Lehman Brothers has just released a terrific report, The Business of Climate Change II. The theme is, “Policy is accelerating, with major implications for companies and investors,” but the piece has a lot of breadth, with cogent comments on everything from the social/damage cost of carbon to auctioning vs. granfathering to the Stern Report. Here are some extended excerpts:

What are the chances for a global climate agreement?

The probability of some sort of international greenhouse-gas-limiting agreement in the next three to five years involving the US, China, and perhaps India, which earlier this year we put at 50%, will continue to rise. We now put the probability at around 75%.

Why does climate change matter to business now?

Many clients have asked for our view on the argument that, even assuming that scientists’ projections of the likely effects of climate change are broadly correct, the effects will be felt only slowly, with little effect on asset prices over most investors’ time horizons.

We judge this argument as flawed, for three, linked, reasons. First, markets anticipate even slow-moving variables, such as climate change. Second, policy made in the name of climate change could have an almost immediate, up-front effect on asset prices. And third, markets anticipate policy itself. In this way, expected future effects of climate change become brought right forward to the present.

Fundamentally, the economic case for considering climate change ultimately depends on the science. Our judgement is that the science will increasingly be seen as broadly correct; that this view will be progressively accepted by the weight of market opinion; and that, while the adjustment of asset prices has begun, full adjustment will take years, rather than months.

What is the “social” or “damage” cost of carbon?

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The Center for American Progress has put together two interactive maps in advance of next week’s climate meetings. They allow you to

Hover over a country to see how many metric tons of carbon dioxide emissions it emits per capita, or how many millions of tons it emits total, and whether it has ratified the Kyoto Accord. Invitees to Bush’s September 28th major emitters meeting are also marked.

I think you’ll find them useful tools.

Greenland ice melt shocks scientists — The Oregonian. A good article on the subject, with the added bonus of an explanation of how ice loss in the Arctic will affect the U.S.’s climate:

The melting removes an insulating blanket from the ocean surface, releasing warmth from the water into the cold air above as towering columns of warmer air.

Those columns appear to reorient global air flows the way a boulder falling into a stream reorients the current, said Jacob Sewall, a professor of geosciences at Virginia Tech, who has used atmospheric models to study the effect. The result is that the stream that carries storms over the West Coast of North America shifts north, turning much of California drier, and the Northwest wetter.

Calif. lawmaker chides EPA for approving coal plant – The Boston Globe. “Remarkably, EPA refused to consider the global warming effects of the plant or to require any measures to mitigate that harm, contravening a Clean Air Act mandate and ignoring EPA’s ample discretionary authority to act,” wrote Rep. Henry Waxman (D-CA) to EPA Administrator Stephen Johnson.

Hefty Rebate For Backyard Wind Turbines In California – Environmental News Network. Homeowners who install a turbine that costs between $12,000 and $15,000 to purchase and install and is rated at 1.8 kiloWatts, are eligible for a $4,100 rebate from the state of California.

How fearsome must the headlines be about tomorrow before
people change their ways today?
– Nancy Gibbs, TIME

In Greenland today, the ice is thawing at a pace that is alarming climate scientists. Meantime in Washington D.C., Congress remains frozen on the issue of carbon pricing. And that may be a good thing.

Carbon pricing, as most readers of Climate Progress know, is the idea that some portion of the costs of greenhouse gas emissions should be reflected in the price consumers pay for carbon-intensive fuels. The energy that is causing global climate change would cost more than the energy that isn’t, and the marketplace would become the ally of climate stabilization.

There are two schemes on the table. The first is a carbon tax — simple, straightforward and, according to conventional wisdom, political suicide. The second approach is carbon trading. Carbon emissions would be capped; polluters would buy and sell emission permits. Carbon trading is more complex and would take longer to make a difference, but because it is not a tax, it appears to be the favored approach in Congress.

Several cap-and-trade bills have been introduced in Congress, some setting tougher goals than others. The word on the street is that the leading bill will be proposed soon by Senators Warner and Lieberman. It reportedly will call for a 15% reduction in carbon emissions by 2020, compared to current levels. Therein lies the rub. Is the glass (of melted ice) half empty or half full?

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