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(NEW YORK) — After managing to avoid the same level of scrutiny as fellow tech giants such as Twitter and Facebook for years, streaming service Spotify has now found itself at the center of a scandal involving the platform it gives to those disseminating misinformation about COVID-19.

The saga stems from episodes of “The Joe Rogan Experience” podcast, which critics said peddled dangerous misinformation about COVID-19 vaccines to his millions of listeners. Spotify made headlines back in 2020 for reportedly licensing a $100 million deal to exclusively host Rogan’s often controversial namesake podcast.

Following immense backlash that included artist Neil Young yanking his music from the platform and a petition demanding action from Spotify signed by hundreds of doctors, scientists and public health professionals, Spotify responded late Sunday by saying it will add a “content advisory” label to any podcast episode that includes a discussion about COVID-19 and directs listeners to its “COVID-19 Hub” for up-to-date information on the virus as shared by public health authorities.

The streaming service, however, stopped short of removing any podcast episodes that have been criticized for spreading misinformation about the virus. A contrite Rogan said he supports Spotify’s decision in a 10-minute video posted to Instagram on Sunday, and he promised to add more guests with “differing opinions.”

While experts say Spotify’s actions are a good starting point, many say they remain skeptical of how effective these advisory labels will ultimately be at undoing or curbing the real-world damage caused by virus misinformation online.

“What we know is that it’s not going to have a strong effect in terms of changing people’s minds,” Ellen Goodman, a professor at Rutgers Law School whose research focuses on information policy law, free speech and media policy, told ABC News of adding fact-checking labels to misinformation. Goodman stressed that most of the research on this topic, however, looks at traditional social media platforms versus streaming services like Spotify.

Goodman said that existing research on this topic has shown that it is unlikely people’s opinions are going to be changed by something like a fact-checking label, especially for content on “something as polarizing as vaccines.”

“The evidence shows that it probably doesn’t do a huge amount to dissuade people from their priors,” she added. “But, also, the evidence shows that if they’re not coming into it with a prior, like they’re not in one camp or the other — it’s hard to imagine that there are people like on the fence about this issue — but if there are such people, then disclaimers can be effective.”

In a company blog post on Sunday announcing the updates, Spotify CEO Daniel Ek said, “Personally, there are plenty of individuals and views on Spotify that I disagree with strongly.”

“We know we have a critical role to play in supporting creator expression while balancing it with the safety of our users,” Ek added. “In that role, it is important to me that we don’t take on the position of being content censor while also making sure that there are rules in place and consequences for those who violate them.”

Goodman, meanwhile, told ABC News that she thinks it’s “nonsense to say that they don’t want to censor.”

“It’s not censorship, it’s making choices,” she said. “They are exercising editorial control when they decide what to put on their platforms and whatnot, and what to promote, and obviously this was a huge business deal for Spotify.”

“They are making their choices; they have a right to make those choices,” Goodman added, saying that having decided to host Rogan’s podcast, the company likely knew the kind of content moderation challenges this could present, adding, “but those are the kinds of editorial decisions that media platforms make all the time.”

Another problem many platforms have had with the labeling approach to misinformation is that it can open a whole can of worms for companies then deciding what rises to the level of meriting a label and what doesn’t, Goodman added, saying navigating these tripwires has proven especially difficult for social media giants in recent years.

Researchers at the Massachusetts Institute of Technology similarly warned on a 2020 study that putting warning labels on fake news can carry a catch of making people more readily believe other false stories that aren’t tagged, and that there is no way fact-checkers can keep up with the stream of misinformation to combat this so-called “implied truth effect” caused by the addition of just some labeling.

Epidemiologist Dr. John Brownstein, the chief innovation officer at Boston Children’s Hospital and an ABC News contributor, was one of the signatories of the headline-grabbing petition from scientists and doctors slamming an episode of Rogan’s podcast that featured a doctor who has been banned from Twitter for COVID-19 misinformation.

“It’s a good starting point,” Brownstein said of Spotify’s response, but he expressed frustration at how rapidly a public health campaign can be “undermined by a very, very small minority.”

“We’ve seen this movie play out before, where you can undo massive amounts of public health advance through even the smallest amount of objection,” he added. “We saw this with the linkage between vaccination and autism, where even though that research in itself was debunked, that that false linkage still persists today.”

“Regardless of a warning, I think people will ultimately still listen,” Brownstein said of content advisory labels. “A warning won’t necessarily have a major impact necessarily on how people absorb the information.”

He said he believes tech platforms bear a “massive responsibility” in figuring out “how not to provide equal footing” to false information about science and in quelling its spread, especially during a public health crisis.

“They need to find ways to not perpetuate rumors or misinformation about vaccines that ultimately cost lives,” Brownstein said. “There’s a responsibility, because these are not just sort of online chats, this is information that translates to someone’s decision about getting a vaccine.”

 

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(NEW YORK) — Veganuary is over, but that doesn’t mean your sustainable fashion journey has to be.

The Veganuary challenge was created by a UK nonprofit of the same name to educate people about veganism during the month of January. While in 2014 it started off as a sign-up program to help participants follow plant-based diets, it has since grown into a movement, with people in every field — particularly fashion and beauty — embracing it.

Over the past several years, the interest in vegan and sustainable fashion has risen rapidly, according to The Vegan Society, not only among young designers who are conscious about the health of the planet, but also among consumers who are learning about the benefits of leaving behind fast fashion.

Good Morning America spoke with a group of sustainable designers about how they developed their businesses, why they decided to take the vegan route and what can be done, by both creators and shoppers, to help make the fashion and beauty industries less wasteful — not only during January, but every day.

The wave of sustainable and vegan fashion designers

Monica Santos, a Puerto Rican designer based in New York, launched her brand, Santos by Monica, amid the COVID-19 pandemic, to “challenge the traditions of the fashion industry” in a way that reflected her values and did not negatively impact the environment.

Before taking the leap with her label, the designer worked for numerous fast fashion (the business model of replicating trends and mass-producing them at a low cost) and luxury brands, and said she “gained visibility into supply chains and realized the effect the fashion industry has on the planet and garment workers and wanted to do something different.”

That’s when she said she decided to create a collection of handbags made entirely out of cactus leather — one of the various vegan leathers which sustainable brands have been loving.

Similarly, LØCI, the sneaker brand which has been endorsed by celebrities and dropped a collection with actress Nikki Reed, has made a name for itself due to its “animal free always” motto. Its 100% vegan shoes are made using recycled materials, including ocean plastic upper for the upper, foam and cork for the insoles, ethically sourced bamboo for the lining and rubber for the outsole.

LØCI co-founders Emmanuel Eribo and Philippe Homsy are not the only creatives using plastic waste to make products. While the material can be turned into vegan leather, it can also be made into smooth fabric — just ask La Gotta founder Valeria del Rey, whose stunning swimsuits are made out of recycled plastic bottles.

“La Gotta progressed organically toward becoming a sustainable brand based on my personal passion for second-hand and vintage pieces, as well as on my love for the environment, particularly our oceans and beaches,” del Rey said.

The love for the planet runs deep in the sustainable fashion industry. The team at SINBONO, a vegan handbag brand, said they decided to take the sustainability route after realizing that by adopting sustainable options, they could drop their carbon footprint by around 73% and help slow down global warming. “It is important to keep the planet’s health before our desires,” they said. “Our vegan leather is composed of a mixture of responsibly recycled plastic bottles and reclaimed fruit material. This produces a high-quality product that looks like animal skin, without harming animals or the environment.”

Casey Dworkin, the founder of vegan New York-based footwear brand Sylven, is an example of a designer embracing vegan design but not letting go of luxury. Her plant-based shoes are handcrafted in Italy by expert artisans, and have the look, the feel and the durability of high-end European leather shoes — but without the negative impacts that come with producing them. (According to PETA, turning animal skin into leather “requires massive amounts of energy and dangerous chemicals,” and raising animals for their skin to eventually be turned into leather “requires huge amounts of feed, pastureland, water, and fossil fuels.”)

“I was actually born on Earth Day. I started getting involved with environmental advocacy when I was around 14, and it has always been a big part of my life,” Dworkin said. “When I decided to launch my own brand, sustainable practices were a must for me from the get-go. I am incredibly passionate about new-age materials and components made from plants, so I focus a lot of my messaging on material use, but sustainability really is a holistic practice.”

Because of the recent popularity of vegan leathers, consumers now have many options to choose from when it comes to sustainable footwear and handbag brands, but for apparel, it’s often more difficult, as there is so much that goes into creating truly sustainable garments that are of high quality and last for generations.

French brand Parisienne et Alors is one of the brands designing sustainable ready-to-wear. Creative director Laury Thilleman said every piece is made locally in France and crafted from recycled and/or upcycled fabrics — most from natural fibers. “Fashion is one of the most polluting industries, but Parisienne et Alors is determined to make a change and to stand out as a positive example of how fashion can make a difference,” Thilleman told GMA.

Another European brand, Manola, creates chic activewear from environmentally-friendly materials, such as recycled nylon from ECONYL (which comes from discarded fishing nets, plastic and carpets) or organic cotton from PYRATEX, which generates 46% less greenhouse gas emissions than conventional cotton.

Loungewear brand PANGAIA is also big on recycled fabrics, and uses plant fibers, bio-based fibers and leather alternatives. Their approach to creating fashion is very much science-based. “Our goal is to demystify science and become a bridge builder between science and fashion — to make sustainable innovations the new normal,” Chief Innovation Officer Amanda Parkes said.

More mainstream brands are also embracing veganism and sustainability. Patagonia, Levi’s, Fabletics and H&M are all implementing sustainable practices into their businesses, and expanding their clientele by doing so. “Fabletics understands the importance of protecting the environment, and we want to ensure we are doing our part. As such, while there’s much work to be done, we have made sustainability a core focus and are proud of the steps we’ve taken thus far,” the Fabletics team, which just released various vegan leather leggings and pants, said.

Vegan beauty

Natural beauty products have been in for some time now, but for many brands today, the challenge has become: How do you make your production and shipping methods sustainable and entice people with the history and roots behind your organic products?

Luca, a fragrance company established in Old San Juan, Puerto Rico, in 2013, works with sustainable, local suppliers, uses upcycled (products made by transforming other recycled products) materials and only puts out small drops. “One of our core oils is a fossilized amber extracted from a 35 million-year-old Himalayan fossilized tree resin. This oil comes from a process called ‘dry distillation,’ whereby the Amber resin is processed over high heat until an oily substance is obtained. Another stellar oil in our perfume is the cedar, which is obtained from the sawdust created when the wood is cut for lumber,” the Luca team said.

Another brand, Kumiko, also said it embraces nature and shows consumers the benefits of living a vegan lifestyle, through skincare. The company said its products are made with Japanese matcha tea, an antioxidant, and are non-toxic, gluten-, parabens- and cruelty-free.

“It is an undeniable reality that the vegan preference is on the rise worldwide, along with respect and care for the environment. Kumiko is aware of this, with a total commitment for sustainable products from the beginning of the production line to the end, always considering recyclable packaging,” the team said.

Sustainability is a lifestyle

Organic ingredients and vegan leathers — particularly cactus, apple, pineapple and corn — have become the new go-tos for sustainable designers looking to create eco-friendly luxury, but as people learn more and more about sustainability, it has become clear that there are many parts to it, both as a creator and a consumer.

Using organic, vegan materials is just one of the things brands are doing to make their businesses more sustainable; there is also packaging, production and ethics to think about. LØCI, for example, said it donates 10% of its profits to environmental causes, including ocean conservation charities and carbon offset projects. Santos said she has made her entire packaging either compostable or recyclable, and recently introduced biodegradable hang tags embedded with wildflowers, so that when you plant the paper in a pot of soil, the seeds in the paper germinate and grow into plants. Also, with every Santos by Monica bag sold, one tree is planted with One Tree Planted.

Santos by Monica, apart from being charitable, follows a made-to-order production strategy, which means the designer creates only enough product to fit the demand, and therefore avoids generating waste. La Gotta and Manola produce in the same way.

Araks Yeramyan, the designer of cotton lingerie brand Araks, said educated shoppers don’t just want eco-friendly materials, they want to know that the businesses they’re supporting are actively trying to reduce their carbon footprint, eliminate toxic waste and help their communities and their planet. This idea of getting rid of waste by using natural materials or extending the life of each garment is also the reason — apart from nostalgia — vintage and pre-owned clothing sales have spiked in the fast few years.

Thrilling, an online marketplace that sells vintage and second-hand items from small businesses across the U.S., said that orders have increased by 240% over the last year, and the amount of vintage inventory that stores uploaded to the site increased by nearly 500%.

How can creators and consumers help fashion become more sustainable?

If you’re looking to make the switch to shopping vegan and living sustainably, Santos said you need to do your research.

“Consumers could be more aware by taking into account where products they consume come from, what they are made of and what the ideals of the brands they support are,” she said. “Making an effort to learn more about the brand before consuming and asking themselves if the product is something they really need before making the purchase.”

Jordan Clark, the founder of vegan footwear brand Dooeys, said shoppers should ask how things are made and buy things that last. “If a brand gives vague material information on a product page, it’s probably because it’s not worth sharing,” she said. “Invest in pieces you love now and will continue to love over the coming years. I also find it helpful to follow influencers and bloggers that focus on sustainable fashion and shop sustainable marketplaces like Made Trade that do the vetting for you.”

Del Rey said it’s also the creators’ job to educate shoppers on the actual value of a vegan brand or item, rather than market the sustainability movement as just the latest hot trend.

“We feel as if awareness of veganism in the fashion industry can be promoted the same way a vegan diet and lifestyle was,” the SINBONO team said. “If you go back a couple of years, not many people were ready to make the shift, but now, many people choose vegan products. This was primarily done through the media and companies themselves.”

And, they said, if more big, popular companies make the shift toward vegan fashion, customers will inevitably be more interested in learning about the topic.

Dworkin, of Sylven, said the word “veganism” so often gets equated with diet, but it’s absolutely a lifestyle.

“It’s about consciously eliminating the use of animal products, and fashion plays a huge part in that equation,” Dworkin said. “I think a majority of people who first dabble in being vegan really hone in on food, but I think that fashion can and should play a much larger role in introducing new alternatives to the masses, especially for people who may not be ready to make a full lifestyle change, finding a pair of boots that are made from apples instead of cows, or a coat made from Tencel instead of down is a great way to reduce the number of animal products consumed.”

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(NEW YORK) — Looking to buy a new Kia Telluride sport utility vehicle? Expect to pay $48,509 — more than $3,700 above the manufacturer’s suggested retail price.

Luxury SUVs like the Range Rover ($117,890) and Cadillac Escalade ESV ($102,584) are selling for $3,000 to $6,000 over MSRP, according to Edmunds, which compiled a list of the top 10 vehicles with the largest market adjustments in the fourth quarter of 2021.

Markups on sports cars are even more dramatic: dealers are asking (and getting) 5% over MSRP for the Corvette Stingray ($86,511) and 8% for Ford Mustang Shelby GT500 ($91,611).

“People are accepting these prices without complaining … they’re going with it and making the plunge,” Jessica Caldwell, Edmunds’ executive director of insights, told ABC News. “Dealer markups are happening all over the board. Manufacturers don’t really have control over it.”

The automotive industry has not been immune from the price hikes impacting nearly every industry. Desperate consumers are starting to surrender to the new reality: discounts, incentives and negotiating are so 2019.

In December, consumers paid on average $709 more than the suggested transaction price, Caldwell said, noting that the upward march in prices really took hold in August.

“We have not seen this happen before on an aggregate level,” she said.

And markups are impacting nearly 90% of car buyers, according to one estimate, forcing some automakers to threaten a dealer crackdown.

‘Out of control’ luxury markups

It’s the Mercedes-Benz G-Class, the boxy, ultra-luxe ute driven by celebs and socialites, that may be the most extreme example of dealership markups. The base G-Class costs $174,650 though new owners are shelling out an additional $30,405 on average — if they’re lucky to get one at all. Caldwell said she knows of one woman who recently paid $50,000 above MSRP for a G-Class. Some Mercedes dealerships are even asking $337,000 for a 2021 AMG G 63 G-Class — more than $150,000 above the MSRP, according to Caldwell.

“This woman thought she got a good deal,” said Caldwell. “Consumers feel pressure to buy right away because inventory is so low.”

Some owners of the ultra-luxe G-Class have paid $150K above the six-figure sticker price.

And it’s not just the G-Class getting the markup treatment. The Mercedes GLS SUV and GLC Coupe SUV are also seeing massive price hikes. A Mercedes-Benz spokeswoman declined to comment when reached by ABC News.

Marc Van Hengst, a brand ambassador at the Jack Daniels Porsche dealership in Upper Saddle River, New Jersey, called the car market “out of control” and said he disapproves of the outrageous prices dealers are charging.

“I don’t like to do markups. It’s bad for business and will scare people away,” he told ABC News.

Van Hengst said he sees prospective customers coming into his dealership and pleading with management for a 2022 911 GT3 — the hottest Porsche on the market now among enthusiasts. The 502-horsepower GT3 sprints from 0-60 mph in 3.2 seconds and comes with a starting price tag of $161,100. A quick search on Cars.com pulls up listings for $307,740 — $339,000 — even $349,900.

“You get a lot of performance [in the GT3] which a lot of people will not use at all … but people want the performance,” Van Hengst said. “The internet makes it seem like it’s the most desirable Porsche of all.”

Tyson Jominy, vice president of data and analytics at J.D. Power, said 87% of consumers are currently paying above MSRP, which is already at a record high. The average new vehicle price is now $45,283 versus $35,000 in December of 2019, according to J.D. Power. The global chip shortage and supply crunch have led to surging prices, Jominy said.

“There are some crazy markups and the higher price point you go the crazier they are,” he told ABC News. “Automakers have never seen anything like this. But some of them are telling dealers to cool it with markups. It’s not in their best interest long term.”

He added, “The higher markups are like a tax on rich people.”

Cracking down

Ford and General Motors are actively trying to stop dealerships from heavily marking up the price of new vehicles.

Steve Carlisle, president of GM North America, addressed customer interest for the upcoming Corvette Z06, Chevrolet Silverado EV, GMC Hummer EV, GMC Sierra EV and Cadillac Lyriq in a letter sent to the automaker’s dealer network on Jan. 18, writing in part:

“Unfortunately, it has come to our attention that in connection with some of these announcements and launches, a small number of Dealers have engaged in practices that do not support a positive sales experience for our customers. This puts our collective interests at risk and generates negative press that reflect poorly on GM’s brands and your dealerships. Specifically, it has come to our attention that some dealerships have attempted to demand money above and beyond the reservation amounts set in GM’s program rules and/or have requested customers to pay sums far in excess of MSRP in order to purchase or lease a vehicle … GM will be forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity that customers expect from the Chevrolet, Buick, GMC, and Cadillac brands.”

A GM spokesperson confirmed the letter to ABC News, adding, “We want every customer to have a great experience. The majority of our dealers know this; however, we want everyone on the same page.”

In a tersely worded memo, Ford instructed dealers not to raise the price of its new F-150 Lightning electric truck nor demand that customers already on the reservation list make additional deposits or payments.

“It has come to our attention that a limited number of dealerships are interacting with customers in a manner that is negatively impacting customer satisfaction and damaging to the Ford Motor Company brand and Dealer Body reputation,” the memo stated.

A Ford spokesperson told ABC News in response to the memo: “The all-new F-150 Lightning represents a leap ahead in innovation for Ford trucks and is critical to the Ford brand and our dealerships as we move into a segment we’ve never competed. We are competing with others who have a direct model and we need to be very mindful of how customers perceive Ford and our dealer network. How our dealers treat customers has major implications not only on an individual dealer but the reputation of Ford and our dealers as a whole. We want to show customers how our Ford dealer network provides a better experience than anyone out there.”

Automakers displeased with excessive markups could penalize wayward dealers in the future with fewer allocations.

“Markups can sour the relationship with the customer,” Caldwell said.

Even the unloved compact car has seen its price skyrocket as consumers frantically snap up SUVs. Drivers who may have shunned sedans before are willing to buy any vehicle at this point, Jominy pointed out.

“We’re seeing very limited inventories and high prices in this market for the foreseeable future,” he said.

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(NEW YORK) — Prices have continued to climb from the grocery store to the gas station amid the pandemic. According to a new report, the prices of some foods and household staples are heading higher.

Kraft Heinz alerted customers that its prices will go up in March on dozens of popular products including certain SKUs of Velveeta cheese by 6.6%, hot dogs and cold cuts by 10% and Oscar Mayer turkey bacon by 30%.

Even coffee is affected — Kraft Heinz’s Maxwell House coffee price would go up by 5%, the company said.

Prices have risen steadily across the food industry, with unprecedented ingredient, labor and transportation shortages coupled with surging demand driving prices higher.

Kraft Heinz said the price increases are not a sweeping action across all its products and instead applies specifically to products experiencing the greatest cost pressures.

Officials at the Federal Reserve on Wednesday signaled they are on the verge of addressing this issue of soaring prices by potentially hiking interest rates very “soon.”

“With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Fed said in a statement Wednesday.

Federal Reserve Chair Jerome Powell said that “inflation remains well above our longer run goal of 2%,” which it notably has for some time now. He attributed this largely to supply and demand imbalances related to the pandemic and the reopening of the economy.

ABC News’ Catherine Thorbecke contributed to this report.

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(NEW YORK) — After 139 child deaths since 2010, new safety standards for crib mattresses will go into effect this fall.

The Consumer Product Safety Commission approved a new rule Wednesday to address potential hazards like lacerations, suffocation and entrapment.

“This is intended to reduce the risk of injury,” CPSC spokesperson Jason Levine told ABC News. “The crib is the safest place for your infant, yet what this does is it takes another step in the right direction in terms of ensuring that the mattress itself is as safe as can be.”

New mattresses will be required to comply with the standard this fall, Levine said. The rule covers crib mattresses as well as mattresses in play yards and bassinets.

“Today’s vote means crib mattresses of all sizes will be required to meet safety standards,” CPSC Chair Alex Hoehn-Saric said in a statement. “This will improve safety for babies sleeping in cribs and play yards.”

CPSC said it was aware of at least 494 incidents, including 139 fatalities and 355 nonfatal incidents, related to crib mattresses between January 2010 and April 2021.

Just last week, the CPSC also warned consumers about certain Leachco Podster infant loungers after two children died “due to a change in position” that obstructed the infants’ nose and mouth.

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(FAYETTEVILLE, Ga.) — When Jilea Hemmings’ oldest son was diagnosed with autism, she and her husband, Jamie, started experimenting with food that seemed to help improve their child’s performance.

The Georgia couple used plant-based substitutes to create their son’s favorite dishes, including mac and cheese and spaghetti and meatballs.

Soon, they began selling their products at a farmers’ market, and their customers asked if the food was sold in grocery stores, too.

“From there, the rest is history,” Hemmings told ABC News.

The couple just opened Nourish + Bloom Market in Fayetteville, Georgia, believed to be the first Black-owned autonomous grocery store in the nation. Hemmings said their mantra is “real food and real products for real people.”

After moving from Chicago to Fayetteville, the Hemmings family said they realized they were in a food desert — an area where there is limited access to affordable and nutritious food — and decided to use their prior food and technology knowledge to open a market of their own.

Nourish + Bloom Market features a “frictionless shopping” experience where customers can walk in, grab what they need and leave without waiting in line or stopping to scan and pay.

Hemmings has a background in technology and software building, and to bring her and her husband’s vision to life, the market partnered with different companies such as Microsoft, USC Technologies, Nova Dynamics and Intel.

Although the store is fully autonomous, the owners still wanted the store “to feel warm” by having employees that assist customers throughout the market.

“People think that autonomous means that you’re taking jobs away,” Hemmings said. “It actually is not. We are changing the way their jobs are done.”

They also have delivery robots, named Nourish and Bloom, to deliver products in temperature-controlled compartments. With autonomous shopping, vending and robotic delivery, the market can offer 24/7 access to real food and environmentally friendly products.

“The community response has been overwhelming,” Hemmings said. “They are just so proud to see a Black family doing this, and then also to experience the technology, people have been very excited about that.”

The couple plans to franchise Nourish + Bloom Markets around the country, hoping to reach a goal of 800 stores in total.

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(NEW YORK) — In an increasingly digitized world, almost no industry has been left unscathed by the global shortage of electronic chips.

Demand for these dime-sized building blocks needed to make cars, computers, smartphones and much more was growing even before reaching a fever pitch as the COVID-19 pandemic forced swaths of the globe to rely on tech tools for work or school. The shortage also clobbered the auto industry with disproportionate furor, leading to skyrocketing new and used vehicle prices — which in turn drove one-third of all of the painful inflation Americans saw in 2021, according to the Bureau of Labor Statistics.

The crisis has exposed just how bedeviling the pandemic has been for policymakers and business leaders who failed to foresee the fallout from this shortage coming, as well as exposed the risks for U.S. business that results from a majority of the world’s chip supply being produced in Asia — and more specifically, political tripwire-ridden Taiwan.

“It is both an economic and national security imperative to solve this crisis,” Secretary of Commerce Gina M. Raimondo said in a blogpost Tuesday, sharing fresh data on the fragility of the semiconductor supply chain and calling on Congress to approve $52 billion in chips funding “as soon as possible.”

As the scarcity of semiconductors continues to dominate headlines two years into the pandemic, here is what economists say Americans should know about the chip shortage, and what its implications are for the future.

‘An essential part of almost every product that we use’: What are semiconductors?

“Semiconductors, or chips as we call them, are sort of the building blocks of any computer system,” Morris Cohen, an emeritus professor of Manufacturing and Logistics in the Operations, Information and Decisions Department, at the University of Pennsylvania’s Wharton School, told ABC News.

“There’s been incredible advancements over the years in the capabilities of these chips, in reduction of their size and power requirements,” Cohen added. “And so we see them now embedded everywhere — in your cellphone and your computer, in your home appliances, and in your automobile.”

“These devices are used to monitor performance to control function, to capture data to send instructions and so on,” Cohen added. “They’ve become sort of an essential part of almost every product that we use.”

Awi Federgruen, a professor of management at Columbia Business School, told ABC News that the chip shortage “is being felt in no less than 169 industries.”

As the tech sector continues to expand at a rapid pace and a growing array of tools and gadgets become embedded in Americans’ daily life, an increasing number of products are becoming dependent on chips. The implications of this can be felt by consumers shopping for everything from portable gaming systems to smart kitchen appliances, and many have likely already noticed higher prices or longer wait times when searching for their products.

Meanwhile, a reliance on chips for critical medical devices, military applications, cybersecurity tools and other sectors can carry more serious ramifications for both individuals and governments.

One natural disaster away from hitting American jobs: How severe is the shortage?

The median inventory held by chip consumers (such as automakers or medical device manufacturers) has sunk from a 40-day supply in 2019 to a less than five-day supply in 2021, the Commerce Department said in an industry report released Tuesday.

This means that if a natural disaster, COVID-19 outbreak or political instability disrupts a semiconductor facility abroad for even just a few weeks, it has the potential to shut down a manufacturing facility in the U.S., the agency added, putting American workers at risk.

Moreover, median demand for chips from buyers was as much as 17% higher in 2021 than in 2019, according to the report, and the majority of semiconductor manufacturing facilities are operating at or above 90% utilization — meaning there is limited additional supply to bring online without the expensive and time-consuming process of building new facilities.

The majority of chip factories are currently based in Asia, which houses about 87% of the market share of semiconductor factories (with Taiwan alone accounting for some 63%), separate industry data indicates. The political climate in the region, and tensions between Taiwan and China, has come under renewed scrutiny as the shortage has exposed how much U.S. industry relies on these sources.

“Initially, when you go back to the origins of the industry, the majority of the capacity was in the U.S. and then it shifted outside,” Cohen told ABC News. “Now, there’s a big push to re-shore that manufacturing and bring it back, and it’s not just a business decision, it’s political, it’s a highly politicized decision.”

‘A perfect storm’: What is causing the shortage?

The supply-demand imbalances in the semiconductor industry were already fragile before the pandemic, and the Commerce Department noted in its report that underlying demand for semiconductors was already growing prior to 2020, propelled by industry shifts such as the onset of 5G and electric vehicles. The pandemic then exacerbated the crisis by causing a surge in demand for products that require semiconductors while simultaneously disrupting the supply.

Columbia’s Federgruen said the current shortage is the result of multiple factors creating “a perfect storm.”

Silicon, the raw material used in chips, became harder to come by for producers during the pandemic, according to Federgruen, because it is necessary for vaccine manufacturing.

“In addition, there was the shutdown or temporary shutdown of [semiconductor] manufacturing facilities in the Far East and elsewhere, as a direct result of the of the pandemic,” Federgruen said. “And then there is the fact that on the demand side, in many industries such as the automobile industry, there’s been an unusual ramp-up of the demand.”

“All those factors have come together and compounded upon each other to create a big, big shortage,” Federgruen said.

Why is it hitting the auto industry so hard?

Most Americans by now have heard of the shortage’s impacts on the auto industry, which has been among the most severely hit by the shortage as more cars today are being fuzed with additional electronic systems than in the past, Federgruen told ABC News.

The shortage was compounded in the auto industry because many carmakers initially thought the pandemic would crush demand and planned for this by reducing semiconductor orders. An apparent desire to avoid public transportation and plan getaways closer to home during the health crisis, however, ended up having the opposite effect on demand for autos. Chip manufacturers, already suffering from pandemic-related shocks, could not keep up with the new orders coming in from the auto industry that came as a simultaneous remote-work boom spurred demand for chips needed for computers and IT tools.

Raimondo said that the so-called legacy logic chips used in automobiles — as well as medical devices — are facing the most acute shortages.

“In 2021, auto prices drove one-third of all inflation, primarily because we don’t have enough chips,” Raimando wrote in her blogpost. “Automakers produced nearly 8 million fewer cars last year than expected, which some analysts believe resulted in more than $210 billion in lost revenue.”

Cohen, from the Wharton School, added that over the last decade or so, “the amount of computer systems that are put into a car has just increased enormously.” While carmakers have become big users of chips for managing vehicles’ entertainment, climate, fuel systems and more, they have continued to rely on outsourced production and suppliers for these parts.

Automakers historically did not consider producing chips to be their core competency, but many have come to the realization now that they can’t afford to be dependent on outside suppliers for chips if their absence can bring production and assembly lines to a screeching halt.

Raimondo called new partnerships with semiconductor producers recently announced by Ford and General Motors “encouraging” in her blogpost Tuesday, saying the announcements “demonstrate that chip consumers and producers are coming together to solve their supply chain issues.”

What is being done to address the shortage, and how long will it last?

The Commerce Department’s report said that industry players do not see the significant, persistent mismatch in the supply and demand for chips going away in the next six months.

The report identified the main issue as the need for additional semiconductor factories (also called semiconductor fabrication plants or fabs). Construction of new fabs, however, is expensive and can take years before making an impact in the supply.

In addition to the steps taken by players in the auto industry such as Ford and GM, some companies have also announced new and dramatic actions to ameliorate the crisis and bring semiconductor manufacturing back to the U.S.

Intel announced late last week that it was investing more than $20 billion to build two new chip factories in Ohio — a headline-grabbing announcement that came on the heels of the firm saying last October that it had began construction on two chip factories in Arizona. Samsung similarly announced plans late last year to build a $17 billion semiconductor factory near Austin, Texas.

“It’s great that they’re doing that but it’s not going to solve today’s problems, that’s for sure,” Cohen told ABC News of the recent announcements. “It’ll take years for this to take place, and in the interim, we’re still going to have to source these products from the places they come from now. We don’t have an alternative.”

The situation may improve slightly if demand cools off, Federgruen noted, but similarly said that it will take years for the “big change” to occur when these new U.S. facilities begin actually pumping out chips.

Why should Americans care and what does this mean looking ahead?

Cohen said that having studied the industry for a long time, a lot of what we’re seeing now could have been anticipated to some degree, especially among industry players.

“Companies who operate in this environment have been aware of these issues for a long time and have dealt with it,” he said. “This is just the nature of being competitive in those industries.”

If a new fab costs billions of dollars and takes years to construct, companies in an increasingly globalized world will likely turn to offshore suppliers for chips instead. Cohen said the pandemic, however, has made Americans more aware of risks and fragility of this dependence on outside suppliers.

“Most consumers didn’t know and didn’t care where their chips came from: ‘You turn the car on, it should go, I don’t really care who made the chip and what country it was built in,'” Cohen said. “But now, all of a sudden, these issues become really important, and so I think we become more sensitized to how dependent we are, how interdependent we are, how things can be disrupted.”

“We became a globalized economy because there were a lot of advantages,” Cohen added. “Because of that, we as consumers have enjoyed access to an amazing array of products and incredibly low prices, which has increased our standard of living.”

With chip supply now just one natural disaster or major disruption away from potentially impacting American livelihoods, Cohen predicts it is “going to be difficult to maintain the status quo.”

“We will have more expensive products, we’ll have things that will take longer,” he said. “Therefore, our standard of living to some extent will be lower. It’ll cost us more time and money to earn what it takes to buy a car, to buy a house.”

Federgruen added that he hopes policymakers and business leaders can learn from the lessons exposed by the crisis and make better decisions moving forward that don’t just take into account short-term profits.

“In general, there’s been the recognition that we need to make our supply chains much more resilient, and that we need to build in safety buffers on the supply side for situations like this,” Federgruen told ABC News. “That lesson comes up with every crisis and is then forgotten, unfortunately, but hopefully it will stick now.”

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(PITTSBURGH) — A once-dormant power plant is humming with activity outside Pittsburgh as thousands of miners work 24 hours a day.

The miners at this site aren’t people, but supercomputers running complex math equations. The first to solve the equation is rewarded with the digital financial token known as bitcoin.

But the large amount of power needed to run these computers has re-ignited a debate in Pennsylvania and around the country about the potential climate consequences of cryptocurrency.

Bitcoin is a type of digital money not regulated by any company or government. It can be exchanged online between people anywhere in the world without going through a bank. While coins like quarters or pennies are physically minted — bitcoin is minted as a virtual token by computers, through a process called “mining.”

Some investors see bitcoin as the currency of the future. The value of one bitcoin has skyrocketed from around $10,000 two years ago to more than $33,000 as of this publishing.

Jeff Campbell, who oversees the bitcoin mining operation at the Scrubgrass Power Plant in Kennerdell, Pennsylvania, said each of their computers generates an average of $30 a day mining bitcoin.

“These are computers that are just designed to do one thing. They’re designed to run as fast as possible 24 hours a day,” he told ABC News Live.

The computers in a bitcoin mining operation need a lot of power both to run and to operate fans that stop them from overheating. By one estimate from the Cambridge Center for Alternative Finance, annual global bitcoin mining uses more electricity than the entire nation of The Netherlands.

Climate activists question whether the growth of cryptocurrency mining operations could generate more carbon emissions and create a new market for fossil fuels at a time when the world is trying to reduce energy use and cut carbon emissions as fast as possible.

Under fire for their emissions and reliance on fuels like coal and natural gas, some bitcoin mining companies in the U.S. are transitioning to more renewable types of power like solar or wind.

Stronghold Digital Mining, which owns the Scrubgrass plant, has found its power source in the form of coal waste, which is abundant at this 221-acre pit just outside of Pittsburgh. Coal waste is a combination of rock, coal, and other materials that were deemed unsuitable for burning and left abandoned since the 1970s when coal mines in the area were closed.

There are 220 million cubic yards of waste coal pits like the one in Russellton across 9,000 acres in Pennsylvania, according to testimony from Pennsylvania Department of Environmental Protection Director Patrick McDonnell. The agency says the pits cause environmental problems like leaching acid into nearby rivers and streams. There are also 40 continual fires in waste coal pits across the state that can release carbon dioxide and other pollutants as they burn, according to a document from a waste coal industry group.

The entrepreneur behind Stronghold, Bill Spence, said that while burning waste coal isn’t the cheapest form of energy, the bitcoin operation keeps the plant viable through its constant demand for power. This helps achieve his goal of reducing the toxic waste piles across the state, Spence said.

“What cryptocurrency and bitcoin has done for us is, it’s enabled us to sustain the work that this power plant does as an environmental plant cleaning up the waste coal, the remnants of the mining industry here in the state of Pennsylvania,” he told ABC.

The Pennsylvania Department of Environmental Protection says the state has benefited from waste coal power plants because the state has limited funding to clean up the piles and address the environmental problems.

“Waste coal-fired units burn waste coal to generate electricity thereby reducing the size, number and impacts of these piles otherwise abandoned and allowed to mobilize and negatively impact air and water quality in Pennsylvania,” Press Secretary Jamar Thrasher said in an emailed statement.

Pennsylvania provides up to $20 million a year in subsidies to waste coal power plants and Thrasher said the state includes their CO2 emissions in the state’s carbon budget in an effort to help them compete with cheaper forms of energy like natural gas.

Waste coal is burned using a different process than traditional coal but still releases carbon dioxide that contributes to warming the atmosphere. The EPA says the type of waste coal found in Pennsylvania also releases more acid gas and sulfur dioxide than other types of coal.

Stronghold says they have put technology in place to capture pollutants like sulfur dioxide or methane emissions from their plant, but according to publicly available data they still released about 365,000 metric tons of carbon dioxide in 2019 — the equivalent of about 80,000 cars on the road for a year, according to an EPA emissions calculator. The facility also released more than 1,000 metric tons of methane, a potent greenhouse gas, and nitrogen oxides, or NOx, that contribute to air pollution

Rob Altenburg, director of the environmental nonprofit Penn Future, said bitcoin is “wasteful by design” and that there are better alternatives for generating that power than burning waste coal.

“They’re not removing pollution. They’re moving pollution. They’re moving pollution from the land and they’re moving it to the air,” Altenburg told ABC News.

And because waste coal contains less coal than what would typically be used to generate energy, more of it needs to be burned to create the same amount of power which could generate more CO2 emissions and air pollution.

“The dirtiest source of power we have in the state should be your last choice for you for generating that electricity,” he said.

Altenburg said that instead of burning waste coal, the state and federal government should provide more funding to move the material to lined landfills where it can no longer contaminate the soil or water.

The federal infrastructure bill has allocated $11 billion toward abandoned mine cleanups, some of which could be used to clean up waste coal in Pennsylvania.

Spence acknowledges that Stronghold’s operation generates carbon dioxide and that their operation isn’t perfect, but they’re trying to improve further by testing technology to capture the carbon they emit. And he said the bitcoin operation is helping fund his efforts to use up the waste coal which otherwise won’t go anywhere on its own.

“I don’t think we should stop what we’re doing in order to get the perfect,” Spence told ABC.

“Let’s evolve into perfect.”

ABC News’ Seiji Yamashita contributed to this report.

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