Tag Archive for climate change

Mid-Peninsula Global Coolers initial meeting

December 3, 2012 / / No comments

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:

  1. 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.

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  2. 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.

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  3. 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.

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  4.  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.

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  5. 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?

  1. Investment in alternatives, and diffusing them as quickly as possible.  Make carbon-based fuel uneconomical. Redirect Big Oil subsidies into alternatives.
  2. Taxation on carbon emissions.  A cap-and-trade system like the one which recently went live in California.
  3. 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.
  4. 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.
  5. Making personal commitments to use energy more efficiently and stay informed of the situation.

 

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Climate Change and Big Carbon

July 26, 2012 / / No comments

Bottom Line:  Climate change signs are coming through stronger now than ever before, and faster than scientists anticipated.  The droughts in India and the US bode ill for food prices later this year, early next.  The suffering in poorer countries may cause additional deaths, social upheaval.  The economic interests of Big Carbon are working against our need to change.

Hot Enough for You?

Anecdotally, it’s been a hot summer.  My parents in Connecticut have talked about the 5 heat waves (3+ days of 90 degree+ weather) before August.  Anudip Foundation talked about “faculty that braved 45 degree Celsius (113F)  temperatures in stifling humidity [in India] to conduct their classes in remote places. Several suffered heat strokes in the process.”  Bill McKibben, in his Rolling Stone article marvels at Saudis’ report of “rain in Mecca despite a temperature of 109 degrees, the hottest downpour in the planet’s history.”  And that’s just the tip of the iceberg.  The rest of the iceberg (Petermann Glacier) broke off from Greenland, a mass of ice twice the size of Manhattan.  But maybe it’s OK, because one bigger than that broke off two years ago…  If you want something that’s unprecedented in 150 years, you can turn to this month’s ice melt of of the Greenland ice sheet, which overshot it’s “typical” level of 55% melting to go from 40% to 97% in 4 days.   Heat records have been broken left and right in the US, and the heat and drought has caused serious crop failure in key farming regions in the US 

“Some stuff technically is not going to be worth the combine bill to harvest it,” he said. “This is my 49th crop, and I have never had a year like this.”

In India, the story is similar:

“The situation is quite bad, exceptionally bad, and very serious for farmers,”  said scientist Kirpal Singh Aulakh, former head of Punjab Agricultural University in Ludhiana.

The Geo-Political Landscape for Change

(What follows is a summary of Bill McKibben’s Rolling Stone article.)

The weak consensus of the Rio+20 Global Summit was to maintain a temperature increase of 2 degrees (Celsius) or less.  Scientists believe this increase will cause a host of problems, but not be an existential threat to humanity and our way of life.  We have already seen a 0.8 degree increase, with associated problems (ice melt, droughts, oceans 30% more acidic). So some question whether even 2 degrees is permissible.  But no binding actions were taken to commit the largest emitters (China just surpassed the US) to any definite course of reduction.

Scientists have further estimated the amount of CO2 that could be released while still remaining within the 2 degree limit:  565 Gigatons by 2050.  According to the research cited in the article, on our current path, that level will be reached in about 16 years (adding 32 Gigatons per year, growing 3%).

Big Carbon (Big Energy)

The greatest source of the CO2 emissions is the burning of fossil fuels for energy (coal, oil, and natural gas).  The biggest energy companies (and, in countries where the state controls petroleum reserves, the states themselves) are sitting on known reserves that will exceed the 565 Gigaton limit 5 times over.  Yet in their quest for more energy (and to increase the $1 Trillion in profits captured since 2000), exploration for new deposits of carbon-based fuel continues unabated.  Indeed, with the easiest “finds” already exploited, the new sources (like tar sands or shale) require much more energy to extract, thereby increasing the effective emissions (and cost) of the “useful” energy.

So, while humanity ponders our existence, (or gets distracted by the latest celebrity gossip), the oil companies will also be pondering their existence, recognizing that if we (as a human race) were to enforce the 565 Gigaton limit, nearly 80% of the existing known reserves, plus whatever additional finds are made, could not be burned, rendering it essentially worthless.  Since the companies’ market value is derived from these assets and future earnings stream, any such limit would savage the value of the industry, possibly driving some of them out of existence.

If it’s a race to see who can organize faster to protect their interests to avoid being driven out of existence, all the signs so far point to the oil companies winning.

Postscript:  The Silver Lining?

A friend shared Matthew Ridley’s The Rational Optimist a couple years ago–the central thesis is that our inventive capability is providing for huge gains, and things that look grim today will be solved by technology or discoveries in the future.  Linear extrapolation misses the “disruptive game-changers.”  He argues that given a choice between a dollar of mitigation effort today and one (inflation adjusted) a hundred years from now, we should delay, and pay later, because our wealth and standard of living will have increased so much from discoveries between now and then.

I found his argument partially persuasive, but am still troubled:

  1. These environmental changes are happening faster than forecasted, and the effects seem to be more extreme than forecasted.
  2. Inventions not only impact our ability to make a positive difference; they also increase our capability to make a negative difference.  We’re more capable of making large-scale changes to our environment.  Yes, that may bail us out, but we also may miss a fatal flaw in our plan.
  3. The Big Carbon companies seem to be sticking their heads in the (oil) sands.  McKibben cites the lack of investment, even the shuttering of the alternative energy projects undertaken by the reigning corporate leaders.

So, yes, let’s be looking at inventions that might enable us to capture and sequester carbon.  Let’s look at alternative energies.  But let’s agree that our course of charging ahead, ignoring the warning signs and continuing “business as usual” is a foolhardy recipe for disaster.

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