Net Zero

➚ BUY: Ozone. The atmospheric layer that protects people from the sun’s harmful rays is on the mend, with chemicals that hurt the ozone declining for the first time, according to a new United Nations report released today. The organization credited the global Montreal Protocol that went into effect in 1989 to phase out chemicals that deplete the ozone, which is now on track to recover within four decades.

➘ SELL: Glaciers. About half of the planet’s massive bodies of ice will be gone by the end of this century, even if countries meet the goals set in the Paris climate agreement to limit global warming to 1.5 degrees Celsius, according to a new study published in Science. At least half of the loss will happen over the next three decades, contributing to rising sea levels.

The cost of reconstructing homes, roads, and other infrastructure damaged in Pakistan by last year’s flooding from record rain. Islamabad and the United Nations are hosting a conference today to rally financial support for the rebuilding effort. Reuters notes it will be a major test case for the debate over who pays for losses due to climate change, with the developing world arguing that developed nations should bear the brunt of such costs.

How to prevent climate gentrification

Parag Khanna is founder and CEO of Climate Alpha, which uses artificial intelligence to provide risk-adjusted property valuations — and anticipates that the next real estate boom will come from climate-resilient regions.

Khanna argues that the singular focus on reducing emissions is misguided, and that places better defended against climate change can be enjoyed by people outside the 1%. He also flags the climate solution no one wants to discuss.

Q: What’s wrong with how we use climate data?

A: Climate risk analytics are downside risk quantification tools. Their job is to tell you that you are in Miami, and Miami is going to sink by 2050, and therefore, you should sell Miami today. That’s not only likely wrong, it’s also just not useful on Monday morning for any investor or asset manager. These tools are really about mitigation. And mitigation is all about reducing emissions and if we don’t use our appliances after 10 pm, then climate is going to sort of solve itself.

And obviously, it’s not, whereas adaptation is the neglected stepchild. Adaptation is about either hardening assets or relocating right now. But it’s all about meeting the Paris agreement targets and not about saving people now by helping them move to places where they can survive.

Q: So what are the most surprising data points you’ve discovered?

A: The future is a moving target. I thought that there was going to be a set of specific places and I would put my finger on the map and say, people will move from x to y. But we’re going to become more nomadic and we’ll always be moving for multiple reasons, and climate has been pretty much the last reason why people move. You move for economic well being. Of course you move to Florida because it’s sunny and lovely. But that coexists with the fact that they have no state income tax.

And they all coexist with each other in very complex ways and there are so many things in play. We have a customer who was rejected from getting a permit to build a development in southern California because they could not demonstrate that they were going to be able to supply water over a meaningful time frame to all the residents of that development.

Q: How do people outside the 1% afford to live in nice places that won’t be destroyed by hurricanes?

A: Vermont is regularly ranked as the most resilient state given weather models, but it also has some of the most entrenched opposition to new housing. And Americans are still moving in the wrong direction. People are still moving into fire hazard areas, as well as the coastal areas.

But America is a very big country. It’s always about Miami, but there are 40,000 zip codes in America. Our purpose is not to enable climate gentrification by having rich people buy up these assets. There are a lot of places where people can go if the right policies are in place.

Ten years out, there’s going to be about 100 million people in America of retirement age. How many of them [will] live in a place that is climate resilient and offer an active lifestyle for the elderly? Maybe 1 million.

So this is a gigantic opportunity to do something good for the people, which is to plan ahead, think about resilient geographies, and build affordable, resilient housing. You can start advocating for permit issuance, combating nimbyism, and all the things that are going to be necessary so people don’t have to live in the middle of a hurricane zone.

Q: What about outside the United States?

A: The climate part is the easiest, we have climate models for the whole world. But we don’t have good, transparent economic data about the whole world. Look at China. There’s a lot we don’t know. I’m based in Singapore and we’ve gotten queries from Thailand, from all over this region. And there are a couple of caveats around the utility of risk-adjusted valuation forecasting for land and property. One is that there are places where politics trumps everything.

The second is the availability of every other data point, except for climate data. We got a call from a town in Thailand. And this guy was giddily telling me that they’re 100 miles northeast of Bangkok. And Bangkok is totally sunk. And he has 100 hectares so are they the next Bangkok? We asked our standard repertoire of questions. What data do you have on the history of property transactions? And he had nothing.

Q: What is being missed?

A: The one thing that we could do most immediately to save and help the largest number of people is the one thing that will never ever come up at the United Nations COP summit, which is planning on migration. No country will ever allow another country to dictate who gets to cross its borders.

Semafor’s Liz Hoffman, Steve Clemons and Ben Smith will be in Davos later this month for the World Economic Forum, where many of the most powerful people in the world come to do deals, show off their good deeds, and get trapped in the snow and forced to talk to us.

They’ll be delivering our frank and transparent reporting on global power in all its deal-making, gossipy, productive, and pretentious grandeur from one of its true centers in a pop-up newsletter, Semafor Davos Daily. Sign up here.

One Good Text with... Trevor Higgins

If countries make progress on their climate ambitions, some of them will also be confronted with the policy challenge of workers in the fossil fuel industry losing their jobs. In the U.S., they account for about 1% of the workforce, and are concentrated in certain regions like Texas and Appalachia. Resources for the Future also found there’s a substantial gap between skills needed for fossil fuel jobs and what’s needed for similarly paying positions outside that industry.

The world’s first vaccine for honey bees marks an important advancement as people increasingly grapple with how food supplies are being hurt by climate change. Vaccine developer Dalan Animal Health said last week that the protection against American foulbrood disease is a breakthrough that will support pollination to secure food supplies.

I’ve been fascinated by the role bees play in our ecosystem since I read about them disappearing years ago. American foulbrood disease, for which a vaccine was approved by the U.S. Department of Agriculture, is one of the causes of their declining population, in addition to bees losing their habitat and climate change.

About one-third of the food eaten by Americans comes from crops pollinated by honey bees, including apples, melons, and broccoli, according to the Food and Drug Administration.

Bees aren’t about to be injected. The vaccine will instead be fed to them, incorporated into a nutritious substance given to queen bees, whose larvae will then develop immunity.

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