Monday, November 30, 2015

Don't Wait for Global Politics to Fix Climate Change: We Can do it Ourselves

Se below
(Photo credit: Wikipedia)
by James Dyke, University of Southampton, The Conversation:

It’s now almost certain that 2015 will be the warmest year ever recorded. However, rather than reduce greenhouse gas emissions - something that has to happen quite urgently in order to avoid crashing through the safety barrier of 2℃ warming - we continue to pump more into the atmosphere.

Thus far, the collective international response to climate change has been similar to a frog passively sitting in heated pan of water. We are in danger of being cooked alive from inaction.

We will have to wait and see if the latest and largest UN climate change summit in Paris will buck this trend and produce effective responses to climate change. Previous meetings have exposed a bewildering spectrum of issues, concerns, vested interests and general political dysfunction. By comparison, the physical science of climate change is simple.

170 years of global warming

Why has it proved so difficult to agree to limit carbon emissions?

One reason stems from the fact the Earth’s atmosphere is a public good, just like street lighting, schools or public parks. A public good is non-rivalrous in that my use of it does not reduce your or anyone else’s access to it. A stable climate is a global public good as it is something all of humanity enjoys. We all, to a greater or lesser extent, affect it too. It makes no difference if carbon dioxide is released in Beijing, Birmingham or Baltimore.

If the atmosphere is a global public good then, in the absence of enforcement via international law to limit carbon emissions, you may conclude we are doomed. There is nothing to stop someone from emitting more than their fair share - this is the free rider problem.

If enough people act selfishly (and much of economic theory begins with the assumption that humans are self-interested), then the Earth’s sinks for carbon pollution will be swamped and dangerous climate change will ensue. This would be an example of a tragedy of the commons which has become an influential feature of western economic thinking since the latter half of the 20th century. However, the situation is perhaps not quite so clear cut.

Can we avoid climate tragedy?

In 2009, US political scientist Elinor Ostrom received the Nobel Prize in Economic Sciences for her work on the management of public goods and common-pool resources. What Ostrom established is that, contrary to certain grim predictions, there are numerous examples of effectively managed public goods: Nepalese forests, American lobster fisheries, community irrigation schemes in Spain and many other systems are looked after sustainably through following a combination of eight principles.

Elinor Ostrom

The implications are profound. Rather than assume the market or central control are the most effective mechanisms to manage goods and services, Ostrom showed that groups of people can self-organise around common interests.

But it hasn’t escaped the attention of those trying to get international agreement on greenhouse gas emissions that some of these principles will not apply. In fact, if you are feeling particularly pessimistic, these principles can almost serve as a checklist of why such agreement will prove impossible. National boundaries do not stop the circulation of atmospheric gases, for instance, and there is no international body to police and enforce carbon emissions.

Global concerns, local action

So it seems all the more remarkable that agreements to limit carbon emissions and even reduce them from the atmosphere have been achieved. What’s more, these agreements are popping up all over the place.

More than 80 major cities across the globe are currently coordinating climate action. There are now a number of carbon trading communities that encompass a range of states in North America. EU member nations have agreed binding reductions while earlier this year the two largest emitters of carbon dioxide, the US and China, established important bilateral commitments to control carbon emissions in their respective countries.

These are all examples of polycentric governance. Having multiple levels of organisation allows flexibility and effective regional solutions to some of the obstacles that large, rigid governance can produce.

The Water Tribunal of the plain of Valencia, one of the world’s oldest law courts, rules on breaches of local irrigation law. Reuters

Are such efforts sufficient to avoid dangerous climate change? No. Nor are the national commitments to reduce emissions ahead of Paris. But what these regional initiatives show is that local communities can act independently of international agreements by making a global public good a local concern.

This may still seem puzzling to some economists and political scientists. While some of these initiatives make economic sense, what is the good of unilaterally self-imposed emissions limits if other regions don’t play ball? The answer to this question not only points the way to more effective action, but highlights a gaping hole in some people’s and institutions' understanding of climate change: it’s the right thing to do.

Climate change is as much a moral issue as a scientific one. Taking more than your fair share is wrong. Changing the climate which leads to people being harmed is wrong.

Any effective agreement that emerges from Paris will not have come out of a vacuum, but as a consequence of many individuals' and communities' agitation for change - some locally, some through the internet.

If we are going to address climate change, then recognising our shared values and interests is crucial. Humans are fundamentally a social species. We’ve only very recently appreciated that we are also a planet-altering species. Our moral senses know intuitively what we need to do in the light of such knowledge. Our economic and political institutions need to catch up rapidly.

James Dyke, Lecturer in Complex Systems Simulation, University of Southampton

This article was originally published on The Conversation. Read the original article.

Tuesday, November 24, 2015

The 7 Fossil Fuel Divestment Myths, and Why They Don’t Stack Up

Blair Palese
Blair Palese
by Blair Palese and Anne-Marie Fort,, The Fifth Estate:

Since it was launched over three years ago, the global fossil fuel divestment campaign has become the fastest growing divestment effort in history with a recent study by Arabella Advisors in the US finding that an estimated US$2.6 trillion (AU$3.66 trillion) has been divested from coal, oil, gas, or a combination of all three, by funds, trusts and foundations.

A new study this week from Corporate Knights showed that US$23 billion (AU$32.4bn) has been lost by 14 funds who chose not to divest from fossil fuels, including the Bill & Melinda Gates Foundation (with a loss of AU$2.68bn).

Recent arguments from a range of business experts and the financial media suggest that divesting is a bad idea. Below, we’ve taken on their arguments to show that it makes great sense - not only for the global climate but, with fossil fuel prices dropping drastically and global commitments to reduce or phase out fossil fuel use altogether being made, for the bottom line as well. So, let the fossil fuel divestment myth-busting begin:

1. Shareholder engagement with fossil fuel companies is the best way to drive change

Whatever your view, fossil fuel companies such as ExxonMobil and Peabody have long been aware that burning their products would raise global temperatures enough to cause glaciers to melt and sea levels to rise by the middle of this century. So holding on to your shares and “engaging” with fossil fuel companies is pointless at this point in time because their very product simply cannot be used in the very near future if we are to keep our world below the 2°C of warming the world has committed to in order to ensure it remains liveable.

As co-founder Bill McKibben says, the likelihood of fossil fuel companies committing to change now, because of shareholder engagement, seems more or less impossible: “Engagement is unlikely to persuade a company to commit to eventually putting itself out of business.”

The leading environmentalist Jonathon Porritt spent years engaging with fossil fuel companies on sustainability projects only to conclude that such efforts were futile. Porritt wrote: “There was a time when I seriously persuaded myself that it was still just about possible for companies like Shell and BP to find some way of transitioning into ‘fully-integrated energy companies’, investing as much in renewables, storage and efficiency as in hydrocarbons, instead of reverting to what they are today: pure-play hydrocarbon dinosaurs. It didn’t happen. Worse yet, the lengths they went to justify their continuing investments in new hydrocarbons have become more and more extreme.”

After years of documented resistance to proven climate change science, there is little evidence so far in support of the shareholder engagement approach.

2. We all use fossil fuels everyday, so divestment is hypocritical

Fossil fuel companies exist because we want and use the products that fossil fuels make and power – from airconditioning to heating, TVs to tennis balls. Shifting to new energy sources will take time, so no one is arguing for an on-the-spot end to all fossil fuel use.

In Pope Francis’ encyclical on the environment, Laudato Si, Francis has shown himself to be a strong supporter of progressive investment principles and clean energy. “There is an urgent need to develop policies so that, in the next few years, the emission of carbon dioxide and other highly polluting gases can be drastically reduced, for example, substituting for fossil fuels and developing sources of renewable energy,” he said.

The “divest-invest” strategy moves money into non-fossil fuel energy sectors that have already begun driving the transition to a low-carbon world. Analysis based on a report by Arabella Advisors has shown that the divestment movement has grown exponentially since its launch, with more and more investors reducing their fossil fuel holdings and diversifying their portfolios to include clean energy investment.

3. Divestment is not meaningful action - it’s just gesture politics

Divestment works by stigmatising the fossil fuel companies and removing their social license to operate. As pointed out in a report from Oxford University: “The outcome of the stigmatisation process poses the most far-reaching threat to fossil fuel companies. Any direct impacts pale in comparison.”

Divestment can also bring pronounced negative visibility for individual companies as illustrated by the Australian National University’s decision to divest shareholdings in seven resource companies including Santos, Oil Search and Sandfire in October 2013. Many of these companies responded angrily, claiming that the decision was unfair.

Who would have thought that a small divestment of A$16 million could outrage companies with a combined market capitalisation of AU$45 billion? Since the ANU divested from Santos, the company’s shares plummeted 60 per cent - dropping from a share price of nearly $15 to $6. What Prime Minister Tony Abbott at the time called “stupid” turned out to save the university millions.

In addition, as an increasing number of companies and organisations divest from fossil fuels along with public concern and calls for action, it can actually make it easier for governments to take action. The dramatic reality of the divestment movement has already been demonstrated by successful campaigns against corporations in apartheid South Africa, tobacco companies, munitions and gaming.

4. Divestment is pointless - it can’t bankrupt coal, oil and gas companies

Over 460 organisations have made some move to divest since the launch of the divestment campaign including the Norwegian Sovereign Wealth Fund, which shed billions of dollars of coal investments from its $900 billion fund earlier this year. The $860 million Rockefeller Brothers Fund divested from fossil fuels in 2014 and Stanford University dumped coal investments from its $18.7 billion fund the same year.

Here in Australia, divestment commitments have been made by the City of Melbourne to the Royal Australasian College of Physicians, Local Government Super, the National Tertiary Education Union, the ACT Government in Canberra and the City of Newcastle - home to the world’s largest coal port - to name a few.

In the beginning, the aim of the divestment movement was not to bankrupt fossil fuel companies financially, but to bankrupt them morally. But support for the movement has exploded since 2014 and with over $2.4 trillion divested from fossil fuels, the impacts aren’t just being felt at the heart strings but at the bottom line too.

5. Divestment means stocks will be picked up cheaply by investors who don’t care about climate change at all

In reality, the reason for buying shares is to make money by investing in companies that you believe will make money. But according to IPCC climate experts, global greenhouse gas needs to be reduced by 40-70 per cent by 2050 and zero emissions need to be reached by the end of the century. Therefore, anyone who buys fossil fuel stocks are taking on a known risk. A recent Carbon Tracker report notes “the fossil fuel industry’s history is peppered with examples of failing to adequately assess risk to investments because certain scenarios were deemed highly unlikely”.

Importantly, if large scale divestment could lead to a strong increase of stranded assets it makes no sense for the public institutions and universities primarily targeted by the divestment movement to be holding these stocks.

6. Fossil fuels are essential to ending world poverty

Today there are more than seven billion people on the planet, and, without question, the real growth in energy demand is going to come from the developing world. The Pacific nations, on our doorstep, are already one of the most disaster-prone areas in the world. Climate change, driven by unchecked fossil fuel burning, will bring more cyclones, damaging storms and king tides, and for low-lying nations, inundation.

Australia’s Minerals Council - and the many pure play fossil fuel companies around the world - often argue that coal, oil and gas made the modern world and are essential to improving the lives of the world’s poorest citizens.

But as Marc Purcell from The Australian Council for International Development, argues: “Renewable energy development can provide cheap and easily accessible energy to the 1.2 billion people currently living without electricity. The Pacific now relies on fuel imports for power - by switching to renewables, savings from fuel subsidies can be invested in health and education. If we carry on growing the global economy at its current rate and continue to rely on fossil fuels, countries that already rely on our aid will need more help, and many of the development gains will be wiped out.”

So, there is a choice: ensure poverty is eradicated by the large-scale deployment of renewable energy, and shift money out of fossil fuels by divesting; or continue to sell fossil fuels to the developing world and inflict a growing number of extreme weather, drought and other climate change impacts on them and the rest of the world as a result. The right choice seems obvious.

7. It’s none of your business how other people invest their money

First, many divestment campaigners target their own pension funds, universities and local governments - which is, in fact, their money. But even when it is not, the impacts of fossil fuel investments are not limited to share owners themselves. The exploitation of fossil fuels is causing climate change that affects everyone on Earth.

While those who still doubt the existence of man-made global warming look more and more certain to end up with well-fried egg on their face - our children and grandchildren have every right to harshly judge our failure to act because we decided that it was none of our business how other people invested their money.

Furthermore, the “none of your business” argument would imply no divestment campaign has been legitimate, meaning that the harm caused by tobacco, and apartheid in South Africa, would have gone for a significantly longer time.

The speed and success of the fossil fuel divestment campaign has, in many cases, been the result of frustration due to the lack of government action on climate change at all levels. It has allowed people, funds, institutions, churches and philanthropic groups to take direct action against climate change by moving their money and it has gotten not only the attention of fossil fuel companies, but of investors too.

Rockefeller Brothers Fund chair Valerie Rockefeller Wayne summed up the future of energy best when she told Rolling Stone in January: “If you look back, when John D Rockefeller Sr got into the business, we got our oil from whales. It’s preposterous, right? His big breakthrough was to get oil out of the ground. The breakthrough now is going to be in clean energy. You should be there at the forefront. Those are the investors who are going to make the most money.”
Blair Palese is chief executive of Australia. Anne-Marie Fort is a volunteer with the organisation.