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Coronavirus relief funds could easily pay to stop the worst of climate change while rebooting economies

Coronavirus relief funds could easily pay to stop the worst of climate change while rebooting economies

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3 years ago

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Global economic support for COVID-19 relief is providing an opportunity to kick-start a shift toward a green future. Maksim Chernyshev/EyeEm via Getty Images
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As of late summer, governments around the world had pledged US$12.2 trillion of relief in response to the coronavirus pandemic. That’s around 15% of global GDP, three times larger than government spending put forward during and after the 2008-2009 global financial crisis and enough for every adult in the world to receive a $2,000 check.

A good chunk of initial COVID-19 aid funding is being used – quite rightly – to support health care systems, preserve people’s livelihoods and stabilize employment. But much is slated for investment into infrastructure and economies. Whether those are climate-friendly investments or not still remains to be seen.

While the world’s bout with the virus is far from over, there is already talk amongst leaders like Joe Biden and Boris Johnson about rebuilding toward a more sustainable, more resilient future.

The global economic rebuild could include efforts to avoid the worst impacts of one of today’s looming mega-threats: climate change.

Money needed to achieve climate goals

Moving toward a cleaner energy world is cheaper than many people perceive.

My work at the Electric Power Research Institute, University of Tennessee and with the Intergovernmental Panel on Climate Change focuses on the costs and benefits of energy and climate decisions made by governments and companies.

According to research done by me and my colleagues, we estimate it would cost around $1.4 trillion per year over the next five years in clean-energy investment to meet the goals of the Paris climate agreement. This amount – if invested around the globe in things like solar and wind power, advanced power grids, carbon capture and storage, biofuels, electric vehicles, better insulated homes and other carbon-saving efforts – would start to bend the emissions curve, putting the world on a path to net-zero emissions by midcentury.

In other words, it is by no means impossible to hold global temperature rise to +1.5 C (2.7 F).

Two people walking in front of a large solar panel at a solar farm.
Investments in low-carbon energy production, like solar, as well as energy efficiency improvements, can do much to reduce carbon emissions. AP Photo/Rich Pedroncelli

A lot is already being spent on climate initiatives

While $1.4 trillion per year sounds like a lot of money, it’s actually not so much greater than what is already being spent on clean energy worldwide.

Countries are projected to invest an estimated $1.1 trillion per year over the next five years into low-carbon energy strategies. This pathway would take the world toward 3 degrees Celsius of warming, a level that could be quite harmful for the planet.

Much of this funding comes in response to national, state and local policy mandates and incentives. But a lot is happening thanks to pure economics as well: companies aiming to profit from new clean energy installations, which are becoming increasingly more affordable in many places.

Thus, taking into account the $1.1 trillion per year baked into the system already, the additional amount of clean energy investment needed to get on a 1.5 C track comes to just $0.3 trillion – or $300 billion – per year over the next five years.

For the entire globe, $300 billion per year over five years – or $1.5 trillion cumulative – is not an outrageous sum of money. It represents just one-eighth of the $12.2 trillion governments around the world have announced for COVID-19 relief to date.

Thus, a fraction of current bailout funding could provide the extra near-term boost the world needs to get on track to meet +2 or 1.5 C (+3.6 or 2.7 F) of warming, the levels countries committed to in the 2015 Paris climate agreement.

Joe Biden speaking at a lectern outside in front of a stand of trees.
President-elect Joe Biden has proposed large investments into clean energy. AP Photo/Patrick Semansky

Change course, then move forward

President-elect Joe Biden is calling for some $1.7 trillion investment in clean energy and energy efficiency over the next 10 years. This level of investment, if also realized in other countries, could put the world on a path to meeting the goals of the Paris Agreement.

The U.S. has already committed trillions of dollars for COVID-19 relief, much of which is going toward important needs like patient care, vaccine research and direct economic bailouts. But economic recovery plans contain money for long-term economic growth, too. And that’s the money I am suggesting could be directed toward climate-friendly investments.

Meeting the Paris goals will ultimately demand continued and increasing investments going forward, climbing above the $300 billion per year over the next five years that would get the world on track to 1.5 C (2.7 F). Nevertheless, an initial injection of funds into clean energy could achieve two goals: boost the global economy through large infrastructure spending and accelerate the deployment of clean energy production and energy efficiency measures.

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Like with so many things, the question seems to be one of political will – are governments and companies willing and able to turn toward a cleaner, more prosperous future to the benefit of all?

Public funding appears to be available – for now – and given how massive this funding is, it provides a unique opportunity to catalyze the development, deployment and dissemination of clean technologies during the next decade, an absolutely critical period in the fight against climate change.

David L. McCollum is a Research Fellow in Energy and Environment at the Howard H. Baker Jr. Center for Public Policy, University of Tennessee, and a Principal Technical Leader at the Electric Power Research Institute in Palo Alto, California.

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Shipping company files surprise Chapter 7 bankruptcy, liquidation

While demand for trucking has increased, so have costs and competition, which have forced a number of players to close.

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1 hour ago

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March 8, 2024

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The U.S. economy is built on trucks.

As a nation we have relatively limited train assets, and while in recent years planes have played an expanded role in moving goods, trucks still represent the backbone of how everything — food, gasoline, commodities, and pretty much anything else — moves around the country.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

"Trucks moved 61.1% of the tonnage and 64.9% of the value of these shipments. The average shipment by truck was 63 miles compared to an average of 640 miles by rail," according to the U.S. Bureau of Transportation Statistics 2023 numbers.

But running a trucking company has been tricky because the largest players have economies of scale that smaller operators don't. That puts any trucking company that's not a massive player very sensitive to increases in gas prices or drops in freight rates.

And that in turn has led a number of trucking companies, including Yellow Freight, the third-largest less-than-truckload operator; J.J. & Sons Logistics, Meadow Lark, and Boateng Logistics, to close while freight brokerage Convoy shut down in October.

Aside from Convoy, none of these brands are household names. but with the demand for trucking increasing, every company that goes out of business puts more pressure on those that remain, which contributes to increased prices.

Demand for trucking has continued to increase.

Image source: Shutterstock

Another freight company closes and plans to liquidate

Not every bankruptcy filing explains why a company has gone out of business. In the trucking industry, multiple recent Chapter 7 bankruptcies have been tied to lawsuits that pushed otherwise successful companies into insolvency.

In the case of TBL Logistics, a Virginia-based national freight company, its Feb. 29 bankruptcy filing in U.S. Bankruptcy Court for the Western District of Virginia appears to be death by too much debt.

"In its filing, TBL Logistics listed its assets and liabilities as between $1 million and $10 million. The company stated that it has up to 49 creditors and maintains that no funds will be available for unsecured creditors once it pays administrative fees," Freightwaves reported.

The company's owners, Christopher and Melinda Bradner, did not respond to the website's request for comment.

Before it closed, TBL Logistics specialized in refrigerated and oversized loads. The company described its business on its website.

"TBL Logistics is a non-asset-based third-party logistics freight broker company providing reliable and efficient transportation solutions, management, and storage for businesses of all sizes. With our extensive network of carriers and industry expertise, we streamline the shipping process, ensuring your goods reach their destination safely and on time."

The world has a truck-driver shortage

The covid pandemic forced companies to consider their supply chain in ways they never had to before. Increased demand showed the weakness in the trucking industry and drew attention to how difficult life for truck drivers can be.

That was an issue HBO's John Oliver highlighted on his "Last Week Tonight" show in October 2022. In the episode, the host suggested that the U.S. would basically start to starve if the trucking industry shut down for three days.

"Sorry, three days, every produce department in America would go from a fully stocked market to an all-you-can-eat raccoon buffet," he said. "So it’s no wonder trucking’s a huge industry, with more than 3.5 million people in America working as drivers, from port truckers who bring goods off ships to railyards and warehouses, to long-haul truckers who move them across the country, to 'last-mile' drivers, who take care of local delivery." 

The show highlighted how many truck drivers face low pay, difficult working conditions and, in many cases, crushing debt.

"Hundreds of thousands of people become truck drivers every year. But hundreds of thousands also quit. Job turnover for truckers averages over 100%, and at some companies it’s as high as 300%, meaning they’re hiring three people for a single job over the course of a year. And when a field this important has a level of job satisfaction that low, it sure seems like there’s a huge problem," Oliver shared.

The truck-driver shortage is not just a U.S. problem; it's a global issue, according to IRU.org.

"IRU’s 2023 driver shortage report has found that over three million truck driver jobs are unfilled, or 7% of total positions, in 36 countries studied," the global transportation trade association reported. 

"With the huge gap between young and old drivers growing, it will get much worse over the next five years without significant action."

Related: Veteran fund manager picks favorite stocks for 2024

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Wendy’s has a new deal for daylight savings time haters

The Daylight Savings Time promotion slashes prices on breakfast.

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March 8, 2024

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Daylight Savings Time, or the practice of advancing clocks an hour in the spring to maximize natural daylight, is a controversial practice because of the way it leaves many feeling off-sync and tired on the second Sunday in March when the change is made and one has one less hour to sleep in.

Despite annual "Abolish Daylight Savings Time" think pieces and online arguments that crop up with unwavering regularity, Daylight Savings in North America begins on March 10 this year.

Related: Coca-Cola has a new soda for Diet Coke fans

Tapping into some people's very vocal dislike of Daylight Savings Time, fast-food chain Wendy's  (WEN)  is launching a daylight savings promotion that is jokingly designed to make losing an hour of sleep less painful and encourage fans to order breakfast anyway.

Wendy's has recently made a big push to expand its breakfast menu.

Image source: Wendy's.

Promotion wants you to compensate for lost sleep with cheaper breakfast

As it is also meant to drive traffic to the Wendy's app, the promotion allows anyone who makes a purchase of $3 or more through the platform to get a free hot coffee, cold coffee or Frosty Cream Cold Brew.

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Available during the Wendy's breakfast hours of 6 a.m. and 10:30 a.m. (which, naturally, will feel even earlier due to Daylight Savings), the deal also allows customers to buy any of its breakfast sandwiches for $3. Items like the Sausage, Egg and Cheese Biscuit, Breakfast Baconator and Maple Bacon Chicken Croissant normally range in price between $4.50 and $7.

The choice of the latter is quite wide since, in the years following the pandemic, Wendy's has made a concerted effort to expand its breakfast menu with a range of new sandwiches with egg in them and sweet items such as the French Toast Sticks. The goal was both to stand out from competitors with a wider breakfast menu and increase traffic to its stores during early-morning hours.

Wendy's deal comes after controversy over 'dynamic pricing'

But last month, the chain known for the square shape of its burger patties ignited controversy after saying that it wanted to introduce "dynamic pricing" in which the cost of many of the items on its menu will vary depending on the time of day. In an earnings call, chief executive Kirk Tanner said that electronic billboards would allow restaurants to display various deals and promotions during slower times in the early morning and late at night.

Outcry was swift and Wendy's ended up walking back its plans with words that they were "misconstrued" as an intent to surge prices during its most popular periods.

While the company issued a statement saying that any changes were meant as "discounts and value offers" during quiet periods rather than raised prices during busy ones, the reputational damage was already done since many saw the clarification as another way to obfuscate its pricing model.

"We said these menuboards would give us more flexibility to change the display of featured items," Wendy's said in its statement. "This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants."

The Daylight Savings Time promotion, in turn, is also a way to demonstrate the kinds of deals Wendy's wants to promote in its stores without putting up full-sized advertising or posters for what is only relevant for a few days.

Related: Veteran fund manager picks favorite stocks for 2024

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United Airlines adds new flights to faraway destinations

The airline said that it has been working hard to "find hidden gem destinations."

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2 hours ago

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March 8, 2024

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Since countries started opening up after the pandemic in 2021 and 2022, airlines have been seeing demand soar not just for major global cities and popular routes but also for farther-away destinations.

Numerous reports, including a recent TripAdvisor survey of trending destinations, showed that there has been a rise in U.S. traveler interest in Asian countries such as Japan, South Korea and Vietnam as well as growing tourism traction in off-the-beaten-path European countries such as Slovenia, Estonia and Montenegro.

Related: 'No more flying for you': Travel agency sounds alarm over risk of 'carbon passports'

As a result, airlines have been looking at their networks to include more faraway destinations as well as smaller cities that are growing increasingly popular with tourists and may not be served by their competitors.

The Philippines has been popular among tourists in recent years.

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United brings back more routes, says it is committed to 'finding hidden gems'

This week, United Airlines  (UAL)  announced that it will be launching a new route from Newark Liberty International Airport (EWR) to Morocco's Marrakesh. While it is only the country's fourth-largest city, Marrakesh is a particularly popular place for tourists to seek out the sights and experiences that many associate with the country — colorful souks, gardens with ornate architecture and mosques from the Moorish period.

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"We have consistently been ahead of the curve in finding hidden gem destinations for our customers to explore and remain committed to providing the most unique slate of travel options for their adventures abroad," United's SVP of Global Network Planning Patrick Quayle, said in a press statement.

The new route will launch on Oct. 24 and take place three times a week on a Boeing 767-300ER  (BA)  plane that is equipped with 46 Polaris business class and 22 Premium Plus seats. The plane choice was a way to reach a luxury customer customer looking to start their holiday in Marrakesh in the plane.

Along with the new Morocco route, United is also launching a flight between Houston (IAH) and Colombia's Medellín on Oct. 27 as well as a route between Tokyo and Cebu in the Philippines on July 31 — the latter is known as a "fifth freedom" flight in which the airline flies to the larger hub from the mainland U.S. and then goes on to smaller Asian city popular with tourists after some travelers get off (and others get on) in Tokyo.

United's network expansion includes new 'fifth freedom' flight

In the fall of 2023, United became the first U.S. airline to fly to the Philippines with a new Manila-San Francisco flight. It has expanded its service to Asia from different U.S. cities earlier last year. Cebu has been on its radar amid growing tourist interest in the region known for marine parks, rainforests and Spanish-style architecture.

With the summer coming up, United also announced that it plans to run its current flights to Hong Kong, Seoul, and Portugal's Porto more frequently at different points of the week and reach four weekly flights between Los Angeles and Shanghai by August 29.

"This is your normal, exciting network planning team back in action," Quayle told travel website The Points Guy of the airline's plans for the new routes.

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