Group items tagged

In his 2007 history of the movement, Radicals for Capitalism, Brian Doherty identifies five key figures who most shaped the nascent ideology and its organized advocacy: author Ayn Rand, and economists Ludwig von Mises, F. A. Hayek, Milton Friedman, and Murray Rothbard

With one exception, all paired radical free-market and smaller government views with liberal tolerance and cosmopolitanism on social issues. None were religious, and Rand and Mises were both avowedly irreligious. Friedman and Hayek both trended more moderate and pragmatic, and also achieved the highest degree of mainstream intellectual recognitio

It was in Rothbard that the divergence began which today has culminated in the Libertarian Party’s convention transforming into a literal Trump rally

He was in many ways the most radical—an avowed anarchist—and the most marginal

he was also the most involved in creating a self-consciously libertarian movement and many of its institutions. In this he was aided by his skills as a prolific polemicist.

From the start, Trump’s brand of illiberal populism had more than a passing resemblance to Rothbard’s paleo strategy—minus, as many classical liberal critics had long predicted, any meaningful moves to actually shrink government

By accommodating and embracing conservative culture warriors, even including avowed white supremacists, Rothbard believed he was forming the basis of a political coalition to demolish modern big government

it included an open embrace of police brutality, fuming about the need to “dispense instant punishment” to “bums,” while railing against efforts to undo America’s white supremacist past. Later, opposition to immigration became one of the paleo posture’s signature issues.

Across the loose constellation of libertarian think tanks, advocacy organizations, and electoral efforts in both the L.P. and the GOP, the embrace or rejection of Rothbard’s “paleo” idea was a source of perennial tension. Rothbard himself was involved for a time in both the Libertarian Party and the Cato Institute, co-founding the latter before being acrimoniously ejected after a few years.

the other end of the movement came to embrace the view of libertarianism as fundamentally an extension of the larger liberal tradition, continuous with a classical liberal political philosophy rather than a socially conservative one.

Free markets and limited government were still a big part of the picture, but in service to a vision of a dynamic and pluralistic free society.

As much as each held a dim view of the other, both continued to work under the “libertarian” label.

As he outlined in a 1992 essay, “Right Wing Populism: A Strategy for the Paleo Movement,” paleolibertarianism was an explicit alliance between small-government radicalism and the extremist far-right.

it still embodied the burn-it-all-down reactionary ethos that saw tearing down established institutions as a necessary first step, even if that required an unrestrained autocrat

After the deadly 2017 neo-Nazi rally in Charlottesville, the then party leadership denounced the “blood and soil” rhetoric. But to the Rothbardians, this smacked of unacceptable wokeness. Within a few days, the Mises Caucus—named more for the ideas exhibited by the think-tank than the actual economist—was founded. Over the next few years, this group began launching hostile takeovers of state parties and then the national party. As they did so, the party increasingly adopted rhetoric that sounded more like the tiki-torch brigade than one committed to individual liberty.

The two camps within the movement—the cosmopolitan and the paleo—already strained to nearly the breaking point, went through the inevitable rupture. A number of differences and disagreements fueled the split, but most central was the divide into MAGA-friendly and anti-Trump sympathies.

It is no longer possible to ignore the conflict of visions about what kind of society freedom was supposed to yield. One in which private bigotry and established hierarchies were allowed free rein? Or an open and all-embracing one where different people and lifestyles disapproved by the traditional order could flourish?

The only way the libertarian movement’s demise could bring down libertarianism as a political-philosophical framework is if one expected the ideas themselves to disappear. Happily, a robust conviction of the centrality of individual liberty—or of the need to fight a tyrannical state—is in no danger of fully fading away.

Everywhere, new investment in green energy generation is being propelled by general concern for the climate, shifting corporate and household demand, the plunging prices for solar and batteries triggered by Chinese policy, and a combination of national and regional interventions

How different would we expect this data to look without the IRA?

The most useful overview of these modeling efforts that I have been able to find is by Bistline et al “Power sector impacts of the Inflation Reduction Act of 2022” in Environmental Research Letters November 2023. If anyone has a better source, please let me know.

The top panel shows the historical trajectory of US generating capacity from 1980 to 2021. The second half of the graphic shows how 11 different models predict that the US electricity system might be expected to develop up to 2035, with and without IRA.

all the models expect the trends of the 2010s to continue through to the 2030s which means that solar, wind and battery storage dominate America’s energy future. Even without the IRA, the low carbon share of electricity generation will likely rise to 50-55% by 2035. Bidenomics bumps that to 70-80 percent.

The question is: “How does the renewable surge of 2022-2024, compare to the model-based expectations, with and without the IRA?”

The answer is either, “so so”, or, more charitably, it is “too early to tell”. In broad terms the current rate of expansion is slightly above the rate the models predict without the provision of additional Bidenomics incentives. But what is also clear is that the current rate of expansion, is far short of the long-run pace that should be expected from the IRA

At this point, defenders of the IRA interject that the IRA has only just come into effect. Cash from the IRA is only beginning to flow. And in an environment of higher costs for renewable energy equipment and higher interest rates, cash matters.

As Yakov Feygin put it: “Maybe the pithiest way to put it is that there are pre-IRA trends and outside IRA trends, but IRA has served to rapidly compress the timeframes for installation in a lot of technologies. So five years has turned into two, for example.”

So, to judge the impact of the IRA to date, the real question is not what has been built in 2022 and 2023, but what is in the pipeline.

Advised by JP Morgan, sophisticated global players like Ørsted are optimizing their use of both the production and investment tax credits offered by the IRA to launch large new renewable schemes. Of course, correlation is not the same as causation

Where the IRA is perhaps doing its most important work may be in incentivizing the middle bracket of projects where green momentum is less certain.

According to Utility Drive: “The 10 largest U.S. developers plan to build 110,364 MW of new wind and solar projects over the next five years, according to S&P Global Market Intelligence, but the majority of these projects remain in early stages of development. Just 15% of planned wind and solar projects are under construction, and 13% are considered to be in advanced stages of development, … ”

The states that I have highlighted in red stand out either for their unusually low existing level of renewable power capacity or their lack of current momentum.

Along with Texas, the pipelines for the PJM, MISO and Southeast regions (which includes Florida) look particularly healthy.

The relatively modest California numbers should not be a surprise. As Yakov Feygin and others pointed out, what is needed in California is not more raw generating capacity, but more battery storage. And that is what we are seeing in the data.

The numbers would be even larger if it were not for the truly surreal logjam in California’s system for authorizing interconnections. According to Hamilton/Brookings data the volume of hybrid solar and batter capacity in the queue for approval is 6.5 times the capacity currently operating in the state. In other words there is an entire energy transition waiting to happen when the overloaded managerial processes of the system catch up

Texas’s less bureaucratic system seems to be one of its key advantages in the extremely rapid roll-out of solar.

though it may be true that globally speaking the United States as a whole is a laggard in renewable energy development,

If California (with an economy roughly comparable to that of Germany at current exchange rates) and Texas (with an economy roughly the size of Italy’s) were countries, they would be #3 and #5 in the world in solar capacity per capita.

the obvious question is, which are the laggards in the US energy system.

So there is a lot to get excited about, at, what we are learning to call, the “meso”-level of the economy (more on this in a future post).

What the state-level data reveal is that there are a significant number of large states in the USA where solar and wind energy have barely made any impact. Pennsylvania, for instance

The relative levels of sunshine between US states is irrelevant. As the global solar atlas shows, the entire United States has far better solar potential than North West Europe. If you can grow corn and tobbaco, you can do utility-scale solar. The fact that Arizona is not a solar giant is mind boggling.

Texas is both big and truly remarkable. California already is a world leader in renewable energy. Meanwhile, the majority of the US electricity system presents a very different picture. There is a huge distance to be traveled and the pace of solar build-out is unremarkable.

This is where national level incentives like the IRA must prove themselves

And these local battles in America matter. Given the extremely high per capita energy consumption in the USA, greening state-level energy systems is significant at the global level. It does not compare to the super-sized levels of emissions in China, but it matters.

Indonesia’s total installed electricity generating capacity is rated at 81 GW. As far as immediate impact on the global carbon balance is concerned, cleaning up the power systems of Pennsylvania and Illinois would make an even bigger impact.

A key test of Biden-era climate and industrial policy will be whether it can untie the local political economy of fossil fuels, which, across many regions of the United States still stands in the way of a green energy transition that now has all the force of economics and technological advantage on its side.

A closer look, however, would have revealed that individual journalists at BNN published lengthy stories as often as multiple times a minute, writing in generic prose familiar to anyone who has tinkered with the A.I. chatbot ChatGPT.

How easily the site and its mistakes entered the ecosystem for legitimate news highlights a growing concern: A.I.-generated content is upending, and often poisoning, the online information supply.

The websites, which seem to operate with little to no human supervision, often have generic names — such as iBusiness Day and Ireland Top News — that are modeled after actual news outlets. They crank out material in more than a dozen languages, much of which is not clearly disclosed as being artificially generated, but could easily be mistaken as being created by human writers.

Now, experts say, A.I. could turbocharge the threat, easily ripping off the work of journalists and enabling error-ridden counterfeits to circulate even more widely — as has already happened with travel guidebooks, celebrity biographies and obituaries.

The result is a machine-powered ouroboros that could squeeze out sustainable, trustworthy journalism. Even though A.I.-generated stories are often poorly constructed, they can still outrank their source material on search engines and social platforms, which often use A.I. to help position content. The artificially elevated stories can then divert advertising spending, which is increasingly assigned by automated auctions without human oversight.

NewsGuard, a company that monitors online misinformation, identified more than 800 websites that use A.I. to produce unreliable news content.

Low-paid freelancers and algorithms have churned out much of the faux-news content, prizing speed and volume over accuracy.

Former employees said they thought they were joining a legitimate news operation; one had mistaken it for BNN Bloomberg, a Canadian business news channel. BNN’s website insisted that “accuracy is nonnegotiable” and that “every piece of information underwent rigorous checks, ensuring our news remains an undeniable source of truth.”

this was not a traditional journalism outlet. While the journalists could occasionally report and write original articles, they were asked to primarily use a generative A.I. tool to compose stories, said Ms. Chakraborty and Hemin Bakir, a journalist based in Iraq who worked for BNN for almost a year. They said they had uploaded articles from other news outlets to the generative A.I. tool to create paraphrased versions for BNN to publish.

Mr. Chahal’s evangelism carried weight with his employees because of his wealth and seemingly impressive track record, they said. Born in India and raised in Northern California, Mr. Chahal made millions in the online advertising business in the early 2000s and wrote a how-to book about his rags-to-riches story that landed him an interview with Oprah Winfrey.

Mr. Chahal told Mr. Bakir to focus on checking stories that had a significant number of readers, such as those republished by MSN.com.Employees did not want their bylines on stories generated purely by A.I., but Mr. Chahal insisted on this. Soon, the tool randomly assigned their names to stories.

This crossed a line for some BNN employees, according to screenshots of WhatsApp conversations reviewed by The Times, in which they told Mr. Chahal that they were receiving complaints about stories they didn’t realize had been published under their names.

According to three journalists who worked at BNN and screenshots of WhatsApp conversations reviewed by The Times, Mr. Chahal regularly directed profanities at employees and called them idiots and morons. When employees said purely A.I.-generated news, such as the Fanning story, should be published under the generic “BNN Newsroom” byline, Mr. Chahal was dismissive.“When I do this, I won’t have a need for any of you,” he wrote on WhatsApp.Mr. Bakir replied to Mr. Chahal that assigning journalists’ bylines to A.I.-generated stories was putting their integrity and careers in “jeopardy.”

This was a strategy that Mr. Chahal favored, according to former BNN employees. He used his news service to exercise grudges, publishing slanted stories about a politician from San Francisco he disliked, Wikipedia after it published a negative entry about BNN Breaking and Elon Musk after accounts belonging to Mr. Chahal, his wife and his companies were suspended o

The increasing popularity of programmatic advertising — which uses algorithms to automatically place ads across the internet — allows A.I.-powered news sites to generate revenue by mass-producing low-quality clickbait content

Experts are nervous about how A.I.-fueled news could overwhelm accurate reporting with a deluge of junk content distorted by machine-powered repetition. A particular worry is that A.I. aggregators could chip away even further at the viability of local journalism, siphoning away its revenue and damaging its credibility by contaminating the information ecosystem.

Dr. Shi’s group was fascinated by how coronaviruses jump from species to species. To find viruses, they took samples from bats and other animals, as well as from sick people living near animals carrying these viruses or associated with the wildlife trade. Much of this work was conducted in partnership with the EcoHealth Alliance, a U.S.-based scientific organization that, since 2002, has been awarded over $80 million in federal funding to research the risks of emerging infectious diseases.

Their research showed that the viruses most similar to SARS‑CoV‑2, the virus that caused the pandemic, circulate in bats that live roughly 1,000 miles away from Wuhan. Scientists from Dr. Shi’s team traveled repeatedly to Yunnan province to collect these viruses and had expanded their search to Southeast Asia. Bats in other parts of China have not been found to carry viruses that are as closely related to SARS-CoV-2.

When the Covid-19 outbreak was detected, Dr. Shi initially wondered if the novel coronavirus had come from her laboratory, saying she had never expected such an outbreak to occur in Wuhan.

The SARS‑CoV‑2 virus is exceptionally contagious and can jump from species to species like wildfire. Yet it left no known trace of infection at its source or anywhere along what would have been a thousand-mile journey before emerging in Wuhan.

The year before the outbreak, the Wuhan institute, working with U.S. partners, had proposed creating viruses with SARS‑CoV‑2’s defining feature

The laboratory pursued risky research that resulted in viruses becoming more infectious: Coronaviruses were grown from samples from infected animals and genetically reconstructed and recombined to create new viruses unknown in nature. These new viruses were passed through cells from bats, pigs, primates and humans and were used to infect civets and humanized mice (mice modified with human genes). In essence, this process forced these viruses to adapt to new host species, and the viruses with mutations that allowed them to thrive emerged as victors.

Worse still, as the pandemic raged, their American collaborators failed to publicly reveal the existence of the Defuse proposal. The president of EcoHealth, Peter Daszak, recently admitted to Congress that he doesn’t know about virus samples collected by the Wuhan institute after 2015 and never asked the lab’s scientists if they had started the work described in Defuse.

By 2019, Dr. Shi’s group had published a database describing more than 22,000 collected wildlife samples. But external access was shut off in the fall of 2019, and the database was not shared with American collaborators even after the pandemic started, when such a rich virus collection would have been most useful in tracking the origin of SARS‑CoV‑2. It remains unclear whether the Wuhan institute possessed a precursor of the pandemic virus.

In 2021, The Intercept published a leaked 2018 grant proposal for a research project named Defuse, which had been written as a collaboration between EcoHealth, the Wuhan institute and Ralph Baric at the University of North Carolina, who had been on the cutting edge of coronavirus research for years. The proposal described plans to create viruses strikingly similar to SARS‑CoV‑2.

Coronaviruses bear their name because their surface is studded with protein spikes, like a spiky crown, which they use to enter animal cells. The Defuse project proposed to search for and create SARS-like viruses carrying spikes with a unique feature: a furin cleavage site — the same feature that enhances SARS‑CoV‑2’s infectiousness in humans, making it capable of causing a pandemic. Defuse was never funded by the United States.

owever, in his testimony on Monday, Dr. Fauci explained that the Wuhan institute would not need to rely on U.S. funding to pursue research independently.

While it’s possible that the furin cleavage site could have evolved naturally (as seen in some distantly related coronaviruses), out of the hundreds of SARS-like viruses cataloged by scientists, SARS‑CoV‑2 is the only one known to possess a furin cleavage site in its spike. And the genetic data suggest that the virus had only recently gained the furin cleavage site before it started the pandemic.

Ultimately, a never-before-seen SARS-like virus with a newly introduced furin cleavage site, matching the description in the Wuhan institute’s Defuse proposal, caused an outbreak in Wuhan less than two years after the proposal was drafted.

When the Wuhan scientists published their seminal paper about Covid-19 as the pandemic roared to life in 2020, they did not mention the virus’s furin cleavage site — a feature they should have been on the lookout for, according to their own grant proposal, and a feature quickly recognized by other scientists.

At the Wuhan Institute of Virology, a team of scientists had been hunting for SARS-like viruses for over a decade, led by Shi Zhengl

In May, citing failures in EcoHealth’s monitoring of risky experiments conducted at the Wuhan lab, the Biden administration suspended all federal funding for the organization and Dr. Daszak, and initiated proceedings to bar them from receiving future grants. In his testimony on Monday, Dr. Fauci said that he supported the decision to suspend and bar EcoHealth.

Separately, Dr. Baric described the competitive dynamic between his research group and the institute when he told Congress that the Wuhan scientists would probably not have shared their most interesting newly discovered viruses with him. Documents and email correspondence between the institute and Dr. Baric are still being withheld from the public while their release is fiercely contested in litigation.

In the end, American partners very likely knew of only a fraction of the research done in Wuhan. According to U.S. intelligence sources, some of the institute’s virus research was classified or conducted with or on behalf of the Chinese military.

In the congressional hearing on Monday, Dr. Fauci repeatedly acknowledged the lack of visibility into experiments conducted at the Wuhan institute, saying, “None of us can know everything that’s going on in China, or in Wuhan, or what have you. And that’s the reason why — I say today, and I’ve said at the T.I.,” referring to his transcribed interview with the subcommittee, “I keep an open mind as to what the origin is.”

The Wuhan lab pursued this type of work under low biosafety conditions that could not have contained an airborne virus as infectious as SARS‑CoV‑2.

Labs working with live viruses generally operate at one of four biosafety levels (known in ascending order of stringency as BSL-1, 2, 3 and 4) that describe the work practices that are considered sufficiently safe depending on the characteristics of each pathogen. The Wuhan institute’s scientists worked with SARS-like viruses under inappropriately low biosafety conditions.

​​Biosafety levels are not internationally standardized, and some countries use more permissive protocols than others.

In one experiment, Dr. Shi’s group genetically engineered an unexpectedly deadly SARS-like virus (not closely related to SARS‑CoV‑2) that exhibited a 10,000-fold increase in the quantity of virus in the lungs and brains of humanized mice. Wuhan institute scientists handled these live viruses at low biosafety levels, including BSL-2.

Even the much more stringent containment at BSL-3 cannot fully prevent SARS‑CoV‑2 from escaping. Two years into the pandemic, the virus infected a scientist in a BSL-3 laboratory in Taiwan, which was, at the time, a zero-Covid country. The scientist had been vaccinated and was tested only after losing the sense of smell. By then, more than 100 close contacts had been exposed. Human error is a source of exposure even at the highest biosafety levels, and the risks are much greater for scientists working with infectious pathogens at low biosafety.

An early draft of the Defuse proposal stated that the Wuhan lab would do their virus work at BSL-2 to make it “highly cost-effective.” Dr. Baric added a note to the draft highlighting the importance of using BSL-3 to contain SARS-like viruses that could infect human cells, writing that “U.S. researchers will likely freak out.”

Years later, after SARS‑CoV‑2 had killed millions, Dr. Baric wrote to Dr. Daszak: “I have no doubt that they followed state determined rules and did the work under BSL-2. Yes China has the right to set their own policy. You believe this was appropriate containment if you want but don’t expect me to believe it. Moreover, don’t insult my intelligence by trying to feed me this load of BS.”

SARS‑CoV‑2 is a stealthy virus that transmits effectively through the air, causes a range of symptoms similar to those of other common respiratory diseases and can be spread by infected people before symptoms even appear. If the virus had escaped from a BSL-2 laboratory in 2019, the leak most likely would have gone undetected until too late.

One alarming detail — leaked to The Wall Street Journal and confirmed by current and former U.S. government officials — is that scientists on Dr. Shi’s team fell ill with Covid-like symptoms in the fall of 2019. One of the scientists had been named in the Defuse proposal as the person in charge of virus discovery work. The scientists denied having been sick.

The hypothesis that Covid-19 came from an animal at the Huanan Seafood Market in Wuhan is not supported by strong evidence.

In December 2019, Chinese investigators assumed the outbreak had started at a centrally located market frequented by thousands of visitors daily. This bias in their search for early cases meant that cases unlinked to or located far away from the market would very likely have been missed

To make things worse, the Chinese authorities blocked the reporting of early cases not linked to the market and, claiming biosafety precautions, ordered the destruction of patient samples on January 3, 2020, making it nearly impossible to see the complete picture of the earliest Covid-19 cases. Information about dozens of early cases from November and December 2019 remains inaccessible.

A pair of papers published in Science in 2022 made the best case for SARS‑CoV‑2 having emerged naturally from human-animal contact at the Wuhan market by focusing on a map of the early cases and asserting that the virus had jumped from animals into humans twice at the market in 2019

More recently, the two papers have been countered by other virologists and scientists who convincingly demonstrate that the available market evidence does not distinguish between a human superspreader event and a natural spillover at the market.

Furthermore, the existing genetic and early case data show that all known Covid-19 cases probably stem from a single introduction of SARS‑CoV‑2 into people, and the outbreak at the Wuhan market probably happened after the virus had already been circulating in humans.

Not a single infected animal has ever been confirmed at the market or in its supply chain. Without good evidence that the pandemic started at the Huanan Seafood Market, the fact that the virus emerged in Wuhan points squarely at its unique SARS-like virus laboratory.

With today’s technology, scientists can detect how respiratory viruses — including SARS, MERS and the flu — circulate in animals while making repeated attempts to jump across species. Thankfully, these variants usually fail to transmit well after crossing over to a new species and tend to die off after a small number of infections

investigators have not reported finding any animals infected with SARS‑CoV‑2 that had not been infected by humans. Yet, infected animal sources and other connective pieces of evidence were found for the earlier SARS and MERS outbreaks as quickly as within a few days, despite the less advanced viral forensic technologies of two decades ago.

Even though Wuhan is the home base of virus hunters with world-leading expertise in tracking novel SARS-like viruses, investigators have either failed to collect or report key evidence that would be expected if Covid-19 emerged from the wildlife trade. For example, investigators have not determined that the earliest known cases had exposure to intermediate host animals before falling ill.

No antibody evidence shows that animal traders in Wuhan are regularly exposed to SARS-like viruses, as would be expected in such situations.

In previous outbreaks of coronaviruses, scientists were able to demonstrate natural origin by collecting multiple pieces of evidence linking infected humans to infected animals

In contrast, virologists and other scientists agree that SARS‑CoV‑2 required little to no adaptation to spread rapidly in humans and other animals. The virus appears to have succeeded in causing a pandemic upon its only detected jump into humans.

it was a SARS-like coronavirus with a unique furin cleavage site that emerged in Wuhan, less than two years after scientists, sometimes working under inadequate biosafety conditions, proposed collecting and creating viruses of that same design.

a laboratory accident is the most parsimonious explanation of how the pandemic began.

Given what we now know, investigators should follow their strongest leads and subpoena all exchanges between the Wuhan scientists and their international partners, including unpublished research proposals, manuscripts, data and commercial orders. In particular, exchanges from 2018 and 2019 — the critical two years before the emergence of Covid-19 — are very likely to be illuminating (and require no cooperation from the Chinese government to acquire), yet they remain beyond the public’s view more than four years after the pandemic began.

it is undeniable that U.S. federal funding helped to build an unprecedented collection of SARS-like viruses at the Wuhan institute, as well as contributing to research that enhanced them.

Advocates and funders of the institute’s research, including Dr. Fauci, should cooperate with the investigation to help identify and close the loopholes that allowed such dangerous work to occur. The world must not continue to bear the intolerable risks of research with the potential to cause pandemics.

A successful investigation of the pandemic’s root cause would have the power to break a decades-long scientific impasse on pathogen research safety, determining how governments will spend billions of dollars to prevent future pandemics. A credible investigation would also deter future acts of negligence and deceit by demonstrating that it is indeed possible to be held accountable for causing a viral pandemic

Last but not least, people of all nations need to see their leaders — and especially, their scientists — heading the charge to find out what caused this world-shaking event. Restoring public trust in science and government leadership requires it.

In fact, the news from Wall Street lately has mostly been about retreat from climate goals, rather than recommitment. Banks and asset managers are withdrawing from international climate alliances and chafing at their rules. Regional banks are stepping up lending to fossil fuel producers. Sustainable investment funds have sustained crippling outflows, and many have collapsed.

In some cases, it’s a classic prisoner’s dilemma: If firms collectively shift to cleaner energy, a cooler climate benefits everyone more in the future

in the short term, each firm has an individual incentive to cash in on fossil fuels, making the transition much harder to achieve.

when it comes to avoiding climate damage to their own operations, the financial industry is genuinely struggling to comprehend what a warming future will mean.

A global compact of financial institutions made commitments worth $130 trillion to try to bring down emissions, confident that governments would create a regulatory and financial infrastructure to make those investments profitable. And in 2022, the Inflation Reduction Act passed.

What about the risk that climate change poses to the financial industry’s own investments, through more powerful hurricanes, heat waves that knock out power grids, wildfires that wipe out towns?

“If we think about what is going to be the best way to tilt your portfolios in the direction to benefit, it’s really difficult to do,”

“These will probably be great investments over 20 years, but when we’re judged over one to three years, it’s a little more challenging for us.”

Some firms cater to institutional clients, like public employee pension funds, that want combating climate change to be part of their investment strategy and are willing to take a short-term hit. But they aren’t a majority

And over the past couple of years, many banks and asset managers have shrunk from anything with a climate label for fear of losing business from states that frown on such concerns.

On top of that, the war in Ukraine scrambled the financial case for backing a rapid energy transition. Artificial intelligence and the movement toward greater electrification are adding demand for power, and renewables haven’t kept up

All of that is about the relative appeal of investments that would slow climate change

If you bought some of the largest solar-energy exchange-traded funds in early 2023, you would have lost about 20 percent of your money, while the rest of the stock market soared.

There is evidence that banks and investors price in some physical risk, but also that much of it still lurks, unheeded.

“I’m very, very worried about this, because insurance markets are this opaque weak link,” Dr. Sastry said. “There are parallels to some of the complex linkages that happened in 2008, where there is a weak and unregulated market that spills over to the banking system.”

Regulators worry that failing to understand those ripple effects could not just put a single bank in trouble but even become a contagion that would undermine the financial system.

But while the European Central Bank has made climate risk a consideration in its policy and oversight, the Federal Reserve has resisted taking a more active role, despite indications that extreme weather is feeding inflation and that high interest rates are slowing the transition to clean energy.

“The argument has been, ‘Unless we can convincingly show it’s part of our mandate, Congress should deal with it, it’s none of our business,’”

a much nearer-term uncertainty looms: the outcome of the U.S. election, which could determine whether further action is taken to address climate concerns or existing efforts are rolled back. An aggressive climate strategy might not fare as well during a second Trump administration, so it may seem wise to wait and see how it shakes out.

big companies are hesitating on climate-sensitive investments as November approaches, but says that “two things are misguided and quite dangerous about that hypothesis.”

One: States like California are establishing stricter rules for carbon-related financial disclosures and may step it up further if Republicans win

And two: Europe is phasing in a “carbon border adjustment mechanism,” which will punish polluting companies that want to do business there.

at the moment, even European financial institutions feel pressure from the United States, which — while providing some of the most generous subsidies so far for renewable-energy investment — has not imposed a price on carbon.

The global insurance company Allianz has set out a plan to align its investments in a way that would prevent warming above 1.5 degrees Celsius by the end of the century, if everyone else did the same. But it’s difficult to steer a portfolio to climate-friendly assets while other funds take on polluting companies and reap short-term profits for impatient clients.

“This is the main challenge for an asset manager, to really bring the customer along,” said Markus Zimmer, an Allianz economist. Asset managers don’t have sufficient tools on their own to move money out of polluting investments and into clean ones, if they want to stay in business,

“Of course it helps if the financial industry is somehow ambitious, but you cannot really substitute the lack of actions by policymakers,”

According to new research, the benefit is greater when decarbonization occurs faster, because the risks of extreme damage mount as time goes on. But without a uniform set of rules, someone is bound to scoop up the immediate profits, disadvantaging those that don’t — and the longer-term outcome is adverse for all.