The majority of CNBC's coverage in the first half of 2013 cast doubt on whether manmade climate change exists. However, denial is not prudent for the business professionals viewing CNBC, who can reduce risk and increase profits by analyzing how climate change is impacting their industries.
Half Of CNBC's Coverage Cast Doubt On Climate Change
More Than Half Of CNBC's Climate Change Coverage Was Misleading. Twenty-four out of the 47 substantial mentions or segments on climate change on CNBC, or just over 51 percent of coverage, cast doubt on whether manmade climate change existed.
This count does not include segments that did not deny the existence of manmade climate change, but suggested that we should not make changes in order to address it. For instance, former Hewlett-Packer CEO and Republican advisor Carly Fiorina lamented that President Barack Obama mentioned climate change in his State of the Union address, saying “what [Obama] didn't say was what scientists also agree on ... that no nation acting alone can make any measurable improvement in climate change, in fact it will require a global response, sustained over many decades, and costing trillions upon trillions of dollars.” [CNBC, State of the Union coverage, 2/12/13]
CNBC's Only Full Segment On Climate Was “In Defense Of Carbon Dioxide.”
- The only scientist that CNBC hosted on climate change in the first half of 2013 was William Happer, a physicist who has not published any peer-reviewed climate research, and who is the chairman of the fossil fuel industry-funded George C. Marshall Institute. Happer starred in the only full segment that CNBC dedicated to climate change in the first half of 2013. That segment, on Squawk Box, was based on a widely denounced Wall Street Journal op-ed that Happer co-wrote titled “In Defense of Carbon Dioxide.” [Media Matters, 5/9/13] [CNBC, Squawk Box, 5/17/13] [Media Matters, 5/12/13]
- Several CNBC figures, including host Larry Kudlow, co-anchor Joe Kernen, and contributor Rick Santelli deny manmade climate change. However, CNBC guests who spoke about climate change in the first half of 2013 were primarily business experts and mostly accepted the science demonstrating manmade climate change. For instance, Byron Wien, Vice Chairman of Blackstone Advisory Partners, told CNBC that climate change was hurting crop yields, thereby raising the cost of food. CNBC later hosted contributor Dennis Gartman to dispute Wien, saying “I don't think man has much to do with” the changing climate. [Blackstone, 1/2/13] [CNBC, Fast Money, 1/9/13]
- The only other CNBC guest that cast doubt on climate science was Reynolds Wolf, a Weather Channel meteorologist who denied manmade climate change three times on air.
Read More About The CNBC Figures Dismissing Climate Science Here
Strategic Businesses Acknowledge And Evaluate Climate Change Impacts
Top Companies Consider The Impact Of Climate Change On Their Businesses.
- Deloitte: “Climate Risk Should Be Included In All Organisations' Risk Management Strategies.” [Deloitte, accessed 6/10/13]
- Unilever: Climate Change “Has A Significant Impact On Our Business.” [Unilever, accessed 6/11/13]
- Kinross Gold Corporation: “Severe Weather Conditions, Including Those Resulting From Global Climate Change, May Adversely Impact Kinross' Operations.” [Kinross, 2010, via Ceres]
- Coors: “The Effects Of Climate Change Could Have A Long-Term, Material Adverse Impact On Our Business.” [Coors, 2/22/13]
- Nike: “Climate Change May Impact Nike's Global Supply Chain And Our Ability To Deliver The Right Product To The Right Place At The Right Time.” [Nike, 2011, via Ceres]
- Johnson & Johnson: “Changes To Global Climate ... Could Affect Demand ... [And] Cause Disruptions.” [Johnson & Johnson, 2/20/13]
- Delta Airlines: Increases In Severe Weather Events “Including From Changes In The Global Climate” Could “Increase The Potential For Greater Loss.” [Delta Airlines, 2/12/13]
- Swiss Re: Climate Change Is “An Important Component Of The Company's Long-Term Risk Management Strategy.” [Swiss Re, accessed 6/12/13]
- AIG: Climate Change Poses “Risks To The Global Economy ... Including Risks To Adequate Water Supply For Human Consumption And Agricultural Use.” [AIG, issued May 2006, revised March 2009]
- Starbucks: Climate Change Poses “A Potentially Significant Risk To Our Supply Chain, Which Is The Arabica Coffee Bean.” [The Guardian, 10/13/11]
- Lloyd's: “As Climate Change Takes Hold, Few Businesses Will Be Able To Escape The Impact Of Greater Competition For Resources.” [Lloyd's, 2009]
SEC Requires That Companies Consider Climate Change Risks. Bloomberg News reported that the U.S. Securities and Exchange Commission requires companies to consider not just how climate change regulations could affect them but also how the effects of climate change itself could impact their businesses:
Companies must consider the effects of global warming and efforts to curb climate change when disclosing business risks to investors, the U.S. Securities and Exchange Commission said.
In the 3-to-2 vote, the commission said companies in the U.S. should also consider international accords, indirect effects such as lower demand for goods that produce greenhouse gases, and physical impacts such as the potential for increased insurance claims in coastal regions as a result of rising sea levels.
“Everybody knows litigation and regulatory risk,” said Julie Gorte, a senior vice president for sustainable investing at mutual fund company Pax World Management LLC in Portsmouth, New Hampshire, which has about $2.5 billion under management. “The fact that they went to physical risk is a really important step.” [Bloomberg, 1/27/10]
PricewaterhouseCoopers: “Climate Change Is A Risk 'Multiplier.'” PricewaterhouseCoopers states that climate change is a “risk multiplier,” as the increasing frequency and intensity of certain extreme weather events can, for instance, disrupt the global supply of commodities. This graphic created by PwC shows that the supply of rice will be particularly disrupted by climate change:
In 2010, Russia suffered a severe heat wave. The resulting economic losses were estimated to be US$15bn as drought and wildfires destroyed crops, particularly wheat. The knock-on effect was export restrictions on wheat in Russia, which contributed to global price increases.
Often overlooked, climate change adds to complexity. It amplifies or alters existing risks, for example raw material availability (e.g. water, energy) or transport disruption due to extreme weather events. The resulting shocks on the global supply chain can be severe and persistent.
So climate change is a 'risk multiplier'. [PricewaterhouseCoopers, accessed 6/10/13]
Top Consulting Groups: The Winners In Insurance Industry Will Consider Climate Impacts. In 2008, Ernst & Young named climate change the top risk to insurance companies. PricewaterhouseCoopers states that the “winners in [the insurance] sector will be those companies that understand the [climate] risks and opportunities facing their businesses” :
The insurance sector is going to be one of the hardest hit by climate change, from rising claims to losses on investments. The winners in this sector will be those companies that understand the risks and opportunities facing their businesses, and embed it into their strategies and operations. [PricewaterhouseCoopers, accessed 6/12/13] [Ernst & Young Press Release, 3/24/08]
Munich Re: We Must “Find Improved Solutions For Adaptation, But Also Mitigation” Of Climate Change. In October 2012, a report from Munich Re, an internationally distinguished reinsurer, looked at extreme weather events in North America and reported that storms accounted for about $805 billion in losses from 1980-2011. The study found that while increasing losses were previously “primarily driven by socio-economic factors, such as population growth, urban sprawl and increasing wealth,” the report provided “new evidence for the emerging impact of climate change.” From Munich Re's press release on the report:
The Head of Munich Re's Geo Risks Research unit, Prof. Peter Höppe, commented: “In all likelihood, we have to regard this finding as an initial climate-change footprint in our US loss data from the last four decades. Previously, there had not been such a strong chain of evidence. If the first effects of climate change are already perceptible, all alerts and measures against it have become even more pressing.” Höppe continued that even without changing hazard conditions, increases in population, built-up areas and increasing values, particularly in hazard-prone regions, need to be on Munich Re's risk radar. All stakeholders should collaborate and close ranks to support improved adaptation. In addition, climate change mitigation measures should be supported to limit global warming in the long term to a still manageable level. “As North America is particularly exposed to all kinds of weather risks, it especially would benefit from this” , added Höppe.
Peter Röder, Board member with responsibility for the US market, said: “Climate change-related increases in hazards - unlike increases in exposure - are not automatically reflected in the premiums. In order to realize a sustainable model of insurance, it is crucially important for us as risk managers to learn about this risk of change and find improved solutions for adaptation, but also mitigation. We should prepare for the weather risk changes that lie ahead, and nowhere more so than in North America.” [Munich Re, 10/17/12]
Extreme Weather Can Restrict Work Days, Damage Infrastructure, And Increase Insurance Costs. A report by consulting firm ICF International for The Center for Climate and Energy Solutions (C2ES) titled “Adapting to Climate Change: A Business Approach” detailed the ways that climate change could impact selected sectors. From their list of the potential impacts of climate change on the construction industry:
Extreme weather events may disrupt transport for site deliveries and affect site work (e.g., muddy site conditions), restricting work-days
Infrastructure (e.g., drainage) affected by extreme weather events
Excessive heat in summer will affect some construction processes and onsite workforce
Design standards may need to be clarified or upgraded in response to changing climate
Insurance may be more expensive or difficult to obtain for existing buildings, new buildings, and during the construction process [C2ES, April 2008]
Study: Climate Change Will Hurt Skiing Industry. The New York Times reported in 2012 that a not-yet released University of Waterloo study found that "[u]nder certain warming forecasts, more than half of the 103 ski resorts in the Northeast will not be able to maintain a 100-day season by 2039":
Whether this winter turns out to be warm or cold, scientists say that climate change means the long-term outlook for skiers everywhere is bleak. The threat of global warming hangs over almost every resort, from Sugarloaf in Maine to Squaw Valley in California. As temperatures rise, analysts predict that scores of the nation's ski centers, especially those at lower elevations and latitudes, will eventually vanish.
Under certain warming forecasts, more than half of the 103 ski resorts in the Northeast will not be able to maintain a 100-day season by 2039, according to a study to be published next year by Daniel Scott, director of the Interdisciplinary Center on Climate Change at the University of Waterloo in Ontario.
The warming trend “spells economic devastation for a winter sports industry deeply dependent upon predictable, heavy snowfall,” said another report, released last week by the Natural Resources Defense Council and Protect Our Winters, an organization founded to spur action against climate change.
Between 2000 and 2010, the report said, the $10.7 billion ski and snowboarding industry, with centers in 38 states and employing 187,000 people directly or indirectly, lost $1.07 billion in revenue when comparing each state's best snowfall years with its worst snowfall years. [The New York Times, 12/12/12]
Economist: Risk Of Carbon Assets That “Is Not Openly Recognized” May Be Creating A Carbon Bubble. As Bloomberg News reported in a 2013 article titled “Carbon-Intensive Investors Risk $6 Trillion 'Bubble,' Study Says,” former World Bank Chief Economist Nicholas Stern warned that there may be a “carbon bubble” similar to the housing bubble that contributed to financial crisis:
The top 200 oil, gas and mining companies spent $674 billion last year finding and developing fossil fuel resources, according to research by the Carbon Tracker Initiative and a climate-change research unit at the London School of Economics. If this rate continues for the next decade some $6 trillion risks being wasted on “unburnable” or stranded assets, according to the report, released today.
The analysis shows that 60 to 80 percent of coal, oil and gas reserves of the 200 public companies studied could be unburnable if the world is to curb emissions to limit global warming to 2 degrees Celsius, a United Nations target.
Even without UN targets, the focus on air quality in nations including China and the U.S., and the falling costs of wind and solar technologies should drive investors to seek low- carbon opportunities, [Carbon Tracker's James] Leaton said.
The report calls on finance ministers to incorporate climate change into assessment of risk in the capital markets and urges financial regulators to require companies to report CO2 emissions embedded in their fossil fuel reserves. Ratings agencies should address climate change as part of efforts to tackle risk, it said.
“I hope this report will mean that regulators also take note, because much of the embedded risk from these potentially toxic carbon assets is not openly recognized through current reporting requirements,” Nicholas Stern, who chairs the LSE's Grantham Research Institute on Climate Change and the Environment, said in the statement accompanying the report. [Bloomberg, 4/18/13]
Seventy Percent Of Companies Believe Climate Change Can Significantly Affect Their Revenues. The Carbon Disclosure Project (CDP) noted that “three quarters (73%) [of the companies surveyed] say they feel that climate change presents a physical risk to their operations; just 13% identify regulation as a sole driver” :
Seventy percent of companies believe that climate change has the potential to affect their revenue significantly, a risk which is intensified by a chasm between the sustainable business practices of multinational corporations and their suppliers, according to research published today by the Carbon Disclosure Project (CDP) and Accenture(NYSE:ACN).
"Reducing risk and driving business value" is based on information from 2,415 companies, including 2,363 suppliers and 52 major purchasing organizations who are CDP Supply Chain program members. These members include Dell, L'Oreal and Walmart and represent a combined spending power of c. US$1 trillion. The research marks CDP's most comprehensive annual update on the impact of climate change on corporate supply chains.
Climate change presents near-term risks to businesses, according to the report. Fifty-one percent of the risks that disclosing companies associate with drought or extreme rain are already having an adverse effect on company operations, or are expected to within five years, say those businesses. Additionally, the destructive nature of extreme weather is likely a catalyst for company action on climate change, with physical climate risk identified in the report as a greater driver of investment than climate policy. Of the 678 companies investing in emissions reduction initiatives, three quarters (73%) say they feel that climate change presents a physical risk to their operations; just 13% identify regulation as a sole driver. [CDP, 1/22/13]
Ceres Report: Most Investors And Asset Managers Consider Climate Change. Ceres' first survey of investment practices coordinated by investor networks in North America, Europe and Australia/New Zealand found that most investors surveyed (43 of 44 asset owners and 40 of 46 asset managers) now consider climate change consequences across their organization's entire investment portfolio:
Most participating investors view climate change issues as a material investment risk/opportunity across their organisation's entire investment portfolio (87% of asset managers and 98% of asset owners). It is also becoming a more strategic issue, supported by the finding that responsibility for climate change now resides at the board level for the majority of investors (rather than with the SRI [sustainable and responsible investment] team). This is also evident from the inclusion of a reference to climate change in investment policies. More than 80% of asset managers and 57% of asset owners make specific reference to climate change risk in their investment policy. Respondents to this survey are predominantly members of the investor networks on climate change and as such are likely to have higher levels of commitment than other investors. [Ceres, 6/13/11]
METHODOLOGY: We searched TV News Search and Borrow and an internal video archive for “climate change OR global warming” from January 1, 2013 to June 14, 2013. Our analysis includes any segment devoted to climate change, as well as any substantial mention (any mention more significant than listing climate change as one of many topics). We excluded 60 Minutes specials that were aired on 60 Minutes on CNBC in 2013, including a 2009 special on coal and a 2012 special on truffles. [CBS, 60 Minutes, 4/26/09] [CBS, 60 Minutes, 1/8/12]
Max Greenberg contributed to this report.