and faster return on investment. But I want to actually add to this question with a metaphor of my own that has been on my mind. When I think about the job that you’re trying to do, Tobias, and the job of the IMF, I think of this car hurtling towards a cliff. And to me, it seems like you’re sort of trying to change the tires of the car without slowing down or stopping, because there’s an element of risk to changing these moving pieces, but you also have to keep the car from going off the cliff. So does that metaphor ring true for you? And that goes to the ‘Are we going about this all wrong?’ question. Does something fundamental need to change?”

Tobias Adrian: “I think we have to work on many different solutions and hopefully all of them in combination are going to make a difference. I fully agree that the private sector plays an enormously important role, but it’s not clear to me that the private sector has the full incentives to go all the way. When I talk to major financial institutions, for example, at COP26 in Glasgow, GFANZ [Glasgow Financial Alliance for Net Zero], often called the Glasgow Alliance, was created. Mark Carney is very much associated with that. At this point, $150 trillion of financial institutions in their alliance. So, enormous amount of money.

“But they always say we need collaboration from the public sector. Because they can’t take all those risks from the private sector side. Incentives are not fully aligned. This is why I think that blended finance, the public-private partnerships are so important. Similarly, research of the private sector is certainly going in the right direction, but is it going all the way? If the private sector can solve it, that’s great. I’m very happy. From what I hear, we do need the partnership between the public and the private sector at this point.”

Emily Underwood: “Shuang, do you want to add anything to that?”

Shuang Liu: “Yes, I would love to. I think, because we are talking about everything on climate change, there are very different initiatives we’re talking about. Again, simplify everything. We have mitigation, which means we need to cut the greenhouse gases emission. We also have adaptation, which is climate change is happening. So we need to have better infrastructure and a resilient way of protecting people in the community who are already suffering from climate change. And particularly for adaptation — I’m just giving this as example — the private finance have even less incentives to invest in a lot of climate adaptation efforts.

“So I personally don’t think that we can only rely on private investors on a lot of the projects where we don’t see a very clear... Private investors are profit-driven and when we are seeing this is actually public good that we need to provide under the climate umbrella, then perhaps private finance is not the only solution and the sole solution that we can rely on. But I absolutely agree they need to play an essential role in many ways with the other finance resources.”

Emily Underwood: “Next, I would like to ask a question from Chirag ‘Jay’ Patel. ‘Why can’t there be an implementation of a global carbon tax to fund a transition to clean and green energy?’ This is certainly a question I have wondered about. Tobias, do you want to take that first?”

Tobias Adrian: “Yeah, that is very much aligned with our No. 1 policy priority at the IMF, which is carbon taxes. So from a sort of economics principle point of view, that is the right answer. You have to align pricing with externalities. So the cost you’re paying for pollution is way too low relative to the damage you’re doing. And so carbon taxes are fixing that problem. The problem with carbon taxes are the politics. In some European countries, carbon taxes are fairly close to what economists think is the right level.

“But outside of Europe, the gap is very, very large in between what the price of carbon is and what the social cost of carbon or the right price of carbon, from a pollution point of view, is. And the politics are very, very difficult around getting from the currently very low price of pollution, to the right price. So it’s not only politically hard to do, that’s why I think carbon pricing in practice has to be complemented by things like blended public-private kind of finance.”

Emily Underwood: “Thank you. That’s helpful. Shuang, what is your take on a global carbon tax or how carbon taxation should be applied?”

Shuang Liu: “I wish that somebody can give me the clear answer on that. In my previous job, I worked on the carbon market or the emission trading program in China, on the national level and sub-national level. I very much with agree with what Tobias has shared. It’s actually not a technical discussion. And as an economist by training, I also agree this probably should be the most convenient solution and the minimum that we can do to have this global carbon pricing. But because of the political will and, as Tobias has pointed out, that I think there are only very few existing carbon markets where the carbon pricing is at a level that will make a difference to the mitigation efforts.

“In a lot of the regions and countries where there is a carbon market, because of the lack of ambition, in a way, the carbon market pricing or the carbon tax is actually not at a level where we can make a difference in there. So again, I think a lot of groups, including IMF, are still working on how we can push for global carbon pricing, but we can’t afford not to be looking at the other options, just given how challenging it can be to have such global initiative.”

Emily Underwood: “This really also speaks to the issue of accountability and tracking all of these things. One of our questions is, ‘We see a lot of goodwill money being talked about or being made available, but how do we track how much is actually spent and spent properly?’ Shuang, I know that you do a lot of this type of work at WRI. Can you speak to that? And then we’ll hear from Tobias.”

Shuang Liu: “Yes, I’m happy to. Yes, at WRI, that’s one of our work … that we get really excited and talk about this all the time — the accountability and transparency and tracking. For instance, some of the efforts we have is that how we can … As Tobias has pointed out, some of the private financial institutions last year around Glasgow has found this defense and a lot of them have this commitment of whether that they can set up their science-based target, to make sure their investments are aligned with the 1.5 degree and the other targets.

“But there isn’t a go-to place to find out how the financial institutions are making progress towards their targets. So organizations like WRI, and we know there are other key organizations working on this as well … we go out to collect the information from different reports that the private financial institutions publish on either the environmental performances from their annual report to pool out the data and consolidate them into one so we can put those efforts from different financial institutions next to each other to give us a better mapping of where they are in terms of their progress on the climate goals.

“The other players we’re talking about also, the public ones, including the developed countries and naturally their progress on $100 billion. Also, there is a reporting program, how these developed countries will have to report. So a lot of the organizations, including us, will also try to provide some of the more timely efforts, watching how they’re making progress. The other effort is that a lot of the … development financial institutions publish their own report on the climate finance progress with shared methodology. So I think there are different groups working on different angles, but ideally in the coming future there will be more comprehensive and consolidated efforts, making it much easier for us to track where the progress is. And of course it has to come…”

Emily Underwood: “Great. We’ve been getting some requests for resources, including visibility on what grant opportunities are available for the private sector to access funds and innovate, deploy solutions. So I think after this we will hopefully compile some resources that people can learn more about and follow up on. Tobias, do you want to add anything to what Shuang was talking about?”

Tobias Adrian: “Yeah, I would add something that is closely related but a little bit different, which is about data and disclosure. What Shuang was talking about is really think tanks or public institutions like the IMF and the World Bank are certainly keeping track on what are the needs and how much is being spent and who’s spending what and where it’s being spent. The other element that I think is very important is for the private sector to be able to assess what is green and what is brown.

“So to what extent is a certain company using clean inputs and producing clean outputs, or is polluting. This is where this whole discussion around data and disclosure is coming in. About a year and a half ago, the ISSB, the International Sustainability Standard Board, was created to basically generate an accounting system globally for the degree of greenness of corporations and products.

“I think that it is difficult to overstate the importance of that. That allows economic actors, individuals, whether you are in the supermarket or whether you are an investor or whether you are in the public sector, it’s allowing you to assess to what degree production is green or brown and to provide incentives to move in the right direction by directing new purchases, by directing new investments and by directing tax dollars, so public money.

“The initiative here is to generate the data, disclose the data and then basically classify what is green and what is brown. And so there it’s really on the classification, the third leg, it’s the European Union and China that are leading there. Data and disclosure, it is a global effort where actually the SEC [Securities and Exchange Commission] in the US has made an important step in a proposed rule this year. And this is done very much aligned with this is ISSP, which is the global standard data for essentially climate data.”

Emily Underwood: “Thank you. And there are so many acronyms in this field. That’s my own personal comment here. So we only have four minutes left, and I want to make sure that we see the results of our initial poll. And I hope that people who have attended this have learned something and found it interesting. Maybe you’ve become a little bit more optimistic, maybe you’re less optimistic. That’s something I’d be curious to see. You could tell us in the chat.

“And I’m wondering, since we have four minutes, I just want to get to one last audience question. This is kind of an interesting proposal from Moira Magneson. ‘Might a global climate conservation core — with buy-in and recruits from constituent IMF countries — be launched as a workforce to develop and build green alternative infrastructure in the countries that need it most? Or does such an organization already exist?’ I’ve never heard of one.”

Tobias Adrian: “Is the question for me or for Shuang?”

Emily Underwood: “Well, you’re from the IMF, so let’s start with you.”

Tobias Adrian: “OK, I will start. So I told you at the beginning that we do three things: surveillance, which is essentially policy advice; lending, which is getting the dollars in the countries; and capacity development. And I think your question is very closely related to capacity development. So we do that at the IMF, but also the World Bank is doing that. And capacity development is really about having people in countries to build institutions to put the right policies into place. So we are not building an energy company. If you’re thinking about engineers that are building solar panels, that, neither the World Bank nor the IMF is doing, but creating policy frameworks that allows to then build those solar panels, that is already something we do through capacity development, and the World Bank, as well. So let me stop here and perhaps pass to Shuang.”

Emily Underwood: “Oh, that’s helpful. I have learned a lot about what the World Bank and IMF do and what they don’t do in the course of this conversation. Shuang, is there anything you want to add to that? And we do have to end in a minute.”

Shuang Liu: “Yeah, maybe just one point. I don’t think such one organization exists, but there are certainly efforts working this way, and I think it’s extremely important to have on-the-ground, in-country capacity because a lot of the solutions are actually country by country and it has to be so customized to the local situation.”

Emily Underwood: “Thank you. OK, one last question from me. If you could have one superpower that would help you do your job well, what would that be? And as you guys think about it, I want everybody to take a look at the poll results. You can click on the bar graph again and take a look.

“As a reminder, if you’ve enjoyed this event from Future Tense and Knowable, please sign for our newsletters, follow us on Facebook and Twitter. And thank you everybody for taking the time.

“We’re going to be working on an exciting new series of events in 2023, so please keep an eye out for those invites. We’ll also send out a survey soon to gauge what’s working well at these events, what we could do better and get your ideas for future topics. Thanks again, and we’ll end with our superpower reveal. Shuang, what superpower would help you do your job?”

Shuang Liu: “If I can only choose one, I want just unlimited power to clone colleagues, peers I work with. Because the job can be sometimes very frustrating, just with the scale of disaster we are facing, but the inspiring talent, kind, caring colleagues I work with in and outside of my organization — I really wish I can have the superpower to clone as much as possible so that we can have more capacity to solve the climate change.”

Emily Underwood: “Excellent. Tobias, what about you?”

Tobias Adrian: “Climate change is a choice. Humanity can make the right choice or the wrong choice. And so the superpower would be to help humanity to think through the future. So it’s not so much seeing the future, but it’s seeing the future along those two different paths, making the right choices and making the wrong choices. And when you make the wrong choices, you are going to have a planet that will be a desert everywhere or nearly everywhere, and you make the right choices, you preserve the planet, you preserve livelihoods and happiness. And so making people understand so that they can make the right choice to preserve this planet, that would be my superpower.”

Emily Underwood: “That’s a fantastic note to end on. I wish we could talk much longer. This has been really fascinating. Thank you again, Tobias and Shuang, for joining us. And I’m sorry I can’t say goodbye to you with my face. I don’t know if anybody can see me, but I can’t. So apologies for that. But luckily we can see our guests, still.”

Shuang Liu: “Thank you.”

Tobias Adrian: “Thanks for having us.”

Emily Underwood: “Thank you so much.”

Shuang Liu: “Thanks, everyone.”

This article originally appeared in Knowable Magazine, an independent journalistic endeavor from Annual Reviews.

America is failing women’s health

OPINION: Systemic inequity means women in the US die younger and suffer more than they should. It’s time for health for all.

By Susan E. Short By Meghan Zacher

One of the big news stories of 2022 was the overturn of Roe v. Wade, which threw America’s appalling treatment of women’s reproductive health into the international spotlight. But the problem of how the US is failing women’s health goes far beyond abortion rights. This wider issue deserves more attention.

The state of women’s health in the US is shocking — even to us, medical sociologists and demographers with a history of studying gender and health. Population health statistics paint a sobering portrait. Women in the US fare poorly in one way or another compared with women in other high-income countries, compared with US men, and even compared with previous generations of American women. And there’s no sign that these patterns are improving.

Mortality statistics show that US women live substantially shorter lives than women in other high-income countries. While US women’s life expectancy at birth was similar to the average across 23 comparison nations in the Organization for Economic Cooperation and Development in 1980, by 2019 the US had fallen to the bottom of the pack. That year, US women’s life expectancy was 81.4 years — 3.2 years lower than the average across those comparison nations and more than four years lower than in Italy, Switzerland, France, Spain and Japan.

US rates of maternal mortality and severe maternal morbidity — “near-miss” events that could have resulted in death — are inexcusable. They have been rising for decades, with troubling increases in recent years. Between 2018 and 2020, the US maternal mortality rate increased from 17.4 deaths per 100,000 live births to 23.8. For comparison, in 2020, the US maternal mortality rate was more than three times higher than that of 10 other high-income countries, including Canada, the UK and Germany. A 2022 CDC report suggests most pregnancy-related deaths in the US are preventable.

Delivery isn’t the only risk to pregnant people in the US: They die even more often from homicide than they do from pregnancy-related causes. Homicide also ranks among the top five causes of death for girls and women up to age 44 in the US overall.

Women’s health in the US and elsewhere also suffers needlessly from the silence and stigma about female bodies that persist in science, medicine and society. The lack of science on the clitoris, even its basic anatomy, is a notable example. Experts agree, too, that our understanding of basic uterine and menstrual physiology is lacking. Endometriosis, a painful and poorly understood condition that involves endometrial tissue growing outside the uterus, affects over 11 percent of women aged 15 to 44 in the US, many of whom wait years for a diagnosis. Millions more suffer during menopause from night sweats, memory lapses and sleep difficulties. Too many dismiss all this pain and suffering as natural — something to be endured.

The leading cause of death among US women is heart disease. A 2022 study of emergency room visits by adults 55 and under revealed that women who came in with chest pain waited longer to see a doctor or nurse and were less likely to be admitted for observation than men. A 2009 experimental study found that when women and men reported exactly the same cardiovascular symptoms, doctors were less certain of how to diagnose women than men, and were twice as likely to misdiagnose middle-aged women with a mental health condition compared with men.

Similar things happen with other health conditions. For example, women who came to an emergency room with abdominal pain in the US waited longer for pain medication, and were less likely to be given opioid analgesics, than men.

These statistics all point in the same direction. The United States is failing women’s health. But why?

People often assume that the main reason for women’s poor health is underlying sex-based biology. But biology is unlikely to explain why women in the US die younger than women in other high-income countries. Neither is health care spending. The US spends more per capita on health care than any other country in the world.

The root cause of US women’s poor health is non-medical. It is systemic inequity: everything from unfair structures and practices that benefit the advantaged, to gender bias in science, to cultural expectations about what can and should be. Scientists have shown how sexism — together with racism, nativism, ablism, and other systems of privilege and oppression — shape the scientific questions we ask, as well as our everyday experiences, with profound implications for health.

It’s powerfully telling that Indigenous women and Black women in the US are two to three times more likely to die from pregnancy-related complications than white women. That less educated women die years earlier than more educated women, and that women in Mississippi die younger than women in Massachusetts. Some suggest that the source of these inequalities lies in preexisting chronic conditions and things like obesity, smoking and individual actions labeled “health behaviors” that are assumed to be a matter of personal choice. But this misses the point. These differences, too, reflect systemic inequity. Our bodies — indeed, our biology — do not exist apart from our social surroundings.

To make change, a shift towards equity — in and out of science — is needed.

Inclusive science means, among other things, equitable funding. Despite progress, a 2021 study reported that the National Institutes of Health (NIH) — the largest public funder of health research in the US — tends to overfund research on diseases that disproportionately affect men, while underfunding those primarily affecting women. Funding for research on the health of transgender and gender non-binary people also lags. On the hopeful side, the NIH’s Office of Research on Women’s Health, the National Institute on Minority Health and Health Disparities, and the Office of Behavioral and Social Science Research, among others, are working to advance research on the social foundations of health. That should be applauded.

The overturn of Roe v. Wade, and recent moves to legislate abortion bans, undermine everyone’s health. Laws matter, and changing laws in the direction of equity (instead of away from it), would be an important step. But laws alone can’t create the shift we need. Systemic injustice courses through all sectors, and will give rise to unjust legislation or practices again and again. We need a wholescale social movement that is broader.

We need to think things can and should be different, and make them so. Systems and structures rely on people to create and maintain them. The progress of the MeToo and Black Lives Matter movements are signs of hope. We can get there: It’s time to double down and advocate for health for all.

Lea en español

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Susan E. Short and Meghan Zacher are sociologists at the Population Studies and Training Center at Brown University. They research the social foundations of health.

This article originally appeared in Knowable Magazine, an independent journalistic endeavor from Annual Reviews.

The obscure calculation transforming climate policy

After long debate, economists and philosophers are reaching consensus on how to value future generations

By Ula Chrobak

Barring a mass Homo sapiens extinction event from, say, nuclear war or another disaster, many more billions of humans will be born on the Earth in the coming millennia. For philosophers and economists, this poses a tricky question: What do we owe these future humans? How should we divide our resources between the 8 billion people alive now and those to come?

This isn’t just fodder for a thorny thought experiment. While it’s not often stated explicitly, all governments make trade-offs with the welfare of future generations when they make decisions that have long-term consequences, such as those related to energy production and infrastructure. Economists have even devised calculations to better explore such trade-offs, as well as a key variable — the social discount rate — which has been the subject of a hot debate for at least the past 15 years.

Just last month, the Biden Administration proposed a consequential change for how the United States handles the math used to probe this ethical question. Officials recommended that the government nearly quadruple its social cost of carbon — a monetary estimate of the costs to the economy, environment and human welfare for every ton of carbon dioxide emitted into the atmosphere.

This value can be used to calculate, in dollars, the effect of various actions, such as the benefit of avoided carbon emissions from a new subway route or the costs of building natural gas lines. To reach this new estimate, officials used a new social discount rate: 2 percent, down from the 3 percent used previously (a larger discount rate translates into a lower cost). Because the resulting social cost of carbon is so much higher, this change makes it suddenly look far more costly to pollute — or to approve policies that would increase greenhouse gas emissions.

Climate policy wonks, many of whom wrote to the government to voice their opinions, closely watched this development because it could lead to a shift in how the US — the world’s greatest cumulative emitter of greenhouse gases — regulates its contribution of climate-heating gases. But the US is just one of many entities using social discount rates to estimate how much it’s worth, in today’s dollars, to avoid billions in climate damage in future decades.

Across influential institutions around the world — including governments as well as financial organizations such as the World Bank — economists punch social discount rates into mathematical formulas to weigh the future costs and benefits of proposals to build new bridges and roads, invest in clean energy research and regulate greenhouse gases. You’re probably already familiar with the results of these analyses, even if you didn’t know about social discount rates. Consider when a politician says that a proposed environmental regulation would cause too much harm to the economy, for example. How do officials make those calls? The secret ingredient is social discount rates. 

“It is probably the single most important variable in terms of working out what you have to do for climate change mitigation,” says Mark Freeman, an economist focused on intergenerational finance at the University of York and coauthor of a recent review of social discounting in the Annual Review of Resource Economics. He concludes this based on current research that found that the social cost of carbon is more sensitive to policymakers’ choice of discount rate than other variables. “People need to worry about this more. It matters.” 

Seemingly small changes in discount rates can result in vastly different climate policy outcomes. During the Trump administration, officials claimed that a rollback in automobile fuel efficiency standards would result in $6.4 billion in economic benefits. They based their calculations on a discount rate of 7 percent, which “basically means you don’t care about anything that happens after about 25 years,” says Ben Groom, an economist at the University of Exeter and lead author of the Annual Review of Resource Economics paper. Under President Barack Obama, those same fuel efficiency standards had been deemed to produce a net economic benefit based on a 3 percent discount rate.

Economists use discounting to weigh the pros and cons of getting things sooner rather than later. For individuals, such calculations can be pretty straightforward: “If I were to offer you a Lamborghini today or a Lamborghini in 10 years, who’s going to wait for 10 years?” Freeman sometimes asks his students. Our preference for getting that Lambo today — or an equivalent sum of cash, if you don’t care for sports cars — isn’t just impatience. It’s rational, in economic terms. A hundred dollars is, generally, going to be worth more if you get it today rather than in a year. That’s due to factors like inflation, as well as the lost opportunity to invest your Benjamin today and watch it grow with compound interest.

When economists consider the impacts of an investment today on the welfare of large groups of people, the discount rate becomes a social discount rate — and weighing the factors that influence the rate gets more complicated. One reason is that policymakers can’t snap their fingers and pour money into every public need at once. Instead, they have to assess the most cost-effective use of funds by adding up all the costs of a program or policy, then adding up all the benefits, and comparing the two price tags.

These comparisons are relatively easy when considering a project with immediate results, such as an investment in schools or safe drinking water. But sometimes officials have to compare near-term priorities with projects that may not fully pay off for 100 or more years, as is the case with many climate policies. It’s not always selfishness that might prevent policymakers from acting on climate change, says Tamma Carleton, an economist at the University of California, Santa Barbara. “They are also trying to think about our educational systems, poverty eradication and healthcare.”

Economists use social discount rates to determine how much a future benefit, like $1 trillion in averted climate damages in 2100, would be worth today, explains Carleton. In the US, federal agencies are required to prepare cost-benefit analyses for projects that could have a large economic impact now or in the future. If the benefits far outweigh the costs, a proposed rule or bill is more likely to be seen as viable and move forward.

But here you might say, is it really necessary to discount future people in order to do these comparisons?

Welcome to one of the most consequential yet obscure ethical debates known to humankind. About 15 years ago, Nicholas Stern, a climate economist at the London School of Economics, set off an argument about discounting that continues today. In the 2006 UK government study led by Stern, The Economics of Change: The Stern Review, he used a social discounting approach that explicitly took our ethical responsibility to future generations into account.

Stern used a very low discount rate, 1.4 percent, to support the conclusion that large investments were urgently needed to prevent future climate damages. That value — while still discounting a small amount for future economic growth and the possibility of human extinction — treated the welfare of future generations equally. As he and coauthors summed up, “if a future generation will be present, we suppose that it has the same claim on our ethical attention as the current one.”

However, future economic growth is not 100 percent guaranteed, and the damage wrought by climate change could worsen life for individuals in the next century. In this scenario, some economists have argued, using a zero or even a negative discount rate would make the most sense.

These arguments have irked some economists, including William Nordhaus of Yale University, who was awarded a Nobel Prize in 2018 for his work in climate change economics. “The Review takes the lofty vantage point of the world social planner, perhaps stoking the dying embers of the British Empire, in determining the way the world should combat the dangers of global warming,” he wrote in a paper published in the Journal of Economic Literature. Nordhaus thought that Stern’s approach risked impoverishing people today to tackle future climate change, and favored a higher discount rate based on market interest and savings rates.

Today, most economists favor some amount of discounting, for two reasons: People tend to be impatient, and future people will be richer than today’s. This desire for more immediate payoff isn’t necessarily a bad thing, says Freeman. Most of us already discount future people, he points out. “I mean, I love my children more than I love my great-, great-, great-grandchildren,” he says. “So why should I not value my children more than my great-, great-, great-grandchildren?”

While it may seem intuitive to say future people deserve the same consideration as people today, many economists counter that the people of the future will probably be richer as a result of economic growth. And the same sum of money is less meaningful for a rich person compared to a poor person. “One hundred dollars matters more for me than it does for Jeff Bezos,” says Carleton. Adds Groom: “If the future is richer, then we are the poor people.” Groom and others argue that putting money toward future people without discounting is like taking money from the poor to give to the rich.

Some experts — including economists and philosophers focused on intergenerational ethics — add that we need to consider the possibility that the human species will go extinct. It would be a shame, they say, to go all in on programs benefiting humans hundreds of years from now, only for them to end up dying out due to a meteorite or nuclear war.

Increasingly, governments are using lower discount rates to reflect the urgent need to address climate-warming emissions. The recent US Environmental Protection Agency report used a 2 percent discount rate as one factor in recalculating the social cost of a ton of carbon, down from the 3 percent rate used by the Obama administration. The adjustment contributed to an increase to $190 from $51 per ton. Earlier, at the end of 2020, New York State officials updated their own social cost of carbon to $125 a ton, also by using a discount rate of 2 percent. The change affects many government decisions, explains Maureen Leddy, director of the state’s office of climate change. For example, an agency purchasing new vehicles for its fleet has to factor in the social cost of carbon emissions generated by buying gas-powered cars, which could make electric vehicles look much less expensive in comparison. 

But why is 2 percent so hot these days? One reason is that the rate seems to bridge the ethics-versus-pure-economics divide. In survey research, Freeman and Groom found that the median discount rate chosen by both economists and philosophers was 2 percent, which in turn supports policy actions that are expected to limit global warming to 1.5°C by 2100. The two groups don’t necessarily get to that number the same way, but they seem to agree that rate is best for discounting long-term government projects, such as those that would affect climate change. 

That said, it might not be fair to use the same low social discount rates worldwide. A low discount rate might motivate climate action in richer countries, but shouldn’t necessarily be used in less developed countries, explains Nfamara Dampha, a researcher of natural capital and ecosystem services at the University of Minnesota and an author of a review on discounting and environmental change in the Annual Review of Environment and Resources. “The problem with [using] the same approach in developing countries is that there is already a lot of poverty, there is already a lot of inequality,” he says. By using a low discount rate, “you’re constraining those people to minimize their consumption for the benefit of the future.” 

For countries with acute problems such as a lack of clean water, higher discount rates may be warranted to direct public funds toward the immediate benefits of alleviating such issues. Meanwhile, Dampha says that wealthier countries that have contributed a large share of climate-warming emissions should use low discount rates when funding environmental projects in developing countries, as a matter of climate justice. “The payments for ecosystem services should be sourced globally to developing countries,” he says. 

In the future, Freeman hopes that the public can be more involved in discussions involving social discount rates. “At the moment, it’s all very behind closed doors, which isn’t great,” he says. “Why should I have any special say in what the discount rate is?” At their core, after all, these social discount rates are political decisions — ones that can directly impact policies, including how to temper the worst effects of climate change.

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Ula Chrobak is a freelance science journalist based in Reno, Nevada. You can read more of her work at her website: ulachrobak.com.

This article originally appeared in Knowable Magazine, an independent journalistic endeavor from Annual Reviews.

Monday, April 10, 2023

Fiber optics take the pulse of the planet

It’s like radar, but with light. Distributed acoustic sensing — DAS — picks up tremors from volcanoes, quaking ice and deep-sea faults, as well as traffic rumbles and whale calls.

By Carolyn Wilke

Andreas Fichtner strips a cable of its protective sheath, exposing a glass core thinner than a hair — a fragile, 4-kilometer-long fiber that’s about to be fused to another. It’s a fiddly task better suited to a lab, but Fichtner and his colleague Sara Klaasen are doing it atop a windy, frigid ice sheet.

After a day’s labor, they have spliced together three segments, creating a 12.5-kilometer-long cable. It will stay buried in the snow and will snoop on the activity of Grímsvötn, a dangerous, glacier-covered, Icelandic volcano.

Sitting in a hut on the ice later on, Fichtner’s team watches as seismic murmurs from the volcano beneath them flash across a computer screen: earthquakes too small to be felt but readily picked up by the optical fiber. “We could see them right under underneath our feet,” he says. “You’re sitting there and feeling the heartbeat of the volcano.”

Fichtner, a geophysicist at the Swiss Federal Institute of Technology in Zurich, is one of a cadre of researchers using fiber optics to take the pulse of our planet. Much of this work is being done in remote places, from the tops of volcanoes to the bottoms of the seas, where traditional monitoring is too costly or difficult. There, in the last five years, fiber optics have started to shed light on seismic rumblings, ocean currents and even animal behaviors.

Grímsvötn’s ice sheet, for example, sits on a lake of water thawed by the volcano’s heat. Data from the new cable reveal that the floating ice field serves as a natural loudspeaker, amplifying tremors from below. The work suggests a new way to eavesdrop on the activity of volcanoes that are sheathed by ice — and so catch tremors that may herald eruptions.

Like radar, but with light

The technique used by Fichtner’s team is called distributed acoustic sensing, or DAS. “It’s almost like radar in the fiber,” says physicist Giuseppe Marra of the United Kingdom’s National Physical Laboratory in Teddington, England. While radar uses reflected radio waves to locate objects, DAS uses reflected light to detect events, from seismic activity to moving traffic, and to determine where they occurred.

It works like this: A laser source at one end of the fiber shoots out short pulses of light. As a pulse moves along the fiber, most of its light continues forward. But a fraction of the light’s photons bang into intrinsic flaws in the fiber — spots of abnormal density. These photons scatter, some of them traveling all the way back to the source, where a detector analyzes this reflected light for hints about what occurred along the fiber’s length.

An optical fiber for DAS typically stretches several to tens of kilometers, and it moves or bends in response to disturbances in the environment. “It wiggles as cars go by, as earthquakes happen, as tectonic plates move,” says earth scientist Nate Lindsey, coauthor of a 2021 article on fiber optics for seismology in the Annual Review of Earth and Planetary Sciences. Those wiggles change the reflected light signal and allow researchers to tease out information such as how an earthquake bent a cable at a certain point.

An optical cable captures vibrations, for instance, of seismic tremors along its whole length. In contrast, a typical seismic sensor, or seismometer, relays information from only one spot. And seismometers can be costly to deploy and difficult to maintain, says Lindsey, who works at a company called FiberSense that is using fiber-optic networks for applications in city settings.

DAS can provide about 1 meter resolution, turning a 10-kilometer fiber into something like 10,000 sensors, Lindsey says. Researchers can sometimes piggyback off existing or decommissioned telecommunications cables. In 2018, for example, a group including Lindsey, who was then at UC Berkeley and Lawrence Berkeley National Laboratory, turned a 20-kilometer cable operated by the Monterey Bay Aquarium Research Institute — normally used to film coral, worms and whales — into a DAS sensor while the system was offline for maintenance.

“The ability to just go under the seafloor for tens of kilometers — it is remarkable that you can do that,” Lindsey says. “Historically, deploying one sensor on the seafloor can cost $10 million.”

During their four-day measurement, the team caught a 3.4-magnitude earthquake shaking the ground some 30 kilometers away in Gilroy, California. For Lindsey’s team, it was a lucky strike. Earth scientists can use seismic signals from earthquakes to get a sense of the structure of the ground that the quake has traveled through, and the signals from the fiber-optic cable allowed the team to identify several previously unknown submarine faults. “We’re using that energy to basically illuminate this structure of the San Andreas Fault,” Lindsey says.

Eavesdropping on cities and cetaceans

DAS was pioneered by the oil and gas industry to monitor wells and detect gas in boreholes, but researchers have been finding a variety of other uses for the technique. In addition to earthquakes, it has been harnessed to monitor traffic and construction noise in cities. In densely populated metropolises with significant seismic hazards, such as Istanbul, DAS could help to map the sediments and rocks in the subsurface to reveal which areas would be the most dangerous during a large quake, Fichtner says. A recent study even reported eavesdropping on whale songs using a seabed optical cable near Norway.

But DAS comes with some limitations. It’s tricky to get good data from fibers longer than 100 kilometers. The same flaws in the cables that make light scatter — producing the reflected light that is measured — can deplete the signal from the source. With enough distance traveled, the original pulse would be completely lost.

But a newer, related method may provide an answer — and perhaps allow researchers to spy on a mostly unmonitored seafloor, using existing cables that shuttle the data of billions of emails and streaming binges.

In 2016, Marra’s team sought a way to compare the timekeeping of ultraprecise atomic clocks at distant spots around Europe. Satellite communications are too slow for this job, so the researchers turned to buried optical cables instead. At first, it didn’t work: Environmental disturbances introduced too much noise into the messages that the team sent along the cables. But the scientists sensed an opportunity. “That noise that we want to get rid of actually contains very interesting information,” Marra says.

Using state-of-the-art methods for measuring the frequency of light waves bouncing along the fiber-optic cable, Marra and colleagues examined the noise and found that — like DAS — their technique detected events like earthquakes through changes in the light frequencies.

Instead of pulses, though, they use a continuous beam of laser light. And unlike in DAS, the laser light travels out and back on a loop; then the researchers compare the light that comes back with what they sent out. When there are no disturbances in the cable, those two signals are the same. But if heat or vibrations in the environment disturb the cable, the frequency of the light shifts.

With its research-grade light source and measurement of a large amount of the light initially emitted — as opposed to just what’s reflected — this approach works over longer distances than DAS does. In 2018, Marra’s team demonstrated that they could detect quakes with undersea and underground fiber-optic cables up to 535 kilometers long, far exceeding DAS’s limit of around 100 kilometers.

This offers a way to monitor the deep ocean and Earth systems that are usually hard to reach and rarely tracked using traditional sensors. A cable running close to the epicenter of an offshore earthquake could improve on land-based seismic measurements, providing perhaps minutes more time for people to prepare for a tsunami and make decisions, Marra says. And the ability to sense changes in seafloor pressure may open the door to directly detecting tsunamis too.

In late 2021, Marra’s team managed to sense seismicity across the Atlantic on a 5,860-kilometer optical cable running on the seafloor between Halifax in Canada and Southport in England. And they did so with far greater resolution than before, because while earlier measurements relied on accumulated signals from across the entire submarine cable’s length, this work parsed changes in light from roughly 90-kilometer spans between signal-amplifying repeaters.

Fluctuations in intensity of the signal picked up on the transatlantic cable appear to be tidal currents. “These are essentially the cable being strummed as a guitar string as the currents go up and down,” Marra says. While it’s easy to watch currents at the surface, seafloor observations can improve an understanding of ocean circulation and its role in global climate, he adds.

So far, Marra’s team is alone in using this method. They’re working on making it easier to deploy and on providing more accessible light sources.

Researchers are continuing to push sensing techniques based on optical fibers to new frontiers. Earlier this year, Fichtner and a colleague journeyed to Greenland, where the East Greenland Ice-Core Project is drilling a deep borehole into the ice sheet to remove an ice core. Fichtner’s team then lowered a fiber-optic cable 1,500 meters, by hand — and caught a cascade of icequakes, rumbles that result from the bedrock and ice sheet rubbing together.

Icequakes can deform ice sheets and contribute to their flow toward the sea. But researchers haven’t had a way before now to investigate how they happen: They are invisible at the surface. Perhaps fiber optics will finally bring their hidden processes into the light.

Lea en español

Carolyn Wilke is a Chicago-based freelance science journalist. Find her on Twitter @carolynmwilke.

This article originally appeared in Knowable Magazine, an independent journalistic endeavor from Annual Reviews.

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America is failing women’s health

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Monday, April 10, 2023

Fiber optics take the pulse of the planet

Like radar, but with light

Eavesdropping on cities and cetaceans