Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Category: Environment

  • A look at “tree equity” across the United States

    American Forests, which is a US non-profit conservation organization, publishes something that they call a Tree Equity Score. What it effectively does is map tree cover across US cities. You can explore what that looks like, here. The score considers things like tree canopy, population density, income, race, as well as many other factors, and then produces a single score from 0 to 100. A score of 100 means that a neighborhood has achieved “Tree Equity.”

    There is seemingly a lot that you can glean from this score. For one, American Forests have found that income and race tend to correlate with tree canopy. Lower income neighborhoods tend to have less of it and rich neighborhoods tend to have more of it. You can start to see what that looks like in the Instagram post embedded at the top of this post. If it isn’t showing up, click here.

    But the other thing that is clear from these images is that rich people tend to consume more space. The richer tree-canopied neighborhoods appear to be less dense. The lots are bigger. And there are instances where the homes look to be adjacent to some large contiguous green spaces. This, of course, is a natural market outcome.

    The Tree Equity Score tries to correct for this in its methodology. If a neighborhood’s population density is very low (less than 2,000 people per km2), then it gets a higher tree canopy adjustment factor. It should have more trees. Conversely, if a neighborhood’s population density is high (over 8,000 people per km2), then it’s acceptable for there to be less trees (lower adjustment factor).

    That said, it would be interesting to see a direct comparison of two neighborhoods — one rich and one poor — that have the exact same population densities and overall built form. I think that would speak volumes about tree inequity. I am also very curious about the global relationship between density and household incomes.

    If any of you have a good source, please share it in the comment section below.

  • Our sustainability goals and the price of carbon

    This is an interesting article talking about the price of carbon and where it will need to go if we are to get to zero carbon emissions by 2050. The current price of carbon on the EU’s Emissions Trading System is around $59 per tonne. But according to the OECD, carbon will need to be closer to $150 per tonne by 2030 to keep the world on track with its sustainability goals. What this means is that if you emit carbon, it will get more expensive to do that.

    The article also suggests that there is talk of a minimum price on carbon that would slowly increase over time. This would provide greater certainty to investors who are buying/trading carbon, while at the same time encouraging a broader push away from carbon emissions. This proposal has been backed by the Net-Zero Asset Owner Alliance, which is a group of companies that collectively represent about $6.6 trillion of assets under management.

    I think it is clear that we are headed in this direction. But it is going to be an expensive transition. Take, for example, the case of new buildings. Many/most cities now have sustainability goals that similarly increase — become more stringent — over time. The thinking is that this gradual transition allows the development industry to incrementally adapt. Makes sense.

    However, there are real challenges. Generally speaking, these new targets increase the cost of building. The result is a set of opposing forces. We want more sustainable buildings, but we also want more affordable housing. The problem is that the former often works against the latter, even though it is the right thing to do. And so it is not only about the industry catching up to new targets, it is also about the market catching up through higher rents and higher sale prices.

    My view is that offsets and subsidies are important to rebalancing some of these forces. Because without them, it is likely that we are doing things that run counter to each other.

  • Sea-level rise projections in the Florida Keys

    Monroe County, Florida, which is the county that includes the Florida Keys, held a public meeting at the end of last month to discuss what they are going to do to respond to climate change. The agenda can be found over here. According to this article in Grist, it was a seven-hour public meeting and the overall tone was something along the lines of this:

    “The water is coming and we can’t stop it,” said Michelle Coldiron, mayor of Monroe County, which encompasses the Keys. “Some homes will have to be elevated, some will have to be bought out. It’s very difficult to have these conversations with homeowners, because this is where they live. It can get very emotional.”

    In attendance at the public meeting was a scientist from the National Oceanic and Atmospheric Administration (NOAA), who outlined that they are expecting an additional 17 inches of sea level rise by 2040. This is the “intermediate high” scenario based on the below chart.

    Which is why the county is looking to spend $1.8 billion over the next 25 years to raise some 150 miles of roads and deploy a bunch of other fixes that include things like new drains, pumping stations, and vegetation — all of which are of course intended to mitigate the impacts of sea level rise.

    One problem, which shouldn’t be all that surprising, is that the county doesn’t have the money to pay for all of this. And as the quote at the beginning of this post suggests, part of “this” includes buying out many of the homes. Presumably these are the higher risk homes where there are no clear alternatives.

    This is a problematic situation. Because as time goes on, one would expect the tax base here to start to decreasing. Both as homes get bought out and as overall housing demand weakens. There are also financing and insurance considerations. Already the Keys have some of if not the highest insurance premiums in Florida.

    As I understand it, the Florida Keys are one of the most vulnerable areas in North America when it comes to sea level rise. And so unfortunately, the public meeting that took place two weeks ago could very well be considered a leading indicator for what’s to come.

  • Electric vs. internal combustion engine

    Porsche released its first electric car back in 2019. It was the 2020 Porsche Taycan, which was fairly similar to the Porsche Panamera sedan in terms of price, performance, and styling, except that it was fully electric. So if you were in the market for a very expensive sedan, it was more about whether or not you wanted an electric vehicle or a vehicle with an internal combustion engine (ICE).

    In the quarter in which it launched (Q4 2019), the Taycan ended up only representing about 7% of Porsche North America’s overall sedan sales. But by the second quarter of the following year it was nearly 50%. And in the first quarter of this year (2021), it was over 80% of their sedan sales. That was fast. Pretty soon, I would imagine there will be no point in even making the Panamera.

    Now, the Panamera and Taycan aren’t exactly mainstream vehicles. But I found the above chart (which is from Bloomberg Green) interesting in that it feels like an all-things-being-equal kind of question. If you happen to be in the market for a six-figure Porsche sedan — and all things are kind of equal — would you rather an electric model or one that runs on gas? Already most people are choosing the former.

  • A roadmap for the global energy sector

    The International Energy Agency (IEA) has just published what it is calling the first comprehensive roadmap for transitioning the world to a net zero energy system by 2050. Turns out, it’s only going to take a complete overhaul of pretty much everything to hit this important target. We are going to need to start investing some $820 billion each year (starting in 2030) on our electrical grids to support the electrification of the global economy. 90% of electricity generation is going to need to come from renewables, with 70% likely coming from solar PV and wind alone. 60% of global car sales will need to be electric by 2030. We’ll need to completely halt the sale of internal combustion engine vehicles by 2035. And by 2040, we will need to have retrofitted at least half of our existing building stock.

    Make no little plans. For a copy of the report, click here.

  • The climate idol of the unimaginative

    Here’s some food for thought around electrical vehicles. In this recent article in The American Conservative, Jordan McGillis argues that, “the electric vehicle is the climate idol of the unimaginative.”

    Rather than simply changing what’s under the hood of our cars, we should be reexamining the broader impacts that the car has had on the urban landscape. Here’s an excerpt that speaks to this:

    “All of the effort directed towards EV adoption would be better expended on improving our development patterns, bringing them to human-scale and reducing the necessity of the automobile. The obvious reform candidate is zoning. According to the New York Times, it is illegal to build anything other than a single-family home on 75 percent of land zoned for residential use in the United States. Zoning exclusively for single-family homes artificially flattens our cities, necessitates daily automobile commutes, and increases our greenhouse gas emissions. As Istvan Bart has documented for the Climate Strategy Institute, suburban sprawl bears more responsibility for increased emissions from transportation than either population or GDP.“

    There is no question that electric vehicles are helpful to addressing climate change. But Jordan is also not wrong. We can’t ignore that built form is crucial to this discussion, and likely even more important.

  • A new $162 million fund dedicated to climate change

    This week, Union Square Ventures, which describes itself as a “thesis-driven venture capital firm,” announced a new $162 million Climate Fund. The thesis for this fund is pretty simple. They want to invest in companies that either provide mitigation for or adaption to the climate crisis. The thinking behind this approach is as follows. They want to invest in companies that directly attack the causes of climate change (mitigation), but they are also recognizing that the climate crisis is not some distant thing. It’s already here, which is why it’s important to also focus on companies that are dealing with the consequences of it (adaptation).

    One of their first investments is in a company called Leap. What Leap does is provide the connective (software) tissue between local energy devices/applications and the broader energy markets. For example, let’s say you have a Leap-enabled smart thermostat. If the grid is in need of power, it might automatically reduce your local energy consumption so as to help with load balancing on the broader network. In exchange for this, you would earn money for your contributions. In effect, Leap acts as a kind of virtual power plant.

    Why does this matter? Well, it matters because two important things seem to be happening with energy production: (1) It’s moving toward renewables and (2) production and storage are both decentralizing. Assuming this trend continues, there will be an increasing need for software to help manage energy consumption, production, load balancing, the broader energy markets, and so on. That’s where companies like Leap come in. It’s also why many are arguing that Tesla is so valuable. More than an EV company, it is creating a new decentralized renewable energy network through its car batteries, powerwalls, and solar panels.

    That does sound valuable.

    Photo by Jason Blackeye on Unsplash

  • Off the grid

    Two things struck me today.

    First, I read Bloomberg Green’s daily newsletter (Nathaniel Bullard) and came across the following statistic. In 2001, the world installed 290 megawatts of solar generating capacity. This year, the world is likely to install more than 100 gigawatts of solar — that’s 350x more per year than we were installing 19 years ago. You can also see how things have changed by looking at the above chart showing wind and solar asset financing per year.

    Second, I read about Fred Wilson’s SunPower Solar system and how, since May, he has been able to satisfy 91.5% of his home’s electrical needs via solar (this includes an electric vehicle). In fact, during the month of May when temperatures were a bit cooler, he had a surplus. He was producing more than he was consuming, and so he was selling that excess production back into the grid. It wasn’t until the summer months and higher AC usage that he started having a shortfall.

    Now I don’t know where his house is located or what its roof looks like, but it is interesting to consider both the macro and micro scale. 91.5% signals to me that it shouldn’t be much longer before many people and many homes no longer need to draw any power from the grid. That’s going to be a game changer.

    Chart: Bloomberg Green

  • 3D mapping of US precipitation

    Alasdair Rae is back with another set of interesting maps. This time he maps out precipitation levels across the United Kingdom and the United States using cool 3D extruded mappings. He calls them rain shadow maps. Above is showing the average annual precipitation in the contiguous US from 1981 to 2010. The higher the peaks the higher the precipitation. Not surprisingly, the highest values are in the Pacific Northwest with over 4,064 mm (160 inches) of precipitation per annum. Some of the patterns here are also really interesting. Note California’s Central Valley.

  • Peak meat

    There is evidence to suggest, according to this recent Bloomberg Green article as well as many other sources, that we may be hitting “peak meat.” That is, the global production of animal proteins appears to be declining. It declined last year in 2019 and that was only the second time since 1961 in which that happened. And this year, the same is projected to happen, which is supposedly unprecedented in modern times.

    The big change is that people are eating a lot less beef. In fact, per capita beef production peaked way back in the 1970s and has been slowing declining ever since. The growth over the years has really been coming from chicken. In 1961, 39% of all meat production was beef. As of 2018, that number had declined to 20%. Pork as a percentage of all production has remained more or less consistent. But chicken has basically tripled from 11% to 34%.

    From an environmental and climate change standpoint, this is a very good thing. As most of you know, greenhouse gas emissions from the production of beef are vastly higher (about 10x) than for pork and chicken. Chicken is the lowest (see above). At the same time, big bets are being made that this growing love of chicken isn’t enough. In the first 7 months of 2020, over $1.4 billion of venture capital was raised for “faux meat” startups (source). This is already a significant increase compared to 2019.

    This money is expecting the future of meat to be plant-based and cell-based.

    All charts from Bloomberg Green.