Business

To understand how important weather and climate risks are to the economy, watch investors. New research shows that two long-range seasonal weather forecasts in particular can move the stock market in interesting ways. We often think about forecasts as telling us what the weather will bring in coming days, but the National Oceanic and Atmospheric Administration also predicts weather conditions several months out. These seasonal climate outlooks tell us whether the hurricane season is likely to be active, whether the winter is likely to be snowy or cold, and whether an El Niño or La Niña climate pattern is likely to emerge with the potential to influence weather across the U.S. I study the impacts of weather on economic activity as an economist. In a new paper, an atmospheric scientist at NOAA and I analyzed the influence of long-range forecasts by looking at the changing prices of stock options over 10 years and thousands of companies. We found that investors are payin...

Panasonic’s new US$4 billion battery factory in De Soto, Kansas, is designed to be a model of sustainability – it’s an all-electric factory with no need for a smokestack. When finished, it will cover the size of 48 football fields, employ 4,000 people and produce enough advanced batteries to supply half a million electric cars per year. But there’s a catch, and it’s a big one. While the factory will run on wind and solar power much of the time, renewables supplied only 34% of the local utility Evergy’s electricity in 2023. In much of the U.S., fossil fuels still play a key role in meeting power demand. In fact, Evergy has asked permission to extend the life of an old coal-fired power plant to meet growing demand, including from the battery factory. With my students at Wellesley College, I’ve been tracking the boom in investments in clean energy manufacturing and how those projects – including battery, solar panel and wind turbine...

Lego, the world’s largest toy manufacturer, has built a reputation not only for the durability of its bricks, designed to last for decades, but also for its substantial investment in sustainability. The company has pledged US$1.4 billion to reduce carbon emissions by 2025, despite netting annual profits of just over $2 billion in 2022. This commitment isn’t just for show. Lego sees its core customers as children and their parents, and sustainability is fundamentally about ensuring that future generations inherit a planet as hospitable as the one we enjoy today. So it was surprising when the Financial Times reported on Sept. 25, 2023, that Lego had pulled out of its widely publicized “Bottles to Bricks” initiative. This ambitious project aimed to replace traditional Lego plastic with a new material made from recycled plastic bottles. However, when Lego assessed the project’s environmental impact throughout its supply chain, it found that producing...

About 10 years ago, a very thick book written by a French economist became a surprising bestseller. It was called “Capital in the 21st Century.” In it, Thomas Piketty traces the history of income and wealth inequality over the past couple of hundred years. The book’s insights struck a chord with people who felt a growing sense of economic inequality but didn’t have the data to back it up. I was one of them. It made me wonder, how much carbon pollution is being generated to create wealth for a small group of extremely rich households? Two kids, 10 years and a Ph.D. later, I finally have some answers. In a new study, colleagues and I investigated U.S. households’ personal responsibility for greenhouse gas emissions from 1990 to 2019. We previously studied emissions tied to consumption – the stuff people buy. This time, we looked at emissions used in generating people’s incomes, including investment income. If you’ve ever thought abo...

Green banks are starting to draw attention in the U.S., particularly since the federal government announced its first grant competitions under a national green bank program to bring clean technology and more affordable energy to low-income communities. But installing more solar and wind electricity generation isn’t the only way green banks can help. Massachusetts is launching an innovative new green bank that could become a model as states try to manage two crises at once: lack of affordable housing and climate change. While most green banks focus on clean energy, the Massachusetts Community Climate Bank is specifically designed to boost the state’s stock of sustainable, affordable housing. It comes at an opportune time: States can now tap into billions of dollars in new federal funding for green banks under the Inflation Reduction Act. So what exactly is a green bank, and how might it work for sustainable housing? What is a green bank? Despite the name, green b...