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John Kostyack
@kostyack.bsky.social
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BP says that under our currently trajectory, oil hits peak demand next year, but gas keeps expanding (by another 20%) through 2050.
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John Kostyack@kostyack.bsky.social |
296 followers 348 following 692 posts
Consulting on climate change and the energy transition for NGOs, foundations and other mission-focused organizations at Kostyack Strategies
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John Kostyack
@kostyack.bsky.social
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BP says that under our currently trajectory, oil hits peak demand next year, but gas keeps expanding (by another 20%) through 2050.
0 replies 0 reposts 0 likes
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John Kostyack
@kostyack.bsky.social
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Mombak's website says that its native trees are more durable than the exotics used in plantations. Sure, but shouldn't the comparison be with the length of time GHGs stay in the atmosphere?
0 replies 0 reposts 3 likes
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John Kostyack
@kostyack.bsky.social
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What counts as "durable" in the voluntary carbon markets? Microsoft, the world's largest offsets buyer, says it is "creating a market for high-quality high-integrity durable carbon-removal assets" & then cites the Mombak forestry project in Brazil as an example. www.wsj.com/articles/mic...
1 replies 0 reposts 2 likes
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Justin Gerdes
@justingerdes.bsky.social
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"The data is clear – clean energy is not causing electric bills to rise," finds a new @energyinnovation.bsky.social report: energyinnovation.org/publication/...
0 replies 5 reposts 12 likes
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Patrick Reinsborough
@giantwhispers.bsky.social
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If you live in N. America, food you eat is probably grown in the orange “major heat risk” strip in California's Central Valley. The heat threatens crops, farmworkers & our entire food system. This is our planet at 1.2 degrees of warming yet California is STILL approving new oil wells. #ClimateSky 🔌💡
1 replies 77 reposts 165 likes
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John Kostyack
@kostyack.bsky.social
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Grateful to Professor Honigsberg for highlighting the work needed to address the current confusion arising from non-GAAP reporting. Time for investors to step up their FASB engagement.
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John Kostyack
@kostyack.bsky.social
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The likely objection to this move- the transition's direction is too uncertain! - has a simple response: use notes to the financials to explain the scenarios you considered and the sensitivity of your numbers to those scenarios.
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John Kostyack
@kostyack.bsky.social
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In my recent article on the carbon bubble, I recommend that FASB update its standards to require accounting for impacts of the transition- starting with liabilities for cleanup of toxic messes from oil wells. www.forbes.com/sites/johnko...
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John Kostyack
@kostyack.bsky.social
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Standardized templates would be an improvement but in the world of climate change, what matters most is the quality of disclosures on how companies are handling their transition to a decarbonized economy. Template narrative disclosures are unlikely to be effective in countering rampant greenwashing.
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John Kostyack
@kostyack.bsky.social
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The recommended solution is requiring companies to disclose what they believe drives the difference between market value and book value & to report information on the key intangible assets driving that differential using standardized templates.
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John Kostyack
@kostyack.bsky.social
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FASB is the quasi-public entity that sets US accounting rules, with SEC providing oversight and enforcement. As the article notes, it has long been captured by reporting companies & their auditors and neglected by investors. It also has been incredibly slow moving.
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John Kostyack
@kostyack.bsky.social
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The article focuses on poor disclosures about intangibles - traditional internally-developed intangible assets (e.g., patents) and ESG-related intangibles (e.g., human capital) - but the problem applies to hidden #climaterisk as well.
1 replies 0 reposts 0 likes
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John Kostyack
@kostyack.bsky.social
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Stanford Law professor Colleen Honigsberg gives much-needed attention to a big problem with today's capital markets: the disconnect between US GAAP book value and share prices. Book value now accounts for <20% of market value of S&P 500 companies. corpgov.law.harvard.edu/2024/07/09/d...
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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Saudi Aramco spokesperson says he thinks "ICEs will see 'significant improvements' over the coming years that will make them more sustainable, but didn’t specify what those improvements might be." Sounds like the drug dealer is getting high on his own supply.
1 replies 2 reposts 5 likes
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John Kostyack
@kostyack.bsky.social
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This report's definition of "green economy" is arguable, but focus instead on the key takeaway: energy efficiency & mgmt are hugely profitable. This is great news for the climate: along w renewables, this tech is the big driver of fossil fuel demand reduction. www.bloomberg.com/news/article...
0 replies 1 reposts 5 likes
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John Kostyack
@kostyack.bsky.social
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This advance commitment by Google and other tech companies to buy nature-based credits (made just three months ago) presumably sends a signal to at least some of the forest offset projects that demand remains strong? www.datacenterdynamics.com/en/news/goog...
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John Kostyack
@kostyack.bsky.social
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Agree that a shift away from emissions avoidance credits from this leading player is big news. And as you note, Google's participation in Frontier shows its growing interest in permanent removals. Still unclear: will it buy offsets for temporary removals?
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John Kostyack
@kostyack.bsky.social
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Investors are angry about companies' funding of lobbyists to advance agendas at odds with their public pronouncements. 1/5 of Business Roundtable's members express support for SEC's climate risk disclosure rule while funding BRT's efforts to overturn it. subscriber.politicopro.com/article/eene...
1 replies 2 reposts 2 likes
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John Kostyack
@kostyack.bsky.social
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How state and local governments can combat misinformation pushed by ill-informed constituents or covert fossil fuel interests and get renewables projects built. "We should never accept being made poorer and sicker because of misinformation-filled Facebook memes—there’s too much at stake."
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John Kostyack
@kostyack.bsky.social
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It looks like the Technical Council's letter is not yet available for public scrutiny (no link). Also, the link to the council is broken, providing it here: sciencebasedtargets.org/about-us/tec...
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John Kostyack
@kostyack.bsky.social
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Few private standard-setters are more important to climate progress than SBTI so it is really gratifying to see this work by the Technical Council to protect its scientific credibility. www.bloomberg.com/news/article...
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Kelly Hereid
@kellyhereid.bsky.social
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2023 Canadian wildfires produced CO2 emissions that were *quadruple* the global aviation sector.
But because it's a physical hazard they don't "count"
Physical risk 🤝 Transition risk
HT @hausfath.bsky.social
2 replies 20 reposts 35 likes
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John Kostyack
@kostyack.bsky.social
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Thank you. Yes, I read the article. It doesn't dig into sub-categories. I'll check out the authors' sources.
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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This anonymous source from the project developer nicely captures the core problem with VMC reform efforts: “They have to show that the project can also yield revenue. The negative impact on the project’s integrity is not important. It’s all about upscaling, upscaling, upscaling.”
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John Kostyack
@kostyack.bsky.social
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2 big problems: an independent consultant told Rabobank that carbon benefits were vastly overstated; its recommendations were ignored. Also, the Ivory Coast says these are its credits, not available for Rabobank to sell. Yet Rabobank went forward, and Microsoft claims these credits to this day.
2 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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Yet another scandal in the carbon markets, this one brought to our attention by @followthemoney.bsky.social. The focus is on an Ivory Coast reforestation project that Rabobank used for selling credits to Microsoft, "one of the largest transactions of its kind." www.ftm.eu/articles/rab...
2 replies 3 reposts 7 likes
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John Kostyack
@kostyack.bsky.social
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Really important work. Would love to see more granular % shares of the competitors to feeding people (feeding animals, biofuels for cars, SAFs for aviation, biomass for electricity, etc.). Also, is anyone modeling the potential new threats, e.g., biomass for carbon dioxide removal?
1 replies 0 reposts 3 likes
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John Kostyack
@kostyack.bsky.social
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The Biden Administration just approved its 9th Atlantic offshore wind project, with 195 turbines to be sited off the NJ coast. Approved offshore capacity is now at 13 GW. A critical piece of the decarbonization puzzle is finally falling into place. subscriber.politicopro.com/article/2024...
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John Kostyack
@kostyack.bsky.social
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All of the assets managers in this study are GFANZ members and argue that investing in coal expansion is Paris-compatible. Someone pls ask GFANZ to clarify its position on this.
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Nick Cunningham
@nickcunningham.bsky.social
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German industry turns to solar in race to cut energy costs
"Newly installed photovoltaic capacity on business rooftops rose by 81% year-on-year in the first four months of the year"
www.reuters.com/business/ene...
0 replies 10 reposts 19 likes
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LPE Blog
@lpeblog.bsky.social
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Today, Moira Birss continues our series on the LPE of Insurance, arguing that policy responses to the current home insurance crisis should focus on protecting households, not insurance companies.
lpeproject.org/blog/the-ins...
1 replies 3 reposts 13 likes
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John Kostyack
@kostyack.bsky.social
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What happens in FL does NOT stay in FL. "All this [flood] risk will likely end up ...on the books of the GSEs if people walk away from their mortgage obligations, or more generally on taxpayers if these pockets of risk affect other financial engines." susanpcrawford.substack.com/p/its-called...
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John Kostyack
@kostyack.bsky.social
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In addition to having a carbon bubble linked to denialism about the energy transition, we have a bubble of asset valuations flowing from denial of climate impacts. The Fed and other regulators with responsibilities to protect financial stability are moving far too slowly on this market failure.
2 replies 2 reposts 2 likes
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John Kostyack
@kostyack.bsky.social
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Estimating insurance costs is challenging to say the least as intensifying weather destabilizes markets. But considering we're dealing with an essential piece of the "largest capital expenditure of all time," it's good to get this conversation started.
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John Kostyack
@kostyack.bsky.social
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$19T has been committed so far to financing the climate transition thru 2030. But developing, building & operating climate-related infrastructure & tech requires insurance coverage. BCG and Howden find that ~$10T of coverage will be needed for the $19T investment. www.howdengroup.com/sites/g/file...
1 replies 0 reposts 2 likes
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John Kostyack
@kostyack.bsky.social
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This sums up nicely the hurdles the Court put up today for federal agencies working to protect our health, safety, environment & financial markets.
0 replies 0 reposts 4 likes
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John Kostyack
@kostyack.bsky.social
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This article suggests that some climate-savvy investors are all-in on carbon-intensive sectors. My sense is that investors in the transition finance space are interested in firms with a reasonable prospect of transitioning, not oil & gas majors that are firmly opposed.
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John Kostyack
@kostyack.bsky.social
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Large European investors are ditching oil & gas, not (just) because it's burning down the planet, but because of impacts of the sector's transition risks to their portfolios. www.bloomberg.com/news/article...
1 replies 5 reposts 5 likes
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John Kostyack
@kostyack.bsky.social
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Another great @emilypont.bsky.social piece. With carbon removal gaining traction in climate policy & voluntary carbon markets, there's no agreement on what that term means. Life-cycle assessments kinda make sense -would eliminate CCS for corn ethanol - but what about enhanced rock weathering?
1 replies 3 reposts 9 likes
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John Kostyack
@kostyack.bsky.social
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Former Treasury official @grahamsteele.bsky.social: The US has forfeited its leadership role on financial regulation, is now a laggard in addressing climate-related financial risk. "As US banking agencies fiddle, the planet continues to burn." greencentralbanking.com/2024/06/27/u...
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Justin Mikulka
@justinmikulka.bsky.social
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As we watch insurance companies bail on more areas, it seems like a good time to start thinking about climate risk disclosures. John notes how "This cost-of-capital calculus creates a powerful incentive for carbon-intensive companies to conceal their transition risks. " And they do just that.
0 replies 6 reposts 8 likes
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John Kostyack
@kostyack.bsky.social
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@justinmikulka.bsky.social your excellent work is flagged in my op-ed. Love your research showing how oil and gas cos have successfully worked the financial press to tell a story of continued profitability - a story not backed up any analysis of transition risks in the audited financials.
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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It's all about those "S" curves - costs decreasing exponentially as the industry scales. rmi.org/insight/the-...
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John Kostyack
@kostyack.bsky.social
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Excited about this initiative to grow the field of transition finance. Expecting continued growth in the number of investors seeing climate-related financial opportunities and interested in strong disclosure policy as a way to identify the best-positioned firms. www.bloomberg.com/news/article...
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John Kostyack
@kostyack.bsky.social
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The good news is that growing numbers of investors are interested in helping accelerate the transition, including helping carbon-intensive firms capitalize on the enormous economic opportunities around the transition. To succeed, these investors need better disclosures, especially in the financials
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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Carbon-intensive firms have financial incentives to hide lack of preparedness for the economy's transition. Self-serving “not material” determinations can no longer serve as the thresholds for disclosure of these transition risks; we need prescriptive rules, backed by enforcement.
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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Let’s not wait for another financial crash to get this disclosure agenda enacted.
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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Disclosure rules don’t just benefit investors & other market participants, they also help address the lingering carbon bubble threatening our economy. As the transition accelerates, evidence is mounting that carbon-intensive assets are dangerously inflated.
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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My article proposes ways that four agencies, including the SEC, can address hidden transition risks in financial statements now, using existing authorities. Feedback welcome.
1 replies 0 reposts 1 likes
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John Kostyack
@kostyack.bsky.social
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Important progress has been made on climate risk disclosures in recent years but, as I explain my latest Forbes op-ed, the work is far from complete. Fortunately, progress in the US need not await resolution of litigation over the SEC’s climate rule. www.forbes.com/sites/johnko...
1 replies 0 reposts 3 likes