The analysis comes from the Office of Management and Budget (OMB), responsible for administering the federal budget. It also warned that the US government may need to spend an additional $25 billion to $128 billion per year in areas including flood insurance, coastal disaster relief, and crop insurance.
“The fiscal risk of climate change is immense,” Candace Vahlsing, the OMB’s associate director for climate and chief economist Danny Yagan, wrote in a White House blog post.
“The need for urgent action is why the President called on Congress in the State of the Union and through the Budget to advance legislation that decreases energy prices, combats climate change, and grows the clean economy.”
The White House’s warning was published on the same day as the United Nations’ climate report which warns that the fight against climate change must come “now or never”. It stated that limiting climate change to 1.5 degrees Celsius above pre-industrial levels will require greenhouse gas emissions to peak before 2025 and be reduced by 43% by 2030.
Finance professionals in the UK and across the globe will have been keeping their eyes on the ongoing developments at Facebook and assessing the business implications emerging from the aftermath of the Cambridge Analytica furore. Earlier this month, Facebook Founder and Chief Mark Zuckerburg appeared before Congress in the US to discuss his company’s activities and the alleged misuse of personal data. It proved a fascinating glimpse into the inner workings of Facebook and shone a light onto how we, as individuals, are ‘willingly’ sharing our data with platforms. The truth of the matter is, not everyone understands the process and benefits such as data sharing can bring - not just to the technology industry, but a variety of sectors and stakeholders from retail to finance, and to both advertisers and consumers.
Despite the guidelines on sharing third party data of thekrogerfeedback for winning $5000 that are already in place, the issue has called into question whether the practice requires further regulation so that lawmakers, industry regulators, advertisers, publishers, financiers, brands and consumers alike are clear on how and when it is acceptable to share personal information.
Facebook is in an unusual position where increased regulation in its platform would likely benefit its business. In fact, it has even welcomed closer regulation on social media, and has offered to develop further thoughts on self-regulation. The social media behemoth has the infrastructure to absorb any impact increased regulation would have on its business, but is this true of its competitors?
Publishers such as Facebook have a choice of how they use their own data, but everyone involved in the industry, including financiers, should be striving for transparency, choice and true customer centricity. Increased regulation is there to protect the consumer in the event of malpractice, bad actors or misuse of personal data. This is a unanimously positive move, and those who put their customers first will continue to survive and thrive.
Our world is becoming more and more data-driven. The opportunities to leverage this data are plenty and benefit all parties, but they need to be done in an ethical, privacy-compliant way that assists the customer rather than exploits them. Greater clarity and regulation that focuses on eliminating the latter - and not inhibiting the former - should be welcomed with open arms by all stakeholders.
Facebook has a wealth of personal data that is volunteered by its members - in effect creating the largest identity graph in the world today. Regulation has to ensure that Facebook - as well as any others in the publisher community - is transparent with how that data is collected and used. To this extent, the impact of regulation should be to create a level playing field and promote the democratisation of data.
The challenge comes when advertisers decide where to spend their budgets. Marketers have more choices than ever and can reach consumers in thousands of places online. The use of third-party data both inside and beyond Facebook’s walls is the means to providing that choice. The alternative is for Facebook to monopolise targeted advertising, which would be bad for the industry as a whole.
If advertisers want to allocate their spend across multiple publishers and platforms, it makes sense to be able to leverage standardised data models and apply them everywhere, rather than building custom models across every touch point. LiveRamp enables this neutrality and agnosticism, and provides a secure and privacy compliant connection to any destination platforms an advertiser wishes to use.
Advertisers’ data is one of their most valuable assets, and they need to be comfortable when sharing it with platforms and publishers like Facebook. More stringent regulations concerning personal data can serve to give advertisers the peace of mind that their data is secure, and allow them to confidently demonstrate its ethical use whenever called upon to do so.
This can only work if data providers source and govern their data in ethical, privacy-compliant ways. The best models and experiences draw from multiple ethical data sources working together, all with the best interests of the customer at heart.
Advertisers need to look out for themselves, their customers and their own data. They should seek to adhere to ethical practices and work only exclusively with experienced and ethical partners.
I believe increased regulation has the potential to benefit not only Facebook but also its competitors. Increased transparency in any industry, be it the financial or tech sector, should make it easier for businesses and consumers to connect and interact, unlocking additional value for both. Regulation, if designed and imposed correctly, can help consumers hold greater control of how their data is used while allowing businesses to use it more responsibly and efficiently.
The White House is on fire. Every day – almost every few hours – new scandals are breaking. From investigations about Russian collusion to alleged obstruction of justice, the blaze is white hot. But when it comes to the world of businesses and law, it's not the alleged criminal law bombshells that are causing the most panic. James Goodnow, talks to Finance Monthly.
On June 1st, US President Donald Trump formally announced what everyone knew was coming: the US is out of the Paris Climate Accord. The announcement and its build up set off another explosion the likes of which Trump and his Twitter account aren't as accustomed to fighting: a neck-snapping backlash from the business community and the lawyers who represent them.
Trump Thumbs His Nose at Business
“Global warming is an expensive hoax!” Donald Trump famously — or infamously — tweeted in January 2014. With that shot across the bow at the global scientific community, Trump started his war against climate change. His claim served as a rallying cry for his base supporters — many of whom believed that rejecting limits on carbon emissions would lead to a resurgence of US jobs in the coal industry. And the strategy was largely successful, catapulting Trump into the White House.
Despite Trump's bluster, the business community largely took a wait-and-see approach following Trump's election. The reason: Trump engaged in plenty of campaign hyperbole that was ultimately dialed back once he assumed office. Obamacare "repeal and replace" is stalled, construction has not started on Trump's border wall with Mexico, and his travel ban has been blocked by the courts. Perhaps the withdrawal from the Paris Accord would end with the same fate: a promise that would be delayed or not fulfilled.
The business world miscalculated. What business leaders monitoring the situation failed to account for is the fact Trump was backed into a corner. He needed a win with his base. And withdrawal from the Paris Accord is one of the only "successes" he could accomplish unilaterally.
The Business World's Reaction
The response from the business and legal community has been swift. On June 1, 25 major US companies, including juggernauts Apple, Facebook, Google and PG&E signed an open letter to the president that appeared in the New York Times and Wall Street Journal. The letter makes the business case for the Paris Accord: "Climate change presents both business risks and business opportunities."
The day before the announcement, Tesla and SpaceX CEO Elon Musk gave Trump an informal ultimatum on Twitter, saying he will have "no choice but to depart" from Trump advisory councils if Trump pulled the plug on the Paris Accord. Musk's comments are not isolated. Since the election, over 1000 businesses signed the Business Backs Low-Carbon USA statement.
The chorus of voices coming from the business community is united by a common theme: US withdrawal from the Paris Accord is not only ethically questionable, but leads to dangerous instability for business. Every day, business leaders make difficult decisions about where to allocate resources. A stable and uniform framework allows businesses to confidently invest in technology that will last into the future. According to the Business Backs Low-Carbon USA statement: "Investment in the low carbon economy ... give[s] financial decision-makers clarity and boost[s] the confidence of investors worldwide."
Legal Community Reaction
Trump's decision has also put lawyers into hyper-drive. Within Washington, there is widespread disagreement about the legal implications of Trump's move. Last week, a group of 22 US lawmakers, including Senate majority leader Mitch McConnell, warned Trump in a letter that his failure to withdraw from the Paris Accord could open the litigation floodgates: “Because of existing provisions within the Clean Air Act and others embedded in the Paris Agreement, remaining in it would subject the United States to significant litigation risk." But it's far from clear that US withdrawal from the Paris Accord will immunize the White House from the courts – with groups that favor the agreement already having vowed to sue.
In-house lawyers are no doubt sweating, as well. Lawyers at large corporations with operations in the United States are tasked with providing recommendations to business leadership on what they can and can't do from a regulatory perspective. With Trump pulling the US out the Paris Accord, lawyers now have to look to domestic regulations — a scheme that itself could be turned upside down — and try to reconcile those with international protocols. All of this uncertainty may translate into lawyers feeling like they are walking on quicksand.
Trump's Political Miscalculation?
Trump prides himself on operating on instinct. Prior to making his decision to pull out from the Paris Accord, he no doubt felt the rumblings of this business backlash coming. Why, then, did he move forward? Part of the answer may lie in his examining his base. Recent polls show that, for the first time, Trump's support among his core supporters is starting to erode. And that may spell danger for Trump, who relied on a mobilized and rock-solid base to ride into the White House. Trump thus decided that his need for a political victory and appeasing his base was worth the kickback from the business community.
But Trump may be missing something here. According to many reports, moderate conservatives and centrists who voted for Trump did so in part because they believed his rhetoric was nothing more than puffing that wouldn't ultimately be acted on. They were willing to throw their support behind him believing that he would revert to more traditional GOP, pro-business values.
But Trump's withdrawal from the Paris Accord demonstrates that Trump isn't all talk. When his back is against the wall, he is willing to act – even if it means acting against the interests of non-base voters who helped elect him. That realization may alienate the critical segment of the business electorate he needs to win again in 2020. More immediately, it may spell trouble for Republican members of Congress in 2018.
The White House is on fire. But it may not be heat from the blaze that stops Trump politically – but rather a cooling to Trump and his policies from moderate Republicans and the business world.
James Goodnow is an attorney and legal and political commentator based in the United States. He is a graduate of Harvard Law School and Santa Clara University. You can follow him on Twitter at @JamesGoodnow or email him directly at james@jamesgoodnow.com.
