I attended the first organizing/exploratory meeting today of a group concerned about climate change, convened by First Presbyterian Church of Palo Alto. The meeting sprung out of the showing of Bill McKibben’s movie/discussion, which many of the attendees had also viewed. (See my blog post on Climate Change and Big Carbon for a summary and analysis.)
A few reactions to today’s meeting:
- The focus on Divestiture (from Big Oil) companies, suggested by McKibbens’ 350.org group was divisive. Some people were in favor, some felt that it was better to be activist shareholders. Some thought that it would be too hard to achieve, some thought that even if it were achieved, it wouldn’t impact the behavior of the oil companies. Some worried about the impact it would have on school endowments or pension funds. Some felt that personal divestiture was too small to be relevant, but a surprising number of people seemed prepared to take personal action.
- Information sharing: A good chunk of the meeting was spent on sharing what other organizations are already in operation (locally), and what resources they have. There was more discussion about how to appropriately share information from this meeting (and continue to collaborate in an online, distributed fashion, as well as in real life). I took the first part as a sign that the climate change fighters are still pretty fragmented, without a clear “go-to” repository for the information. I took the second part to guess that we’re probably still 12-24 months behind where all of the online support for groups stuff will “just work”. Google Groups ended up being the tool of choice, and this was probably a less than average tech savvy group from Silicon Valley, but average or better given the country at large.
- Personal responsibility vs. having other people do it: Even in this group of activists, (albeit more aging activists than young ones–someone jokingly said we should call the group “Fossils against Fossil Fuels”) there was still a mix of personal responsibility and personal avoidance. Aside from the recent Leaf buyer, there wasn’t a lot of talk about making personal reductions in air travel, car trips, or personal/home energy usage. There were a couple of instances where work was neatly dodged (assigned to someone not in the room, or nearly dropped). There was the hope/expectation that the younger generation (not really represented in the room) would be more active in the front lines.
- Under-appreciated good ideas:Sven, the Leaf Buyer, had a nice idea that I thought was PR genius: with the North Pole ice-free during the summer (coming soon!) where will Santa live?
Vanessa raised what I thought was the most hopeful point of the day, though I think she stopped short of its conclusion: The cost (per KWH) of carbon-based energy is continuing to rise (although US-based fracking may put the rise on hold for a while…) while the cost of alternative-based energy is falling. After they cross, why would people buy “dirty” energy? I guess I view this as the best plan: move as fast as we can to make alternatives as cheap as we can, making carbon-based fuel uneconomic. Perhaps lobby to also make carbon-based more expensive with a CO2 emission tax to hasten the crossing point.
- Energy independence for the US: Given that people in the room were also (generally) dedicated peace advocates, there was excitement behind the prospect that we could end our reliance on foreign oil, and the meddling in the affairs of the Middle East, and reliance on military might and a trillion dollar defense budget. That sounded good, but if it did so at the cost of staying on the petroleum-based energy infrastructure, is it a sufficient win?
My take on Divestiture
I’m of the opinion that we should not bother wasting time/political capital on divestiture. Big Oil is such a huge part of our economy, and of the market indices, you’d need to target not only direct holdings, but also indexed funds, and create an alternative index fund (“ex-Oil”) that got a lot of traction. Vanguard, the largest shareholder has $20B of XOM, just under 5% of the outstanding shares. So, even if the largest share holder (which would have to move all of its account holders to this hypothetical market index ex-oil fund) assigned a value of $0 to its holdings (and somehow created poisoned shares that couldn’t be traded, and didn’t increase the value of the remaining shares), it would probably only cut 5% of the value of the company, which would be unfortunate, but probably not game-changing for XOM.
I share the opinion that divestiture wouldn’t really impact company behavior. A really successful divestiture movement might drive stock price down 20% (destroying $80B of shareholder value in Exxon-Mobil alone…) but macroeconomic conditions might do the same thing, and we wouldn’t really expect XOM to do anything (behave differently). Given the level of profitability, I assume that they’re not really dependent on sale of stock to fund operations or service debt. Perhaps management and officers of the company would be influenced by the stock price impact that would harm options-based compensation? Maybe, but I’d cynically bet that the board would let them off the hook, re-price options saying it’s “not their fault”.
People aren’t really ready to boycott petroleum. On a personal level, the petroleum needed for car and airplane fuel, especially, is just too much a part of our life to imagine doing without. On a national level, we can’t seem to reach an agreement to cut usage of the rich countries, and can’t find common moral ground to insist poor countries stop short of the energy-intensity required to create products and lifestyles to rival what we have.
What *do* I recommend?
- Investment in alternatives, and diffusing them as quickly as possible. Make carbon-based fuel uneconomical. Redirect Big Oil subsidies into alternatives.
- Taxation on carbon emissions. A cap-and-trade system like the one which recently went live in California.
- Measures to limit global population growth. Access to good family planning resources in the US and the developing world. Reduction in child mortality to reduce family sizes.
- Start planning climate change mitigation strategies. I’m not ready to try geoengineering (too easy to have unintended consequences), but maybe trying to keep cities farther away from the coast, plan where the best farmland is likely to be, encourage a vegetarian diet, etc.
- Making personal commitments to use energy more efficiently and stay informed of the situation.