CORPS Profit on GW
==
4/15 wider category disaster capitalism
==
---
Congress, Trump Exploit Fire Tragedy to Promote Logging Agenda
By Chad Hanson
In the wake of the October 2017 fires in Northern California, which resulted in the loss of so many lives and homes, people affected by the tragedy are grieving and bewildered. Many people are searching for answers about what caused the fires, and a way forward to prevent similar loss of life and property.
It's frustrating, then, to watch Republican leaders in Congress and the Trump administration politicizing the recent tragedy as they push for a sweeping elimination of environmental laws on our national forests and other federal public lands to increase logging and backcountry fire suppression under the guise of community protection. On Nov. 1, the House voted 232-188 to allow for more "salvage logging" and other forms of tree-cutting on federal properties. According to the Associated Press, House Speaker Paul Ryan said the bill was needed to protect the nation's federal forests "from the kind of devastation that California experienced."
Wrong. Even a cursory examination of the science of forest ecology reveals that this plan would not only destroy vast acreages of public forests, but would also put communities at even greater risk.
The fires that occurred last month in California were in low-elevation foothill ecosystems dominated by oak woodlands and grasslands. The fires were far away from any national forests or other federal public lands. Eviscerating environmental laws on federal forestlands would do nothing whatsoever to help the affected communities now or in the future. Instead, what the tens of millions of Americans living in rural communities within fire-adapted ecosystems really need is for federal and state lawmakers to focus on directly protecting homes and lives from wildland fire.
The science is clear on how best to do this, and it involves a few basic steps. Most important, we need to help homeowners make their homes far more fire-safe. This includes measures such as using fire-resistant roofing and siding, installing rain gutter guards (to prevent flaming embers from landing in a dry bed of pine needles and leaves accumulating in rain gutters); using a fine-wire mesh on exterior vents to prevent embers from floating into interior spaces like attics; and replacing wood decks with fire-resistant composites. Homeowners also need assistance to create "defensible space" within 60 to 100 feet around their homes, which involves removing most small trees and shrubs, removing lower limbs on mature trees, and annually raking up and removing small twigs, needles and leaves from the ground. (Clearing vegetation away from larger distances from homes offers no added benefit for home protection, research shows.)
Further, we need to create an infrastructure to notify communities when wildland fires occur so that people and their animals can evacuate quickly. When these steps are properly implemented, the vast majority of homes can and do survive wildland fire, and lives are saved. Finally, we must focus wildland fire suppression and management activities around homes and communities, rather than in backcountry forests.
But the current leadership in Congress appears more interested in trying to find some kind of cover for allowing for increased logging. The recently passed bill—deceptively named the Resilient Federal Forests Act of 2017, and which was sponsored by one of the biggest recipients of logging-industry campaign contributions in Congress, Bruce Westerman, an Arkansas Republican—would divert more resources away from protecting communities in order to give a windfall to logging corporations.
If the Senate passes this bill and it becomes law, the legislation would eliminate most logging regulations in national forests, and severely curtail public participation in federal forest management decisions, allowing clearcuts thousands of acres in size. What's more, the bill would prohibit federal judges from issuing temporary restraining orders or preliminary injunctions against illegal logging projects on our public lands, which means giant logging projects would be completed before any judge could enforce existing laws.
Unfortunately, Senate passage could happen. Senator John Barrasso (R-WY) has introduced S. 2068, the so-called Wildfire Prevention and Mitigation Act. Similar to HR 2936, this bill would exempt massive logging projects from environmental laws and public participation on our national forests, and would prevent federal judges from being able to enforce environmental laws. Barrasso issued a statement misleadingly claiming that this massive rollback of environmental protections was needed to "remove excess brush" from federal forests.
Environmental leaders in Congress, including Representative Raúl Grijalva (D-AZ) who is the Ranking Member on the House Natural Resources Committee, are calling HR 2936 a shameful "giveaway" to the logging industry. "The Americans across the West whose homes burned to the ground this year aren't interested in whether Congress can make timber companies a few extra bucks," Grijalva said.
These logging bills represent both an attack on our public lands and an assault on science. Both pieces of legislation are predicated on a political tale known as the "catastrophic wildfire" narrative, which is a classic example of the politics of fear. The basic premise of this narrative is that wildland fires are "destroying" our forests—and that more intensive and widespread logging will "save" them. But the notion that fire "destroys" forests has been refuted by hundreds of scientists and peer-reviewed scientific studies. The current science tells us, for instance, that even in the same forest types, the forests with the fewest environmental protections and the most logging burn more intensely, not less.
There is now a broad consensus among forest scientists that we have considerably less fire in our forests today compared to the natural levels that occurred prior to fire-suppression policies. And, though it may seem counterintuitive, hundreds of scientific studies have concluded that, in the patches where forest fires burn more intensely and kill most of the trees, the resultant "snag forest habitat" is actually some of the best and most important wildlife habitat in the western U.S.—comparable to old-growth forest in terms of native biodiversity and wildlife abundance.
We also need our public forests to help mitigate climate change, since protected forests absorb huge amounts of carbon dioxide from the atmosphere and store it in growing trees and shrubs. In fact, if we protected our national forests from logging, it would be like taking 13 to 24 million cars off the road.
But the Trump administration and its allies in Congress don't really care about science. They live in a world of "alternative facts" in which clearcuts the size of cities are promoted as fire management, ecological restoration, and climate-resilience measures. Their proposed solution to the risks of wildfire is to destroy the forest in order to save it.
Reposted with permission from our media associate SIERRA magazine.
==
==
http://www.alternet.org/news-amp-politics/delta-price-gouging-hurricane-irma
==
yikes, amplifying feedback
http://www.alternet.org/environment/tanker-crosses-arctic-without-icebreaker-first-time-due-melting-sea-ice
=
==
8/16 update inequality charters
http://www.alternet.org/civil-liberties/katrina-pain-index-2016-numbers-race-and-class-gap-widening
3.Ninety-three percent of New Orleans’ 48,000 public school students are in charter schools, the highest percentage in the U.S. Before Katrina, there wereover 65,000 students enrolled in New Orleans public schools, less than 1 percent in charter schools. There are now 44 governing bodies for public schools in New Orleans. There are seven types of charter schools in Louisiana. The public schools are 87 percent African American. Widespread charter school problems for students with disabilities are getting a little bit better according to a federal court monitor report. The public has very mixed feelings about the system reflected in the most recent poll, which shows 43 percent of whites think the schools are getting better, compared to 31 percent of African Americans; while 23 percent of African Americans thought schools were getting worse, in contrast to 15 percent of whites.
2,000. Black median income in New Orleans rose from $23,000 in 2005 to $25,000 eight years later, while white median income rose by $11,000 from $49,000 to $60,000 during the same time.
==
---
http://www.alternet.org/environment/9-industries-are-cashing-our-planet-heats
9 Industries That Are Cashing In as Our Planet Heats Up
By Larry Schwartz [1] / AlterNet [2]
August 7, 2015
Despite the fact that 98% of climatologists accept manmade climate change as a fact, almost a quarter of Americans [3] still believe that climate science is junk science and that global warming is a grand hoax. Major oil companies have poured a lot of money into fueling climate skepticism. But while Big Oil wants to keep the public fooled, the major players in the industry, like Exxon and Shell, know better. They also stand to profit handsomely from a hotter planet. And they are not the only ones. Manmade climate change, caused by the burning of fossil fuels and the resulting widespread emission of CO2 into the atmosphere, may be a catastrophe for most humans and non-human species, but for a select group of industries, global warming represents just another opportunity to make money.
Here are nine industries that will profit at the expense of the planet.
1. Big Oil
Its website pretty much says it all: "ExxonMobil believes that it is prudent to develop and implement strategies that address the risks to society associated with increasing [greenhouse gas] emissions." That doesn’t exactly sound like a company denying the fact of climate change. Similarly, Shell Oil, as far back as the 1980s, began planning for the end of the fossil fuel era. “It seemed inevitable that we would decarbonize for many reasons, climate among them,” said Peter Schwartz, who was head futurist at Shell at the time. In 1998, after an in-house study, Shell actually set a goal to reduce its greenhouse gas emissions by 10% within four years. Ten years later it even advocated a carbon tax rather than a cap-and-trade strategy, which it deemed more damaging to company profits.
Now the warmer world has presented Big Oil with new ways to make more money. Exxon has partnered with Russia to look for more places to drill for oil in the Arctic seas. With the sea ice rapidly melting, summers are getting longer and it is easier to search for more fossil fuel in the formerly frozen wastelands. Shell has dumped over $6 billion so far into Arctic drilling. With roughly 27 billion barrels of oil suddenly more accessible, Big Oil stands to profit from the hotter world it helped create. “I will be one of those persons most cheering for an endless summer in Alaska,” a former Shell executive once said at a trade conference.
2. Biotech
One species that won’t mind a warmer planet is the mosquito. Ideally suited to sultry conditions, the mosquito and the diseases it carries will proliferate in the coming decades. Already, in the Florida Keys, we are seeing an increasing number of tropical diseases like Dengue fever, which kills tens of thousands of people worldwide every year, and chikungunya, a virus causing high fever and joint pain. Biotech companies like the English firm Oxitec, and eco-capitalist Jason Drew, who has invested $30 million in the firm, are hoping to cash in on the climate-caused crisis. Oxitec has invented a genetically modified male mosquito that sires baby mosquitos that require certain nutrients that are unavailable in the wild, resulting in the death of the young mosquitos. While the goal, to eliminate or at least severely cut down the number of mosquitos, is laudable, the method is not popular among many activists, who fear the unintended consequences of releasing millions of genetically altered Franken-squitos.
3. Flood Control
For years climate scientists have been warning about rising sea levels and the threat to coastal cities, mostly to deaf ears. Hurricanes Katrina and Sandy changed all that. Katrina submerged 80% of New Orleans under as much as 20 feet of water. Sandy flooded whole neighborhoods in New York, not to mention the subway tunnels. The weather catastrophes cost billions of dollars and in many ways the affected cities have still not fully recovered, even years later. Enter the “climate change adaptation” industry, including companies like Flood Control America, which constructs invisible steel walls cities can quickly throw up at the threat of major storms. "There is simply too much money invested in coastal real estate — commercial, municipal and residential — to abandon properties to rising sea levels," Bryan Fryklund, an executive at FCA told the theverge.com. FCA has constructed floodwall barriers around communications giant Verizon’s headquarters and Bellevue Hospital in New York, and at New Jersey’s Port Authority.
Flood disaster planning is currently almost a billon-dollar industry and is expected to double by 2020. "The question isn’t whether this industry is going to explode, but by how much," Grant Ferrier, the founder of the marketing firm Environmental Business International, told theverge.com. Meanwhile, Dutch companies like Dutch Docklands, located in a country below sea level and experts at keeping the ocean at bay, are happy to share their expertise — for a price.
4. Air Conditioning
It stands to reason that as the Earth gets hotter, human beings will strive to cool off. The winner in that scenario is the air-conditioning industry and companies like Daikin Industries, which makes energy-efficient air conditoners. In many areas of the country, like Northern California, air conditioning has been relatively unneeded. Not so on a CO2-warmed planet. As the temperature rises in formerly comfortably cool parts of the country, the A/C industry will profit big time.
5. Big Agriculture
Monsanto is a hated name among most environmentalists, but that has never stopped it from making oodles of money, and neither will climate change. Drought is just another word for opportunity for this agribusiness giant. As one of the leaders in the controversial genetically modified organism industry, Monsanto is hard at work developing GMO crop seeds that are drought resistant. Despite the fact that conventional methods have yielded seeds that are as or more resistant to drought as the GMO variety, Monsanto stands to market its products to Africa and other drought-prone markets at a tidy profit. As climate change progresses, the agriculture colossus will no doubt happily adapt to the hotter, drier world.
6. Wall Street
Good times, bad times, it matters not to Wall Street, which is always adaptable enough to figure out new ways to make money off of virtually anything. Wall Street firms like KKR invest in hedge funds that trade in weather derivatives, betting for and against weather disasters. Other firms are buying water rights, in anticipation of worldwide shortages, and water plants. Some like, Goldman Sachs and Morgan Stanley, are advising rich clients to buy farmland, betting that a hotter world will need reliable food production.
7. Shipping
Huge shipping firms like Beluga and Nordic Bulk Carriers traditionally have had to traverse the Suez Canal or other longer routes in order to deliver goods. The Northeast Passage was not a shipping lane option due to the arctic ice. Thanks to global warming, however, what was formerly a route that could only be used with an icebreaker plowing the path for the cargo ship, has become open seas with a few easily avoided ice floes. No icebreaker needed. At a savings of $300,000 per ship, Beluga increased revenue by half a million dollars in just one year.
8. Desalination
Where some people see disaster, entrepreneurs see opportunity. Such is the case with Israel Desalination Enterprises. Watching the trends at ski resorts worldwide and seeing the increasing temperatures and decreasing amount of natural snow, IDE swooped in, and using its reverse-osmosis methods that allow snowmaking in warm weather, has kept skiers swooshing down the slopes. IDE also makes desalination plants that turn salt water into drinking water, a necessity that some cities, like Santa Barbara, Calif., are already considering in the increasingly dry world.
9. Mining
In 2012, 97% of the ice cover in Greenland melted during the summer months — the first time in 123 years. That was ominous news for climate scientists and the world in general, but sweet opportunity for mining companies, which now had the chance to dig in formerly ice-coated areas of the Arctic for rich mineral resources like zinc, iron ore, uranium, copper, and gold. Despite environmental concerns about mining and the resulting pollution, Greenland has opened the gates to mining concerns in order to employ its people. Meanwhile, Alcoa, the giant aluminum company, hopes to build a huge aluminum smelter there, powered by all that flowing melting water.
Larry Schwartz is a Brooklyn-based freelance writer with a focus on health, science and American history.
---
www.amazon.com › ... › Green Business
-
ast month, Iwrote about global warming in the context of investment opportunities. As part of that discussion, I mentioned McKenzie Funk’s new book, ``Windfall: The Booming Business of Global Warming.'' I thought framing the financial opportunities of this might bypass the usual agnotology and political foolishness. To quote:
``This debate is no longer about whether global warming is real (it is) or whether humans are the most likely cause (you are), but rather, some very interesting and different questions that might be more professionally relevant to finance: How is this going to affect business? What are the investing consequences? Who will be the financial winners and losers of climate change?''
The organized response from climate trolls -- more than 2,000 comments in a 24-hour period is the result of a specific, directed effort, and not remotely organic -- made me even more curious about the book. So ``Windfall'' went with me on vacation.
The short version: Change and confusion equals opportunity. This is a hugely entertaining book that follows the money related to anthropogenic global warming. This narrative travels the world looking at where investors and financiers are already putting cash to work. There already are enormous investment funds set up to participate, whether from giants like Deutsche Bank or from smaller individual hedge funds and private-equity shops.
The longer version: Where is the money going? Follow the cash as Funk deftly explores three themes: What is wet is getting wetter, what’s dry is getting drier, both of which are leading to a massive land grab. Farm land, oil and mineral exploration rights, timber and water are the commodities of the future. Fights will break out over ownership of the Arctic by the five nations that border it. Transportation changes and massive geo-engineering projects all get their due. It is a fascinating and wide-ranging discussion, never drifting too far from the financial repercussions.
A huge wave of innovation has already begun. Desalination plants from Israel, along with snow-making equipment from the same company. Genetically modified salt-resistant crops. The spread of Dengue fever north as the mosquito’s range increases and moves north. Low-lying land management, locks, and canals. Water shortages, water deluges and a desertification. Funk takes the reader on a fascinating world tour where the debate over the effects of global warming has ended, and the search for investment opportunities have begun.
The book is filled with surprises, but two things stood out from the rest, both with significant strategic implications:
The first is that more than a billion people now live in areas that will become uninhabitable. This is creating enormous tensions along borders. India is building a wall around Bangladesh to keep out refugees fleeing floods. Something similar is occurring in the Mediterranean Sea, as Europeans try to keep out an endless flotilla of boat people seeking to escape North Africa’s expanding deserts.
The second is -- as is the case with all major changes -- there will be winners and losers. The winners are going to be the wealthier, mostly northern countries; the losers are going to be the poorer, southern nations, as well as the island nations and archipelagos that will eventually be swamped. Russia, Canada, and Greenland are not only unafraid of climate change, they welcome it. They are among those that will profit from longer growing seasons, greater land areas to explore for minerals and oil, and easier passage through the Arctic.
Two-thirds of the Netherlands's population lives on land that is below sea level; the same land generates 70 percent of the country's gross domestic product. The Dutch have become experts at fighting the onslaught of the sea, and will happily share their expertise with you. For a mere $8 billion dollars, they will protect the trillion dollars in Manhattan real estate from the ravages of the next Hurricane Sandy.
But that water has to go somewhere, be it Staten Island or Brooklyn. Therein lies the rub of the book. There will be winners and losers, if only judged by who can afford to protect themselves from the ravages of the climate of the future.
We are living in the Anthropecene era -- a geologic period defined by how human activities are altering Earth's ecosystems. If you are looking for a deeply felt political or scientific discussion about global warming, this book isn’t it. It is instead about the financial reverberations that are already in evidence. There are macro opportunities galore, the likes of which many readers of this book will begin thinking about in earnest after reading it.
The closest parallel I can think of is that while 15th- century clerics insisted that the world was flat, savvy venture capitalists were investing in Christopher Columbus's Round-Earth startup.
Others will rail against the concept, blame sunspots for climate change, falsely claim the globe is cooling, and offer up other flat-earth arguments. I could direct you to Grist’s column on ``How to Talk to a Climate Skeptic: Responses to the Most Common Skeptical Arguments on Global Warming,'' but really, why bother? Thank goodness they exist -- someone has to be on the losing side of the trade, and it might as well be the flat earthers. If you want to know who these folks are, just have a look at the comment stream in theprior article on this subject. Or give this review a day or two to circulate; the climate trolls are likely to weigh in.
To the rest of you, I recommend this fascinating and entertaining read. You might even find an investment idea or two.
==
Investors Seek Ways to Profit From Global Warming
ByMatthew Campbell and Chris V. Nicholson on March 07, 2013
http://www.businessweek.com/articles/2013-03-07/investors-seek-ways-to-profit-from-global-warming
Investing in climate change used to mean putting money into efforts to stop global warming. Morgan Stanley (MS), Goldman Sachs (GS), and other firms took stakes in wind farms and tidal-energy projects, and set up carbon-trading desks. The appeal of cleantech has dimmed as efforts to curb greenhouse gas emissions have faltered: Venture capital and private equity investments fell 34 percent last year, to $5.8 billion, according to Bloomberg
New Energy Finance.
Now some investors are taking another approach. Working under the assumption that climate change is inevitable, they’re investing in businesses that will profit as the planet gets hotter. (The World Bank says the earth could warm by 4C by the end of the century.) Their strategies include buying water treatment companies, brokering deals for Australian farmland, and backing a startup that has engineered a mosquito to fight dengue, a disease that’s spreading as the mercury climbs.
Derivatives that help companies hedge against abnormal weather and natural catastrophes are drawing increased interest from some big players. In January, KKR (KKR)bought a 25 percent stake in Nephila Capital, an $8 billion Bermuda hedge fund that trades in weather derivatives. (The firm is named after a spider that, according to local folklore, can predict hurricanes.) “Climate risk is something people are paying more and more attention to,” says Barney Schauble, managing partner at Nephila Advisors, the firm’s U.S. arm. “More volatile weather creates more risk and more appetite to protect against that risk.”
---
==
http://www.huffingtonpost.com/2013/08/19/companies-profiting-off-global-warming_n_3756346.html
ome agribusinesseslike Monsanto predict they'll likely make money off climate change. That's because they manufacture genetically modified organisms -- acontroversial technology that creates crops which can grow in un-ideal conditions like droughts. Other, companiesthat will make a buck off climate change in similar waysinclude Bayer and chemical company BASF, according to Wired.
They're creating solutions to mitigate the cost of climate change.
utomakers producing hybrid cars like Ford, Honda and General Motors couldbe poised to cash in if a pinched oil supply pushes gas prices up, according to a 2007 USA Today report citing Wall Street analyses. In addition, Toyota officials have noted on earnings calls that concerns over global warming help boost the companybecause it's known for its fuel efficient and hybrid models like the Prius.
Other companies have found different ways to profit off making our doomed future a little bit better for everyone. Take Daikin Industries, a maker of energy efficient air conditioners or Rayonier, a timber supplier looking for ways to produce timber that don't release carbon dioxide into the atmosphere. Those companies have a successful future in our new world, Nicolas Huber, the head of a fund that invests in companies poised to thrive in a hotter environment, told US News in 2008.
They're inventing Wall Street-type tools to profit off commodities that could soon be in short supply.
Private equity firm KKR -- perhaps best-known for recently landing disgraced General David Petraeus (pictured above) as an employee -- bought a 25 percent stake in Nephila Capital a Bermuda hedge fund that trades weather derivatives, according to Businessweek. Other firms like Water Asset Management, which buys water rights and invests in water treatment plants, and Land Commodities, which advises wealthy clients on investing in Australian farm that they say will become more valuable as temperatures rise, use similar tactics to profit off global warming.
They take advantage of faster shipping routes made available thanks to melted glaciers.
Danish shipping company Nordic Bulk Carriers claimed it's saved one-third of its typical shipping costs thanks to melting glaciers in the Arctic that afforded them a new pathway to China, according to the Guardian. German-based Beluga Shippinghas adopted similar tactics to save money in a new climate, Wired reports.
They're producing alternative energy sources like ethanol.
ompanies that make ethanol, a controversial fuel made from corn touted as a way to counter global warming, stand to profit if there's a rush to adopt biofuel alternatives as alarm increases over fossil fuel. Even the Koch Brothers, who are well-known for funding climate change deniers, have some skin in the ethanol game, through their subsidiaries Flint Hill Renewables and Koch Supply & Trading, according to Forbes.
==
somewhat misfield?
The unexpected furor and back-pedaling over Indiana’s anti-gay “religious freedom” law has already highlighted a problem for the entire 2016 GOP field of hopefuls. Right-wing assumptions turned out to be woefully out of line with emerging changes in social attitudes, and establishment politicians were caught completely off-guard. But what if there’s even more of that to come on a very different subject—climate change?
The process may not ripen fast enough to affect the 2016 election, but a wide range of recent developments are altering the policy landscape around climate change—everything from falling profits [2] (even outright losses) in the fossil fuel industry to falling costs [3] and booming investments [4] in renewables. There’s the growing salience of extreme weather climate-change [5] impacts on people’s everyday lives, from Hurricane Sandy [6] to California’s record-breaking drought [7], and a rapidly-growing climate divestment movement. [8]
There’s even a fierce battle brewing in Florida [9] between the Koch brothers and a free market Tea Party group pushing for solar power—a clear sign that, as with gay marriage, there is no longer just one single monolithic conservative position.
This ongoing shift is far from a done deal, and there’s still plenty of confusion and denial out there, reflected in a recent Media Matters report [10] that most major media ignore global warming’s role in recent severe winter snowstorms [11], but the trends are more in synch than not, and as with the unexpected Indiana RFRA firestorm, the cumulative impact of those multiple trends has the potential to surprise. Considering how depressing the decades-long gridlock on climate-change has been, that can only be viewed as a sign of great hope. The long-term climate impacts remain grim, and there are no guarantees here, but there is hope.
Climate Progress blogger Joe Romm recently drew a direct parallel (“Boycotting States: The Future For Climate Activism?” [12]) focusing specifically on the necessity of the state-level struggle. He highlighted Senate majority leader Mitch McConnell’s mendacious threat [13] to the global community, invoking state-level opposition to EPA greenhouse gas regulation—and the key role of casting it as a moral struggle.
“McConnell, the Kochs, and their pro-pollution allies, have taken the climate fight to the states. So the climate community will have to step up its game the way the LGBT community has,” Romm argued.
The LGBT community didn’t win by asking by for people to “accept gay marriage by holding their moral noses,” he pointed out. They won because “they set out to change change people’s minds about what is moral,” and that’s “the lesson that the gay revolution holds for any progressive movement,” particularly the climate action movement to save our planet’s future.
It’s a very important argument, and the profile of the moral dimension is being raised significantly by the divestment movement. But this only highlights part of the rapidly changing dynamics of this struggle.
The first trend is rising problems for the fossil fuel sector, which can be seen on at least three fronts: (a) financial and (b) physical/technological, which are tightly intertwined, and (c) political, where pre-existing problems, both climate-related and otherwise, come to the fore as fossil fuels lose their position of dominance. These problems are most severe for coal, the dirtiest and most deadly of the fossil fuels.
As noted recently in the Economist [14], whole countries are turning against coal, and “producers face prolonged weakness in prices.” More specifically, “The Dow Jones Total Coal Market index has fallen by 76% in the past five years.” It went on say:
High-cost deep mines in the rich world are worst-hit: in America 24 coal companies have gone bust in the past three years, and one-sixth of the remaining capacity loses money. But even Australia, whose low-cost opencast mines play a role akin to Saudi Arabia’s in the oil market, is jittery.
Coal’s problems aren’t just limited to the U.S., so there’s simply no way to spin this as “Obama’s war on coal,” as Republicans are wont to do. This a global problem for a global industry that’s at the heart of causing global probllems for everyone else.
To be more specific: A look at the situation in China—the world’s biggest coal consumer—found multiple indications of declining demand, and increasing pressure to continue cutting back. Meanwhile, in the U.S., “coal now struggles to compete with natural gas, which has fallen by 80% in price since 2008,” while European consumption—which soared after Germany decided to close its nuclear-power plants—is now being eroded by gas and renewables. Worldwide, “two-thirds of coal-fired power plants proposed worldwide since 2010 have been stalled or cancelled,” according to a report from Coalswarm, an environmental think-tank, the Economist‘s story continues, “In 2014 the world added more generation from windpower than coal. Overall, Europe and America have already cut coal-fired generation capacity by over a fifth in a decade. The output of American coal mines dropped to 1993 levels in 2013.” The only remaining global bright spot for the coal industry is India, where consumption isn’t projected to peak until the 2030s. But China’s recent history tends to cast even that in doubt.
Political pressure is another big concern. “Overall, coal kills around 800,000 people a year, most of them poor,” the story notes, adding that “Campaigners reckon 80% of the world’s coal reserves must stay in the ground if the planet is to stand a chance of keeping global warming under 2ºC by 2050.” It then cites the beginnings of a regulatory squeeze in Germany and America, along with the divestment movement, which it notes “is under way in many universities,” before adding, “The World Bank no longer invests in coal-fired plants. Last year Norway’s sovereign-wealth fund dumped its holdings in more than 50 coal companies worldwide.”
Summing up, the Economist concludes:
The biggest danger for the coal miners is that capital ceases to flow their way. Investors can cope with a cyclical business, but the fear now is of a structural shift, in which China follows the rich world in beginning to phase out coal, India increasingly produces its own, and a plentiful supply of cheap gas keeps prices low everywhere. If so, new coal-mining investments would risk becoming stranded assets, and older deep mines would be even more uneconomic than now. Carbon Tracker, a non-profit group, reckons that more than $100 billion-worth of planned capital spending risks being stranded by 2035. A prospect as black as a miner’s lungs.
The Carbon Tracker Initiative [14] describes itself as “a team of financial specialists making climate risk real in today’s financial markets,” adding, “Our research to date on unburnable carbon and stranded assets has started a new debate on how to align the financial system with the energy transition to a low carbon future.” The reference to unburnable carbon highlights a primary problem of fossil fuel industry denial: ignoring the fact that the vast majority of carbon fuel reserves can never be burned, if civilization is to survive. This “unburnable carbon” is a particular example of a broader financial phenomenon, that of “stranded assets,” assets of any form that for whatever reason can no longer be productively employed.
Business concerns about climate change aren’t new. But CTI represents a much more aggressive, pro-active presence making rock-solid business arguments against the fossil fuel status quo. The fact that an organization like CTI even exists is a telling sign of how much things have changed—and how much more they’re likely to change in the years to come.
Despite CTI’s warnings, at first glance, things don’t look nearly as bad for the oil companies. They’re only facing a relatively recent price plunge, for which a number of causes have been blamed. But author Michael T. Klare (Resource Wars, Blood and Oil, The Race for What’s Left [15]) recently honed in on “The Real Reason Behind the Oil Price Collapse,” [16] which he described as “the complete collapse of Big Oil’s production-maximizing business model,” and that’s a very serious matter indeed, which suggests a broad dovetailing with the arguments CTI is making.
As Klare explains, a decade ago, Big Oil faced a world of declining proven reserves, rapid growth in China, India and elsewhere, and growing pressure for alternatives based on concerns over global warming. Their response was a profit-maximizing strategy based on going after hard-to-reach, more expensive reserves (which Klare himself dubbed “tough oil” [17]). The strategy worked wonderfully, as long as the price of oil remained high. “This meant that no fossil fuel reserves, no potential source of supply—no matter how remote or hard to reach, how far offshore or deeply buried, how encased in rock—was deemed untouchable in the mad scramble to increase output and profits.” This is what lead to deepwater drilling, of the kind that BP Deepwater Horizon blow-out made infamous, as well as Canadian tar sands, and Artic oil fields. But as the price plummeted, “the very strategy that had generated record-breaking profits has suddenly become hopelessly dysfunctional.” As Klare explains:
The production-maximizing strategy crafted by O’Reilly and his fellow CEOs rested on three fundamental assumptions: that, year after year, demand would keep climbing; that such rising demand would ensure prices high enough to justify costly investments in unconventional oil; and that concern over climate change would in no significant way alter the equation. Today, none of these assumptions holds true.
Demand is still rising, but not nearly as fast the model expects, and needs it to. Instead of 103.2 million barrels a day in 2015, the level projected a decade ago, consumption is expected to be only “only 93.1 million barrels [18],” Klare notes. “Those 10 million ‘lost’ barrels per day in expected consumption may not seem like a lot, given the total figure, but keep in mind that Big Oil’s multibillion-dollar investments in tough energy were predicated on all that added demand materializing, thereby generating the kind of high prices needed to offset the increasing costs of extraction. With so much anticipated demand vanishing, however, prices were bound to collapse.” Which is why this recent price crash isn’t likely to end any time soon—and why large quantities of “tough oil” will remain untouched. Prices aren’t projected to reach $73 again “until 2020.”
The collapse of their business model comes at a time when pressures to deal with global warming are growing. Despite Big Oil’s massive spending to sow confusion and doubt, “more and more people globally are starting to worry [18] about its effects—extreme weather patterns, extreme storms, extreme drought, rising sea levels and the like—and demanding that governments take action to reduce the magnitude of the threat.”
These policy shifts in turn will further reduce future demand, making it even harder to restore the “tough oil” business model. Government actions may be woefully inadequate compared to the magnitude of the problem geophysicallly, but they can still be sufficient to threaten Big Oil’s agenda “[H]owever inadequate the response to the dangers of climate change thus far, the issue is on the energy map and its influence on policy globally can only increase. Whether Big Oil is ready to admit it or not, alternative energy is now on the planetary agenda and there’s no turning back from that.”
In sharp contrast to the problems facing the fossil fuel industry, most renewables face an increasingly bright future. Moreover, the future is a lot closer at hand than most people realize. Key to understanding what’s afoot is the concept of “grid parity,” [19] the cost point at which renewables can generate power at least as cheaply as buying power from the electric grid.
In Janaury 2014, German investment bank Deutsche Bank’s 2014 Outlook report for the solar industry reported that “Solar is currently competitive without subsidies in at least 19 markets globally and we expect more markets to reach grid parity in 2014 as system prices decline further.” These were mostly country-level markets in a given sector, such as “Germany, Residential,” Germany, Industrial” and “Mexico, Commercial,” but also included “California, Residential.”
Wind power is also advancing rapidly as an option. On a worldwide basis, “onshore wind-generation costs are competitive with those of the fossil-fuel sources,” while in Denmark, where wind is particularly advantageous, wind power could soon be half the cost of fossil fuels.
The smart money is no longer bound up in fossil fuels, and the political divide is no longer sharply drawn between money on one side and saving the planet on the other. Much as unexpected business pressure caught social conservatives in Indiana off-guard with their anti-gay “religious freedom” act, a similarly unexpected shift is already starting to materialize in the energy realm.
In fact, the power of specific leading-edge good examples can only be expected to accelerate the process. For example, on March 23, MSNBC’s Chris Hayes reported that Costa Rica had generated 100% of its electricity for the year so far from renewables–geothermal, hydro, wind, and solar. The country hopes to go completely carbon-neutral by 2021.
In addition to the falling profitability of fossil fuels and the growing momentum of renewables, there’s a third changing business dynamic to consider: The response of the broader business community, which has long suffered from bearing the externalized costs of fossil fuels. Such costs come in a variety of forms, some of which impact other business more obviously than others. These include specialized government treatment (subsidies, tax credits and exemptions, the costs of Middle East military operations) as well as health impacts, and damage due to climate change. Given that most powerful industries benefit from government actions which socialize their costs in various ways, there’s not much appetite for challenging fossil fuels on this ground. Industrial health impacts are similarly uninteresting to most businesses. But the insusance industry directly bears the costs of climate change as they show up in the form of property damage due to increased frequency and severity of extreme weather events, as well as long-term trends such as rising sea levels. And they, in turn, have to manage those costs somehow, which ultimately means that all other businesses must share in paying these externalized costs.
The first to begin noticing and responding to this were large-scale insurance underwriters, known as reinsurance companies, such as Munich Re and Swiss Re. Ross Gelbspan called attention to the rising insurance costs of global warming as far back as his 1997 book, The Heat Is On. Taking note of these costs, reinsurers began the long-term process of integrating them into their business models as best they could, and educating the primary insurers with whom they did business.
It has been a long, slow process, but it’s finally beginning to produce noteworthy results. Last year a Forbes op-ed by Ken Silverstein “Rift Widening Between Energy And Insurance Industries Over Climate Change,” illuminated some of the relevant dynamics in this area. He first cited weather-related loss figures from Munich Re and Swiss Re, before turning attention to a Standard & Poors report, “Climate Change Is A Global Mega-Trend For Sovereign Risk,” looking at economic risk for entire countries. The report noted there were two mega-trends which had “emerged to dominate public discussion on global economic risks” since the turn of the century. “The first, global aging, is comparatively well-understood and the consequences relatively clear,” it explained. However, “The second, the impact of climate change, is far hazier and the potential outcomes much more challenging to predict.”
Silverstein then moved on to point out both a general lack of active engagement by insurers—noting that “only 23 of the 184 insurance companies that the investor network Ceres surveyed [in 2012] say that they have a comprehensive strategy to deal with climate change”—and the cutting edge of those that are taking action:
Not all carriers are “passive.” This past week, Farmers Insurance Co., a unit of the Zurich Insurance Co., filed suit against the city of Chicago for its alleged failure to prevent flood-related damages that it says are associated with climate change. It maintains that city officials are aware of the potential fallout from climate-related weather and yet they have done nothing to mitigate such events. As a result, it paid out millions in claims a year ago tied to storms in the city.
If the entire insurance industry took this advice—which, after all, is in their economic self-interest—it would clearly have an enormous impact. Just as every company has an energy bill, they also have insurance as well, and they’re likely to have a more personal relationship with their insurance provider than with their energy provider(s). As clean energy becomes cheaper, fossil fuels remain troubled, and insurers start speaking out more about climate risks, the entire business community will become increasing ripe for the same sort of massive attitude shift that we’ve seen around LGBT rights in recent years.
This brings us to a fourth area impacting business dynamics, the growing divestment movement, the main focal point where moral arguments enter the equation. The divestment movement is commonly marked as begining only in 2010, when Swarthmore College called on its endowment fund to sell all shares in fossil fuel companies. It received a major visibility boost in a 2012 Rolling Stone story by 350.org founder Bill McKibben, and 350.org quickly devoted a major effort to promoting the movement.
By October 2013, a study from the University of Oxford took note of its rapid development. The study identified a common development pattern in divestment campaigns, involving three waves: the first focused on “religious groups and industry-related public organizations,” the second focused on “universities, cities and select public institutions,” and the third on the “wider market” such as public pension funds. The report noted that, “From the perspective of the three waves of divestment the fossil fuel campaign has achieved a lot in the relatively short time since its inception in 2010: six colleges and universities have committed to divest, along with 17 cities, two counties, 11 religious institutions, three foundations and two other institutions.” A year and a half later, that list has grown significantly, with more than 2 dozen institutions of higher education, most prominently, Stanford University, scores of cities, topped by the three most prominent cities in the Pacific Northwest, Seattle, Portland, and San Francisco, a long list of religious institutions, and a growing number of foundations.
Even the heirs of America’s first family of oil, the Rockefellers,joined the divestment movement in September 2014. “John D Rockefeller, the founder of Standard Oil, moved America out of whale oil and into petroleum,” Stephen Heintz, president of the Rockefeller Brothers Fund, said in a statement. “We are quite convinced that if he were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy.” Although framed in hard-headed business terms—which the trends cited above fully support—the announcement was inextricably implicated in the divestment movement, with its strong moral basis. It thus served as a perfect example of the new kinds of synergies that are emerging in the fight against global warming.
In mid-March, when The Guardian announced its own divestment campaign commitment, with a call for the Gates Foundation and the UK’s Welcome Trust to join the movement, it discussed both the moral and pragmatic concerns, citing the risks of leaving the fossil fuel market too soon vs. too late, and then said:
This [contrast of financial concerns] is why the divestment movement has changed from being a fringe campaign to something every responsible fund manager can no longer ignore. How could they, when even the governor of the Bank of England, Mark Carney, has warned that the “vast majority of reserves are unburnable” and the bank itself is conducting an inquiry into the risk that inflated fossil fuel assets pose to the stability of the financial system?
When the president of the World Bank, Jim Yong Kim, urges: “Be the first mover. Use smart due diligence. Rethink what fiduciary responsibility means in this changing world. It’s simple self-interest. Every company, investor and bank that screens new and existing investments for climate risk is simply being pragmatic”?
Once the moral and financial arguments begin to converge like this, it’s difficult not to see the whole nature of the debate changing radically in the near future, and the divestment movement acts as a catalyst to intensify the forces of convergence—and to challenge the continued presence and influence of the fossil-fuel industry in elite institutions, typified by the Koch’s involvement in the museum world, recently challenged by “An Open Letter to Museums from Members of the Scientific Community” which expressed concern “that the integrity of these institutions is compromised by association with special interests who obfuscate climate science, fight environmental regulation, oppose clean energy legislation, and seek to ease limits on industrial pollution.” The letter went on to be quite specific:
For example, David Koch is a major donor, exhibit sponsor and trustee on the Board of Directors at the Smithsonian’s National Museum of Natural History, and the American Museum of Natural History. David Koch’s oil and manufacturing conglomerate Koch Industries is one of the greatest contributors to greenhouse gas emissions in the United States. Mr. Koch also funds a large network of climate-change-denying organizations, spending over $67 million since 1997 to fund groups denying climate change science.The letter concluded by saying, “we believe that the only ethical way forward for our museums is to cut all ties with the fossil fuel industry and funders of climate science obfuscation.” Thus far, the letter has fallen on deaf ears, as Joe Romm recently explained (“Smithsonian Stands By Wildly Misleading Climate Change Exhibit Paid For By Kochs”) but the mere fact that this battle is now being fought against a super-wealthy donor is itself a sign of the growing momentum against climate denialism.
There are other facets of convergence taking place in connection with the divestment movement. A good entry point for seeing this is another recent Guardian story, “Top academics ask world’s universities to divest from fossil fuels.” The story is about a statement issued by Academics Stand Against Poverty (Asap), a global group of about 2,000 researchers who study poverty and development. “At this moment in history, it is paradoxical for universities to remain invested in fossil fuel companies,” they wrote. “What does it mean for universities to seek to educate youth and produce leading research in order to better the future, while simultaneously investing in and profiting from the destruction of said future? This position is neither tenable nor ethical.”
If these were the only synergies I could point to, they might easily be ignored. Academics working on poverty are not exactly the most powerful institutional actors around, even when they do manage to speak in concert like this. But the combination of other factors in flux makes the situation very different than it would otherwise be—at least potentially. Throughout history there are moments when those who’ve long been in the shadows suddenly gain a chance to significantly shape the direction of history. We have just witnessed another such a moment with the RFRA fight in Indiana, and there’s a very real possibility that something similar could happen very soon in the battle against global warming as well. When it does, don’t say you haven’t been warned.
Paul H. Rosenberg is senior editor at Random Lengths News [20], a biweekly serving the Los Angeles harbor area. He runs the site Merge Left, a community of progressive thinkers free to submit their own content.
==