Category: Uncategorized

Vietnam Renewables: Investment Priorities 12/6/2023

Vietnam Renewables: Investment Priorities

Centre for Climate Finance & Investment at Imperial College Business School led a team, including the Payne Institute Sustainable Finance Lab Program Manager Brad Handler, to write “Vietnam Renewables: Investment Priorities”, a review of prospects and challenges to deploy more renewable energy in the country. The report offers specific steps for further renewable power deployment in Vietnam in the context of its economic growth and incredible resource potential (solar and wind), through a combination of policy and market mechanisms. December 6, 2023.

Sustainability-Linked Debt Finds New Ground

Sustainability-Linked Debt Finds New Ground

 

Key Points: Sustainability linked debt’s recent “expansion” into the option to include ESG KPIs isn’t in itself a problem, but products must be labeled appropriately to maintain credibility for this quickly-growing category. Meanwhile, the first sovereign issuance earns a 10 basis point “greenium,” pointing to the benefits of clear (and maybe few) targets.

An option to add ESG KPIs later. Oceaneering International entered into a new $215 Million revolving credit facility last month. The company has the option to implement environmental, social and governance (ESG) key performance indicators (KPIs) at a later date. The potential adjustment to the cost of borrowing following implementation of these ESG KPIs, and verification through established measurement and reporting procedures, is modest: one basis point on the commitment fee and five basis points on the borrowing rate. Analysts have taken issue with Oceaneering’s labeling of its facility as a Sustainability-Linked revolver given the uncertainty as to whether the company will make ESG commitments at all, let alone how ambitious the commitments will be.

Chile issues the first sovereign SLB. In March 2022, Chile issued a US$2 Billion (US$ denominated) sustainability-linked bond, the first from a sovereign issuer. Strong demand led to an estimated “greenium” of ten basis points. At least in part, the demand was credited to the fact that the issuance carried a potential penalty of as much as 200 basis points if the targets, which include only two items and relate to the country’s greenhouse gas reductions, are not met. Further, it was thought that this level of potential penalties might set a benchmark, as well as the fact that the KPIs are simple, for other sovereigns considering similar financing. Chile is an experienced issuer of sustainability bonds — news and analysis service provider Environmental Finance cites US$33 Billion in cumulative issuance — which likely helped smooth the sale process.

Sustainability-Linked was fastest growing green lending sector in 2021. As we discussed in more detail in a recent Payne Financial Post, sustainability-linked bonds and loans grew 245% year-over-year in 2021 to $482 Billion, per Bloomberg estimates, (for comparison, green bonds + loans totaled $642 Billion). Sustainability-linked bonds appear to have maintained its 2021 pace in 1Q22, with US$24 Billion of issuance vs. $103 Billion in all of 2021, per Environmental Finance; in contrast, total ESG issuance (i.e. green, social and sustainable) slowed from last year’s pace by as much as 20%, according to some estimates.

5/5/2022

 

 

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Payne Institute Welcomes New Research Associate 1/11/2022

Payne Institute Welcomes New Research Associate

The Payne Institute welcomes our new Research Associate, Baba Freeman. Baba will initially be embedded within the COMET (the Coalition on Materials Emissions Transparency) partnership to help improve the transparency and quality of environmental, social, and governance disclosures along the mineral and metals value chain. Baba comes to the Payne Institute with years of experience in management consulting and finance in the oil and gas and electric power industries, in which he worked on a diverse range of projects and gained expertise in strategic analysis and business performance improvement. His academic background is in petroleum geoscience, mineral and energy economics, and policy.   January 11, 2022.  

Space exploration and development is essential to fighting climate change 8/16/2021

Space exploration and development is essential to fighting climate change

Payne Institute Fellow Alex Gilbert writes about how the recently released Sixth Assessment Report of the Intergovernmental Panel on Climate Change presents a worrying scientific consensus: climate change is happening, humans are causing it, even our best efforts cannot prevent negative effects, and reducing emissions now is essential to preventing catastrophic consequences. The Biden Administration recognizes the urgency of addressing this challenge. This prioritization rightly reflects the growing capabilities of the public and private space sectors to help our society understand, adapt, and mitigate climate change.  Perhaps most importantly, growing space activities can accelerate the clean energy transition to reduce emissions by catalyzing technological development of existing and new energy technologies.  With foresight and targeted intervention, emerging space capabilities and industry can improve our climate outcomes.  August 16, 2021.

Multiple Wildfires in Nuevo León

By Elijah Mt. Castle

Mexico is currently facing one of its worst forest fire seasons in decades. Over 1,000 people have been evacuated in Nuevo León, Mexico alone. Drought conditions and high winds have severely hindered firefighting efforts. The La Niña weather system has caused high winds with gusts up to 90kph. These high winds have grounded helicopter fire fighting units. This year alone, fire has destroyed over 29,000 hectares(~72,000 acre) of forest nationwide, the third largest loss of forest land in a decade. There are currently 75 active wildfires across Mexico. Pictured are the VNF detections in Nuevo León for March 17th -28th 2021. Also pictured is the EOG Nighttime Lights mosaic for March 27th 2021. The more pronounced the color is on the map, the longer fire has been burning there.

What Biden and Kerry could mean for the future of climate change action 12/4/2020

What Biden and Kerry could mean for the future of climate change action

Dolf Gielen and Payne Institute Director Morgan Bazilian write about how John Kerry helped bring the world into the Paris climate agreement and expanded America’s reputation as a climate leader. That reputation is now in tatters, and President-elect Joe Biden is asking Kerry to rebuild it again – this time as climate envoy, a position Biden plans to include in the National Security Council.  December 4, 2020.

Colorado School of Mines ranked among nation’s elite energy universities 9/29/2020

Colorado School of Mines ranked among nation’s elite energy universities

Colorado School of Mines has been named one of the elite energy universities in the nation by the American Energy Society (AES).  The report, Top Energy Universities 2020, recognized Mines for “excellence in all fields, from fossil to sustainable materials and renewable energy” and its “small but mighty programs.”  September 29, 2020.  

Sustained Activiy In Antartica During COVID-19 Pandemic

By Elijah Mt. Castle and Mitch Burcham

Imagery from Earth Observation Group’s VIIRS Nighttime Light provides additional support to a recent claim by The Atlantic that operations within Antarctica have maintained steady during the global COVID-19 outbreak. This image depicts Antarctic research bases that have maintained operation even as U.S and Australian funding as decreased due to pandemic induced budget cuts. According to Leah Fieger and Mara Wilson of The Atlantic the sustained activity, seen on the map as red dots, is the result of Russian and Chinese efforts to effectively imperialize the region. While all research in Antarctica is a collaborative effort, the decrease in U.S involvement in the area has given the green light for China and Russia to stake claim in land and potential resource treasure troves. The actual outcome of this is unclear as diplomatic discussions about the region happen regularly, however those discussions cannot begin again until social distancing practices are more relaxed. Until those discussions can begin, Antarctic operations could prove to be a topic of interest in the coming months.

 

Wildfires Here in Colorado

By William Helms

On the morning of May 20, 2020, lightning struck in Las Animas County. This sparked a wildfire that would eventually spread to more than 11,000 acres of land in Southeastern Colorado over the following week. As seen in the above image, the wildfire stretched northward from its initial location. The rapid spread was made possible with the help of “unseasonably warm weather and strong winds” according to Sam Tabachnik of The Denver Post. While firefighters would not be able to contain the fire until May 27 with the aid of cooler weather and precipitation according to Elise Schmelzer, also of The Denver Post, VIIRS Nightfire shows a significant drop off in heat activity in the area after May 23.

The above image was created from Google Earth using VIIRS Nightfire (VNF) data collected from May 20 to May 23 to show the temperatures and areas affected by the blaze. By additionally using an overlay of the Nighttime Lights data collected on May 23 (represented by the lighter gray and white in the image) we can see how both sets of data can be used to corroborate one another.

References:
Sam Tabachnik, “Firefighters Battle 10,000-Acre Fire in Las Animas County.” The Denver Post. May 23, 2020.
Elise Schmelzer, “Firefighting Activity Winds down as Wildfire in Las Animas County Comes under Control.” The Denver Post. May 27, 2020.

Wildfires in Cave Creek, Arizona

Arizona Fire

By Mitch Burcham and Elijah Mt. Castle

The team at Payne Institute’s Earth Observation Group has been able to render this image using VIIRS NightFire technology to give an exclusive look at the recent wildfire that has spread through the East Desert of Arizona. Visible on the map, in and around the black outline of Cave Creek Recreational Area, is the region where the human caused wildfire forced more than 130 homes to be evacuated. The dots represent the collective heat signature of the fire as it rapidly spread and increased in temperature, propelled by high winds in the area. Firefighters are working fast, however. Just 4 days after the outbreak the wildfire, officials have announced that close to 80% of the flames have been controlled and the evaluation order has been lifted. With increased use of aerial firefighting techniques Arizona and the rest of Southwest America has been able to avoid the devastation wildfires have brought to places like Poland and Australia this year.

Via: https://www.azfamily.com/news/arizona_wildfires/east-desert-fire-sparks-evacuations-burns-1-500-acres-near-cave-creek/article_e87ed3fc-9893-11ea-aacb-335a668fc4d9.html