Even the Bankers are Calling for Divestment

Last week the Bank of England expressed its concern to Britain's major insurance companies that their investment portfolios might be at risk from overvalued fossil-fuel stocks. Speaking to a conference of insurance executives, an official from the bank's prudential regulation authority suggested that large financial institutions could take a "huge hit" if major reserves of fossil fuel are left "stranded" by policies that reduce carbon emissions, whether by market regulation or legal injunction.

Last week's warning follows statements by BoE governor Mark Carney last fall, suggesting that "the vast majority" of fossil fuel assets "are unburnable" within sustainable climate policies. Former US Treasury secretary Henry Paulson made similar observations in a New York Times op-ed last summer, comparing the "carbon bubble" of overvalued energy stocks to the housing bubble of 2007, and the financial collapse it caused in 2008.

In short, financial leaders are coming to realize that "leave it in the ground" is not a wild-eyed slogan but the expression of a sane and inevitable truth. Not all: Shell oil executives are on record saying"We do not believe that any of our proven reserves will become stranded." That is, Shell intends to extract and burn regardless of the consequences. But Carney, Paulson, and other financial leaders are starting to assume that Shell, the Koch brothers, and other fossil fuel promoters can and will be restrained.

In effect, these leaders--as well as the conservative Financial Times--are making the case for fossil fuel divestment, though in different terms from movement activists. Unlike Naomi Klein, Paulson and the BoE believe the writing down of "stranded" fossil assets can happen in an orderly way within the capitalist model. Perhaps--though the resistance of Shell et al. suggests otherwise. It is nonetheless useful to know that the Davos crowd is no longer ignoring the fossil fuel dilemma but embracing it--for better or worse.

Required Reading

The Guardian has begun serializing the introduction to Naomi Klein's book This Changes Everything. Klein's book, a carefully researched and unblinking summary of recent climate science, is notable in the way it situates the climate problem--and our utterly failed response to it--in its proper social and political context. If you haven't read it, I strongly urge you to do so. The Guardian's excerpts come in manageable bites--pour yourself a glass of wine, and take deep breaths as needed. Keep in mind that she is moving toward an exciting and deeply progressive set of proposed solutions.You can find the first installment here 

Little Switzerland ...

... last week became the first of the world's nations to file its climate change plan with the UN office charged with organizing the Paris conference. All 195 COP 21 nations are expected to file such a plan, by April if possible, so that the results can be aggregated. In October the UN will try to determine whether these individual voluntary national plans add up to an adequate global blueprint, whose goal would be to limit temperature rise to 2 degrees C.

Switzerland, representing slightly less than .1% of the global economy and about .1% of its carbon emissions, is not a major player, but by filing the first INDC or national plan, it sets an important benchmark. So how did Switzerland do?

• Overall, the Swiss propose a 50% reduction (from 1990 levels) of carbon emissions by 2030, with aspirations for 70-85% by 2050. This places them above the EU's proposed target of 40%, but the details raise questions. Noting that their per capita carbon emissions are already below the world average--Switzerland produces a lot of 'clean' hydro power, but imports most of its energy in fossil-fuel forms--Switzerland proposes to decrease domestic carbon emissions by only 30%, while achieving the rest in "carbon markets and other offsets." Perhaps someone can enlighten me on just what this means.
• Environmental critics note that the overall goal is not fleshed out with specific proposals for achieving it. This will, I expect, become a leitmotif of most of these INDC national plans, and a serious problem for the whole UN process: it's easier to set a figure--as the US has rather vaguely done--but much harder to set down proposals that will challenge vested interests.

• A bigger criticism, from the Swiss environmental group Alliance Sud, is that “there is no word about climate finance and support for developing countries." This notion that the wealthier nations of the world--and Switzerland is surely one of them--will create a solidarity fund to helpo poorer nations meet their goals will be a major bone of contention in any final deal. Switzerland's draft plan sets an unfortunate example in this regard. 

So--it's exciting in a way to see this process start to unfold, but alarming that one of the wealthier and perhaps 'cleaner' nations is not setting the bar as high as it might. With its melting glaciers graphically displaying the consequences of indifference, perhaps Switzerland can be prodded to do more.

More Breaking News

In my previous post I noted a breakthrough in media coverage: The Guardian has declared its intention to make coverage of climate issues a priority, despite the elusive definition of what constitutes an 'event.' What I should also have noted is the strong, indeed revolutionary position taken by the editor, Alan Rusbridger, in defining the issue.

Rusbridge essentially endorses the argument framed by Bill McKibben and 350.org that "trillions of dollars worth of fossil fuels" must not be burned if we have any hope of maintaining habitable temperatures on our planet. That is, trillions of dollars of assets need to be written off as assets and left in the ground. Make no mistake: this is a RADICAL proposition, consistent with Naomi Klein's argument (most recently put forward in This Changes Everything) that to address the climate issue effectively poses a major challenge to capitalism as we know it.

Rusbridger, on behalf of The Guardian, endorses a paradigm-shifting, revolutionary vision of economic reorganization, and brings it into the mainstream. That's news.

All the News

Yesterday The Guardian printed a page-one editorial by its distinguished editor, Alan Rusbridger, announcing its intention to devote considerable reporting resources, and a major portion of its Friday homepage, to climate change issues. Rusbridger attributes this change in priority, if not policy exactly, to his own conscience, as he prepares to retire, and to the bleak prospect, in the absence of substantial interventions, of a future--quoting a scientific source--“incompatible with any reasonable characterisation of an organised, equitable and civilised global community.” Strong words.

Rusbridger interestingly notes the difficulties for news media in covering the future, in reporting on events "in the realm of prediction, speculation and uncertainty," as he puts it. That The Guardian is advancing with its climate change coverage despite this impediment is one more mark of its journalistic courage--but also a salutary warning for the rest of us. I have complained in previous posts of the scanty coverage given to COP 21 events in the New York Times, which seems to have no dedicated reporter for this topic and relies on fragmentary dispatches from Reuters and the AP. This omission from the newspaper of record contributes to a failure of awareness that is particularly damaging in what is far-and-away the world's most carbon-polluting nation (per capita).

Elsewhere I observe that Le Monde gives COP 21 particular coverage, as France assumes its responsibilities as host to the conference. The mayor of Paris, Ann Hidalgo, along with the regional president for Seine-St.-Denis, the actual site of the conference, are planning a full calendar of events from now till the end of the year, which should guarantee substantial coverage in France's lively press. But what about the rest of us? Will, for example, the Hindustan Times treat COP 21 (and its government's recalcitrance) as a major story? How about Xinhua or the China News Service?

The Guardian has set a high standard by committing to this level of coverage. Let's hope the rest of the news industry feels challenged to follow its lead.

In Case You Missed It ...

Last week the European Union, the world's largest economic entity, set out its goals for carbon reduction between now and 2050. You may have missed the story--it got minimal notice in the Times, and a bare mention in the Guardian. And the announcement is provisional: the EU Commission's draft needs to be reviewed by the 28 member states, who need to determine their national objectives, before a final version is submitted to the UN COP 21 process by the end of this month. Still, a few elements of this version might be worth the world's notice:

• First, the overall target: 60% reduction of carbon emissions by 2050 (in relation to 2010 levels), a rephrasing of the previous goal (50% of 1990 levels), and thus a disappointingly low threshold, not adequate, in the view of environmental groups, to reach the global goal of a 2 degrees C increase in global temperature this century.
• Second, the politics: by getting its draft out early, the EU is presumably trying to get the two other major entities,  the US and China, to commit sooner and more specifically to goals which, aggregated, would drive the larger process by their overwhelming size. Europe is the 3rd largest emitter, not big enough to leverage the global process by itself, but more amenable by far than the two larger polluters.
• Finally--and this is the real story, buried in fine print--the EU is calling for a legally binding protocol, with UN enforcement and 5-year monitoring, of whatever agreements are put on the table in Paris. Will this sit well with Senator Imhofe or the Chinese Central Committee? Maybe not, but it is a useful conversation to be launching now, 9 months before the Paris agreement risks being dispersed in generalities and good wishes.

Now the public sphere, here especially and wherever else it can, needs to take up that conversation, if the 'shaming' or national peer pressure mechanisms are going to work. Otherwise, we should all be working on those massive walls to keep out the seawater and desperate climate migrants ...

"Paris changes ..." (Baudelaire)

Something new on the iconic face of Paris, as though the Mona Lisa were sporting a nose ring or a new gold tooth: yes, that's a wind turbine on the Eiffel Tower, one of two vertical axis turbines recently installed as part of a more general renovation, according to The Guardian.

The installer, US-based Urban Green Energy (UGE), claims the turbines will produce 10,000Wh of electricity/year, enough to power the 1st-floor commercial spaces of the world's most photographed structure. But more importantly, the turbine project puts a little more wind in the sails of the UN conference as it lurches toward Paris. Well done!