Astrophysicist Adam Frank recently commented on NPR that climate change really is not really humanity’s fault. The crux of his argument is that while the science is settled that human activity has caused climate change, we really could not have known better. Clearly there is some real truth in this assertion. To quote from the article:
But here’s the crux of the issue: 150 years ago when we started building that fossil-fuel based civilization, we had no idea of what we were doing. We’d found this black goo seeping up from the ground and it turned out you could do awesome things with it. In the winter, you could burn it in a furnace and keep your house warm. In the summer, you could burn it in a power plant and use the electricity to keep your house cool. You could also burn it in an internal combustion engine and travel hundreds of miles in a single day. And all that electricity you were generating from the power plant? You could use that to keep the lights on at night and watch moving pictures of stuff happening on the other side of the planet.
At the outset of large scale fossil fuel utilization and into the 20th century this point is fair. But we must consider the case of Exxon, for example has worked to undermine climate science including widespread dissemination of both its own scientific findings as well as those of other groups. According to the New York Times:
So, even as one in-house memo stated that “fossil fuels contribute most of the CO2” that was turning the earth into an overheated greenhouse, another memo showed that the company would seek to “emphasize the uncertainty in scientific conclusions.
Other major players in Big Oil very likely done same. And quite naturally politicians in the House Science Committee (under the chairmanship of Lamar Smith, R-TX) who take large contributions from Big Oil are using sweeping new congressional protocols modeled on the open-ended Benghazi hearings, to harass and intimidate climate researchers. Dr Frank argues that its time to go beyond narratives of greed. Maybe not quite yet. While we all strive to avoid ad hominem, it seems greed driven attacks risk damaging the basic process by which our nation funds basic research. As David Roberts points out in an very thorough post at Vox:
To be clear, Smith has not alleged any corruption, wrongdoing, or even bad science. He hasn’t alleged anything. Nor has he offered any justification for why he needs access to NOAA internal communications. The new rules mean that he no longer has to explain or justify himself to anyone. He’s just hoping to find something he can use.
So, while Dr. Frank’s point has merit, and invective isn’t likely to help much its important we understand its not other factors, and indeed putting profit before future generations apply now as well as to the late 20th century. Because as he stated:
That’s because the real truth is this: While triggering climate change might not be our fault, not doing everything we can about it now that we know it’s happening — that would be our fault. Worse, it would be our failure as a species.
Two recent reports challenge the conventional wisdom that decarbonization via carbon taxes or other methods in concert with divestment from fossil fuel marketers means diminished prosperity. Both reports were widely covered and come from authoritative international groups. Both the New Climate Economy Project and a working paper from the International Monetary Fund (IMF) find that robust policy action reducing carbon emissions would have very limited negative effects on economic growth and shared prosperity. They also advance substantive arguments and analysis that such policies may indeed accelerate growth.
Notably and not without a soupçon of irony, economist and vocal climate change climate skeptic Richard Tol, argued in 2013:
In sum, there is no carbon bubble. If there were a carbon bubble, it would not be about to burst. If it would burst, the economic impact would be minimal.
So interestingly, there is agreement from distinct and opposite quarters that decreased use of fossil fuels poses limited economic risk. For example, as Paul Krugman wrote earlier this week in reference to the two reports from the New Climate Economy Project and the IMF:
This might sound too good to be true, but it isn’t. These are serious, careful analyses….
On one side, there has been dramatic progress in renewable energy technology, with the costs of solar power, in particular, plunging, down by half just since 2010. Renewables have their limitations — basically, the sun doesn’t always shine, and the wind doesn’t always blow — but if you think that an economy getting a lot of its power from wind farms and solar panels is a hippie fantasy, you’re the one out of touch with reality.
On the other side, it turns out that putting a price on carbon would have large “co-benefits” — positive effects over and above the reduction in climate risks — and that these benefits would come fairly quickly. The most important of these co-benefits, according to the IMF paper, would involve public health: burning coal causes many respiratory ailments, which drive up medical costs and reduce productivity.
And we may be in later stages of divestiture than some opine. For example, Fund Balance has created an ETF on the Motif Platform that tracks Coal Stock prices. It was initiated after Stanford University’s signal move to divest from coal stocks. This ETF is down 32% since inception in May 2014 vs. 5.9% return for the S&P 500 and down 77% over the past five years vs. a 109% return for the S&P.
What of the argument that China and India will continue to rapidly increase their respective carbon emissions even as US and EU emissions fall? We can see now that there are many health benefits and hence productivity gains from cleaner air and water. Factor in the inevitable pressure such efforts will put on these two nations to curb emissions as well as their budding sustainability movements (not to mention pollution so bad that major cities must be shuttered and entire rivers cleaned ever more frequently), and such arguments suddenly reveal their superficiality.
So, critical mass for decarbonization is ever closer as the World Council of Churches, Rockefeller Foundation, Google among many other large scale organizations join in with major universities in their divestment commitments. As Eric Schmidt said when asked about Google’s withdrawal from fossil fuel promoters/renewable energy policy antagonists, The American Legislative Council a.k.a. ALEC:
“The facts of climate change are not in question anymore. Everyone understands climate change is occurring, and the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place,” Google Chairman Eric Schmidt told NPR’s Diane Rehm in explaining the decision. “And so we should not be aligned with such people — they’re just, they’re just literally lying.”
Here at the midpoint of 2014, solar power technology continues its advance while its marketplace momentum builds. Economic policy and commercial efforts designed to induce commercial innovation must keep apace. And there are pockets of progress in the political economics of deploying solar. Take for example this post from Clean Technica: “Solar Energy’s Quiet Invasion Into Professional Sports“. Or consider the Regional Greenhouse Gas Initiative (RGGI), a market-based regulatory program in the United States that reduces greenhouse gas emissions.
And in Germany, one of the world’s most important economies, phys.org reports, “The Fraunhofer ISE research institute has announced that Germany set a record high for solar use on June 9—on that day the country’s solar power output rose to 23.1 GW—50.6 percent of all electricity demand. The record occurred over a holiday, which meant less demand, but it still marks a major step forward for the world’s solar power leader.”
Key aspects of the report from our perspective:
Despite not having a generally sunny climate, Germany has been pushing solar energy, but not from the huge solar farms as seen in other countries. Other nations, like the United Kingdom, report the same.
The German government is on track to reduce greenhouse emissions from electric power generation from coal fired power plants while at the same time retiring its fleet of nuclear power plants (scheduled for closure by 2022).
The FRG aims for an energy mix of solar, wind and biomass; though solar has become the national leader according to most reports.
The move to solar has not been without its problems, of course. The government plans to lower or remove subsidies as soon as possible, and the demand for batteries to store all that home-grown electricity is outstripping supply causing a rise in prices. Also, it’s not clear what sort of role utilities will play going forward. Currently, many homeowners are reporting surplus energy production on sunny days which they sell to electric companies, which now find themselves having to store it for use during cloudy stretches.
There’s another problem though it’s not as obvious: the German government noted recently that almost seven million households in the country are living in energy poverty (defined as having to spend more than 10 percent of income on energy bills). The national energy program, Energiewende, has resulted in some transfer of wealth. Economists note that even with subsidies, it’s generally the wealthy and sometimes the middle class who can afford to put solar panels on top of their houses. The poor continue to live off the grid paying taxes that provide the funds for the subsidies. There’s also some evidence that the country’s energy program is pushing energy costs higher overall, resulting in more electricity being produced by cheaper fossil fuels.
Energy poverty is also a problem in the US. As states like Ohio abruptly suspend widely popular solar power policies, working poor, middle class families, and businesses see expenses rise. Manufacturers like Honda and Whirlpool joined consumers in opposing Ohio Governor Kasich’s executive order to freeze its program. Additional side-effects weigh on taxpayers. As more coal is used public health suffers resulting in rising health care costs, and water treatment costs increase too which is also true of fracking for natural gas. These costs are passed along disproportionately to small businesses hurting them as well as working families. Continue reading Solar Power Usage in US and EU Builds, Policy Innovation Falters→
Does it make sense to tell someone that doesn’t have health insurance to go to the doctor? Does it make sense to expect jobless and underemployed citizens to save more? Many of the most profitable corporations across the US perennially underfund their pensions while simultaneously funding campaigns for privatization of social security paired with cuts to the program.
Yet, these same corporations oppose raising the cap on payroll taxes or asking Wall Street financiers to sacrifice via minimal financial transaction taxes common in the US during many a bull market and still common in the EU and Asia. All of this set against a backdrop of historically high corporate profits, S&P record highs, and stratospheric ratios of CEO pay to that of middle management and wage earners. The term generational theft is popular argot for corporate bureaucrats and their funding recipients in Washington, DC. Many of the CEO’s and hedge fund managers recommend pain of the majority and none for themselves. Yet, US taxpayers currently fund corporations at an historical scale via low interest rate loans and subsidies. This is the real generational theft: draining the the US middle class so financial speculators can ship away jobs, keep cash in tax havens, and speculate on Asian markets.
Gillian Tett writing in the Financial Times makes notes of a statement by a top executive of a consumer goods conglomerate:
We see a pronounced difference between how people are shopping today and before the recession,” the executive explained. “Consumers are living pay cheque by pay cheque, and they tend to spend accordingly. Then you have 50 million people on food stamps and that has cycles too. So for our business it has become critical to understand the cycle –when pay [and benefit] cheques are arriving.
Hence, the mostly austerity driven so-called recovery further reveals another deteriorating economic indicator for the middle class. Compare and contrast this with austerity champion the Walton Family and its Walmart. Without accounting for its massive local and federal tax breaks and subsidies, Walmart receives even more welfare from US taxpayers by paying its workers so little that they cannot afford healthcare and so must utilize social programs funded by their neighbors and fellow Walmart customers. In short, the world’s largest employer, after the US Department of Defense and the Chinese Military, relies on taxpayers rather than participation in the general welfare of the communities in which it operates and generates huge profits for its small group of majority shareholders (5% of of its owners possess 50% of its shares). Is this an example of good corporate citizenship?
Nevertheless, the most economically secure in our society mostly talk of deficits and are enabled by our nation’s highly consolidated media to dominate the public debate thereby granting them disproportionate exposure. Yet, their arguments that austerity and fiscal contraction will resolve the unemployment crisis fail logical and evidentiary tests time and again. Sequestration is projected to shave a point off GDP this year. As GDP shrinks consumers have less money to spend and consequently labor demands falls. Further, low-paying and low-to-no benefit jobs, which are the bulk of jobs now being created in the US, threaten a generation’s retirement security and access healthcare (health services as opposed to health insurance need disintermediation). Furthermore, corporations and the super affluent pay lower taxes than ever. Supporters for this program argue that it frees up capital to be reinvested in the economy. But, this not the pattern of the past 30 years. In the last decade the pace of reinvesting these perquisites into the economy or funding pensions has all but completely lapsed. Rather, these windfalls are shipped to hedge funds and tax havens. Additional study finds deeper problems.
That was my goal in my first law review article, “Improving Retirement Options for Employees”, which recently came out in the University of Pennsylvania Journal of Business Law. The general problem is one I’ve touched on several times: many Americans are woefully underprepared for retirement, in part because of a deeply flawed “system” of employment-based retirement plans that shifts risk onto individuals and brings out the worse of everyone’s behavioral irrationalities. The specific problem I address in the article is the fact that most defined-contribution retirement plans (of which the 401(k) is the most prominent example) are stocked with expensive, actively managed mutual funds that, depending on your viewpoint, either (a) logically cannot beat the market on an expected, risk-adjusted basis or (b) overwhelmingly fail to beat the market on a risk-adjusted basis.
Could this meltdown have been avoided? Should rating agencies have spotted it? Well, this is how it would work with the rating agencies when we were building a new CDO. They would tell us their parameters and criteria; if you meet this requirement, you get that rating and so on. And they gave out a free model so we could test our product and tweak our portfolio for the CDO until it fit, I mean get the rating that we wanted. We would do a lot of stress-testing ourselves too, of course we would. We’d pretend the market changed and run the models to see how our products would hold.
But what happened during the financial crisis was like a perfect storm. In our tests we would assume the market moved, say, 10% – while in reality it rarely moved more than 1%. Now the crisis happens and suddenly the market moves 30%. Our models were based on what we saw as normal. Now we saw numbers behave in ways barely conceived possible.
Consequentially, a quartet of corporate sector driven storm clouds hang on the horizon:
Underfunded pensions from corporations with record amounts of cash and an investment climate skewed towards insiders and Wall Street
Their ongoing failure to hire new employees and consistent blockage of publicly funded programs to fund infrastructure investment
A largely fossil fuel derived economy that requires large scale degradation of our present and next generations air and water resources
Over-priced/under-performing privatized healthcare drives healthcare inflation at unsustainable rates all the while forcing the good neighbors in US society to pick up the tab for the uninsured, many of whom are employed by highly profitable firms
Whats going on?
Why are record profits and CEO pay more and more divergent from the economic well being of the society’s whose labor and resources they use?
The partners at Fund Balance make frequent use of THE GREEN TRANSITION SCOREBOARD® (GTS) from Ethical Markets Media in our work. The GTS provides guidance to our thoughtlines leading up to the Rio +20 UN Earth Summit as well. The GTS provides fresh, incisive, and thorough analysis of the intersecting and diverging trends in sustainable policy and industry. As a function of our business practice, and in pursuit of our mission to utilize social, human, and financial capital in the service of a sustainable civilization, we are pleased to feature it here.
Tracking investments since 2007 in green companies and technologies globally, the GTS now totals more than $3.3 trillion.
Ethical Markets Media finds an abundance of progress in sustainable business activity in the 2012 GTS:
Asia, Europe and Latin America catching up with the USA in total non-government investments and commitments for all facets of green markets. 2011 ended with a GTS total of $3,306,051,439,680, starting from 2007. Given the many studies indicating that investing $1 trillion annually until 2020 will accelerate the Green Transition worldwide and the over 100 research reports and articles referenced in this years’ update, the “Green Transition Scoreboard® 2012: From Expanding Cleantech Sectors to Emerging Trends in Biomimicry” definitively shows green investments are becoming the norm.
GTS is a time-based global tracking of the private financial system covering all all sectors involved with green markets. Transparency is key as delineates ethical progress in wealth building as defined by the triple bottom line of planet, people and profits.
Additional detail of the GTS:
The logo a visual symbol for inevitable human progress whose barometer rises, away from the symbols of the out-dated Fossil Fuel Era, as green investments increase over the next ten years and we enter the next economy – the age of light.
The GTS was created and realized by Hazel Henderson and Ethical Markets Media, LLC and as such it is updated and maintained by them. For investors, researchers, stakeholders, cultural creatives, GTS provides rigorous triple bottom analysis and guidance to financial data and organizations that have been screened using the strictest of social, environmental, and ethical auditing standards.
WILL money saved from using clean technology simply be spent on using more energy? Jevons paradox (or the Jevons effect) is named for economist William Stanley Jevons. In the 1860’s, he observed that technologically driven increases in the efficiency of coal-use increased coal consumption in a wide range of industries. Counter-intuitively to some, he argued that technological improvements could not be relied upon to reduce fuel consumption. Buyers simply use the savings to buy more energy. Such rebound effects as a batch of recent research reveals, are at work in energy markets yet are often overdetermined and misunderstood. Their occurrence suggests the need for carbon taxes in order to price environmental risk in energy costs. The basic logic of such taxes was sketched out in the 1920’s by another economist, Arthur C. Pigou, as the Pigovian Tax. He argued that landowners who allow their rabbits to overbreed and spill over to neighboring land, therefore damaging crops, have a financial responsibility for the damage. Such activity, often uncorrected by markets, is seen as a market failure. So its remedy is a tax or law to protect the rights of neighboring landowners.
Interest in both is keen among policymakers, thinktankers, bankers, and the general public as the tension between energy demand and supply increases. Pollution, global warming, declining oil reserves, and increasing demand for energy in the neoliberalized global marketplace underlie both the interest and the tension.
To the extent that they are at work, Jevons rebound effects in a system vary based on the scale of the market considered. For example Richard York of the University of Oregon finds:
A fundamental, generally implicit, assumption of the Intergovernmental Panel on Climate Change reports and many energy analysts is that each unit of energy supplied by non-fossil-fuel sources takes the place of a unit of energy supplied by fossil-fuel sources 1, 2, 3, 4. However, owing to the complexity of economic systems and human behaviour, it is often the case that changes aimed at reducing one type of resource consumption, either through improvements in efficiency of use or by developing substitutes, do not lead to the intended outcome when net effects are considered.
Dr. York’s work appears to reveal an instantiation of the effect. Across most nations of the world, developed and developing, he reports an average pattern, “…over the past fifty years is one where each unit of total national energy use from non-fossil-fuel sources displaced less than one-quarter of a unit of fossil-fuel energy use. When looking at electricity specifically, the displacement of each unit of electricity generated by non-fossil-fuel sources is less than one-tenth of a unit of fossil-fuel-generated electricity.”
These conclusions put a useful empirical foundation under recommendations found in Google.org’s clean energy innovation study: meaningful suppression of fossil fuel consumption requires adaptation of mainstream energy policy. Also looking at the international scale, Grist.org published a chart this week titled The mind-boggling rise in Asian coal consumption shown as Exhibit 1.
Coal going unconsumed in the U.S. is being burned with little scrubbing in China and India, further arguing for the need to decarbonize via international agreements. Liberalized trade (neoliberalism) needs alignment with a flow of trade that balances externalities – pollution – created by exchanges of resources and capital. This also complements York’s finding: shifts to renewables will be inconsequential if the total decarbonization rate isn’t decelerated, that is, if amounts are merely shifted from one market to another.
When Rebound Effects Are Perceived But Not Found
Then there is the contention of the paradox at work in driver behavior popularized as the ‘Prius Effect” in sources such as Conundrum and the Wall Street Journal. Their argument is that Prius owners drive more and thus erase their net carbon and energy savings for the system. However, the work of Ken Gillingham of Yale University and analysis from CO2 Scorecard show Prius owners rack up comparatively the same vehicle mileage as non-Prius owners.
This Prius Fallacy has a dual premise: Prius drivers drive more because they are paying less for gas, and/or they use their savings on carbon-intensive goods and activities.
Gillingham’s micro-dataset on personal automobiles contains information – further analyzed by Thinkprogess – which refutes premise one as the scale of the consumer. The plot in Exhibit-2 shows no significant difference in Vehicle Miles Traveled (VMT) by Prius owners vs. the rest of California’s drivers. (For those interested in statistical details on the data and diagnostic regression Thinkprogess’ analysis is worth a good study). Prof. Matthew Kahn of UCLA writing in the Christian Science Monitor reinforces these conclusions.
So in these cases when consumers switch from conventional cars to a fuel-efficient hybrids a meaningful reduction in gasoline consumption – up to 430 gallons per year for an owner who switches from an SUV— is also observed.
THE gathering dangers of global warming for life necessitate that humanity collapse its dependency on fossil fuel energy (FFE). Ecological fiduciary responsibility requires shifting balance from political restraint to action. The challenges of managing a drawdown of FFE’s in concert with economic security, while significant, are often exaggerated. Recent research and analysis show that oil and coal-fired power plants exact pollution damages larger than the economic value they add. For example, accounting for the gross external damages (GED) from coal would add ~17.8¢ per kilowatt-hour (kWh) of electricity generated. In 2012, German utilities will obtain rooftop solar on long-term contracts for ~23¢/kWh. Large projects will receive just 18.7¢/kWh. This makes it very likely that solar electricity will be cheaper than that from coal by late 2013 in Germany. And as a result of California’s clean air bill A.B. 32 it will not be far behind. It is clear that GED considerations further strengthen the economic argument for decarbonizing our economy and that the trend of lower cost cleaner energy is accelerating. This can be contrasted with growing purchase and societal costs, often going unpaid, of FFEs.
What would a program similar to the Germany’s do for market and external costs in the U.S. market? More abundant sunshine in the many areas of the US (29% in Minneapolis and up to 70% in Los Angeles) makes parity with Germany easily attainable. Americans could buy solar energy on long-term contract fors 18.6 ¢/kWh in Minneapolis and just 15.4 ¢/kWh in Los Angeles, taking into account only current subsidies. Factor in the federal 30% solar tax credit, and solar could be had for 14.3¢/kWh in Minneapolis and 11.8 ¢/kWh in Los Angeles.
Impediments remain to growing solar as percentage of US energy sources. For example GEDs and Energy Return on Energy Invested (EROEI) of solar modules are different. Solar cells are built in Europe with its mix of electricity generation of nuclear, wind and other sources and must be compared to building solar cells in China, which has mostly coal-generated electricity and higher GEDs. A more robust body of research for Life Cycle Analyses (LCA) of solar plants is needed as they are increasingly built at scale.
But, what about financing and scaling across the US? The existential challenges of deploying renewable energy (RE) sources to address global warming can be met like those of the Great Depression, World War II, and space exploration: 21st century versions of War Bonds and Patriot Taxes integrated with coherent public-private partnerships to develop RE sources and infrastructure. Two of the world’s largest economies in Germany and California are leading the way. Yet fossil fuel marketers still dominate the debate contending that higher (FFE) prices hurt the public economy and that renewables are impractical despite the evidence to the contrary.
Ambitious politicians assure the public they can control the cost of energy and low energy prices. They argue that there is no need or, indeed, no substantial benefit from clean energy investment subsidies but support ~12x more subsidies for FFE over RE . Meanwhile, public investment in RE projects that benefit the economy and ecology are to be found everywhere, and financial, technological, and policy innovations instantiate sustainable growth. Both Germany and California are ahead of schedule for supply from their RE investments. Yet Germany is planning to cut its subsidies via its Feed-In-Tariff (FIT) while RE plants in California come online. So more hard work to implement policy to accelerate deployment and remove market barriers lies ahead. Continue reading Green Lighting Growth: Climate Patriot Bonds and Carbon Taxes→
We at Fund Balance are concerned that the only mention of climate change in President Barack Obama’s 2012 State of the Union address was “The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change.”
The U.S. National Academy of Sciences states, “The world is heating up and humans are primarily responsible. Impacts are already apparent and will increase.” Greenhouse gas (GHG) induced climate change is a clear and present threat to our civilization and way of life. Its continued politicization is dangerous. We accept the consensus of the world’s scientific community which is summarized well by the American Chemical Society:
Careful and comprehensive scientific assessments have clearly demonstrated that the Earth’s climate system is changing in response to growing atmospheric burdens of greenhouse gases (GHGs) and absorbing aerosol particles. (IPCC, 2007) Climate change is occurring, is caused largely by human activities, and poses significant risks for—and in many cases is already affecting—a broad range of human and natural systems. (NRC, 2010a) The potential threats are serious and actions are required to mitigate climate change risks and to adapt to deleterious climate change impacts that probably cannot be avoided. (NRC, 2010b, c).
We further acknowledge and accept the conclusions of our medical community. The American Medical Association (AMA) urges that we as a society confront the health issues of climate change now.
Scientific evidence shows that the world’s climate is changing and that the results have public health consequences. The AMA is working to ensure that physicians and others in health care understand the rise in climate-related illnesses and injuries so they can prepare and respond to them. The Association also is promoting environmentally responsible practices that would reduce waste and energy consumption.
We see that escalating carbon emissions are seriously damaging our oceans depleting them of oxygen and acidification. Carbon dioxide emissions caused by human activities over the last century have increased the acidity of the world’s oceans far beyond the range of natural variations, which may significantly impair the ability of marine organisms to live. We realize that rapid deforestation increasingly impedes nature’s ability to buffer carbon dioxide concentrations in our atmosphere and thus keep our air suitable for breathing.
The time is now for President Obama and Congress to heed science and pursue evidence based policy formation in addressing the real and gathering dangers of Climate Change. Putting a price on carbon is a critical first step.
“Reality leaves a lot to the imagination.” — John Lennon
Imagination, that force which when coupled with discipline, drives the arts. Such a force is necessary to successfully protect and sustain our biosphere as it represents the best alternative to cynicism and defeatism. My work, involvement, and strong passion for the arts catalyze a lifelong love and respect for our improbable orb, the earth. A few examples of this force which are set out below as well asBeethoven’s 6thalways leap to mind. Clearly many members of the artistic community share this sense of connection.
My first collaborative project out of college was an effort to broadcast an image of the earth from outer space onto the Jumbotron in Times Square. At this time, the World Wide Web remained a research project in labs and universities including the one I attended. So I learned early on what an amazing treasure of earth imagery was stored at NASA, the JPL, and other labs. This project partially resulted from my studies in Kenya at the Athi River research station. Each night the research assistants would lie in the savanna watching satellites pass overhead in their equatorial orbits. Witnessing the absolutely divine beauty of our planet in Africa, from other ecosystems such as the Togiak River basin in Alaska and much of the the American West, and in the woodlands of Alabama where I roamed growing up, has made me a naturalist at heart. So, knowing that the earth was entering a crisis, I wanted people to simply see her from space everyday as they scurried about one of her busiest intersections.
My grant application to the Whitney Museum’s fellowship program to rent the Big Screen in order to broadcast the images of our planet was rejected. That hardly slowed me down. Seeing these images and thinking of what I know of astronomy and astrophysics, the shear improbability of Planet Earth has always struck me. For this reason alone, it seems we should cherish the earth and its unlikely ability to support and sustain a broad and diverse array of life forms.
Looking at our solar system, our galaxy the Milky Way and beyond, we notice one thing: most planets are rocky and uniform, lack an atmosphere, or are so stormy and gaseous as to not credibly support life. A great many are too close to their sun or too far away to sustain life. (This essay is not to say one way or the other if life as we conceive it exists out there.)
My travels to Africa, which included skin diving in the Indian Ocean, particularly heightened my sense of the earth’s lungs and plasma- its forests and oceans. In travels since to places such as Beijing, China, it grew increasingly clear that Earth was entering a serious crisis.
Surely since the first rain dances began, art has transmitted an acceptance that humanity’s dominion over the earth is limited, and that somehow every technological discovery is limited in its ability to help mankind. The Christian Bible charges mankind with stewardship over the earth, as does the Koran and numerous other religious texts. This is not to say we do not need technology or agriculture. We do. The very satellites I watched traverse the sky in Kenya are now used to observe earth and alert us to the rapid degradations in her life support systems. In short, sustainable agriculture and tool-making are essential for a thriving civilization.
Artistic expression reinforces the notion that both agriculture and technology are critical for the survival of our civilization. Artists, along with farmers and technologists, have after all, strong histories of technological innovation. They have done so in provisioning means for survival and media for creating deeper connections amongst humankind. In the 21st century, we see new challenges in the how we must shape the methods of agriculture and technology. This will help us sustain our planet, which had literally a vanishingly small chance of existing.
For the sake of brevity, excuse me if I leave it to you, the reader, to think of your own examples. There are many: I will touch on just a few. I think of Shakespeare’s sonnets and
Jonathon Franzen’s recent novel Freedom. Interpretive movement, from the rain dances of the Anasazi to Igor Stravinsky’s Rite of Spring, share a seamless flow of connection to the earth through their rhythm and movement. Film making brings appreciation of ecosystems to the fore through such works as Avatar and Godfrey Reggio’sQatsi trilogy. One of our collaborators at Fund-Balance, Jessica Baron, has given us a great exemplar as well with the Green Song Book from her work to preserve and protect arts education via Guitars in the Classroom. Artists get it.
As someone who studied visual art formally for over a decade, I have a great many favorites from this discipline. The work of Andy Goldsworthy always captures my imagination. Another British artist Jason DeCaires Taylor’s recent Silent Evolution presents the convergence of past and present, human and ocean. I hope you will seek out the works of these artists if you are not yet familiar with them.
Another important way that imagination helps us “remain in light” with respect to the crisis that our earth faces is cultivating empathy, the ability to imagine what it is like to be in another creature’s skin or circumstance. The arts amplify my consideration of what it’s like for someone else and their life in their time and space.
From perhaps a broader perspective, Aristotle’s prescient distinction between “oikonomia”, use value of products in the real economy, and “chrematistics” the maximization of exchange value measured by money, seems as relevant now as then. Contemporary finance and resource extraction operate irrespective of their environmental impact and hence lack empathy for natural systems they destroy. These pursuits fail to employ imagination towards finding ways to minimize such degradation and thus sustain the very systems that create capital and wealth. The arts generate value for objects and/or expressions beyond crude additions of the cost of materials. This is a deeply human mode of thinking that our civilization should factor back into our economies and ecologies. And to wit, artists have a long, hallowed, and harrowed tradition of working together with very limited resources to solve problems.
It may seem counter intuitive to some, but artists can inform business, banking, and policy making in the 21st century just as they have with Kabuki dances in Japan and in the plazas of Florence during the Renaissance. In this century, if Wall Street practiced empathy and took a long view of culture and civilization while they calculated their winning formulas while spinning their deals, abundance might occur without the depletion of the very land beneath our feet, without disregard for degradation of our air and water, and with respect for the mineral resources held deep in the earth. This in turn protects and preserves the means by which wealth happens. In sum, to protect the earth, we must protect the arts.
So I encourage you to join me in looking at the great Pacific garbage patch- a flotilla of discarded plastic in the South Pacific-estimated to be the size of Texas and the expanding dead-zones in our oceans with expansive imagination. I also encourage you to read a great essay by a great artist, Sigourney Weaver. She describes how empathy for women’s rights can preserve and reinforce a balance between ecosystems and human civilization. She writes
“Two groundbreaking studies, one from the U.S. National Center for Atmospheric Research and one from the Futures Group, found that simply by meeting women’s existing needs for voluntary family planning, we could reduce carbon emissions by between 8 and 15 percent. That is the equivalent of stopping all deforestation today. Empowering women to make critical decisions in their own lives can help solve the biggest environmental and humanitarian challenge of our time”.
This is another recent example of an artist using empathy and imagination to point to solutions for a major problem confronting civilization.
In the early 90’s, I participated in a project in which I enlisted a choreographer and composer to create a dance piece and compose music to be performed against a backdrop of images of the dancers’ brains via PET scans. It was a challenging and expensive endeavor. The concept was to present both the internal rhythm and flow of each dancer with each viewer’s external perception. My hope was that this effort to reveal the beauty of life both within and without would reinforce the audience’s sense of its sanctity.
That one got turned down as well with no explanation, just a simple rejection notice. Perhaps that was for the best as it doubtlessly led me to consider the need for development of green technology and the far nobler pursuit of finding sustainable means with which to power it. And, in turn, we at Fund Balance who with our newest partners join in putting imagination and empathy to work in order to inspire and inform investing in sustainability.
In the coming months, we will hear a lot about the Taxed Enough Already (TEA) Party’s plans for the U.S. during the 112th Congress. No doubt we shall hear how such plans signal a new, brighter era.
But do they?
The principles espoused by the Tea Party and their Republican allies already dominate policy across America in many of the red states, such as South Carolina and Nebraska. These states have for many decades now served as laboratories for TEA Party neoliberalism. They share very low tax rates on wealthy individuals and businesses, high carbon emissions, low unionization (enforced via so-called Right-to-Work statutes), privatized and under-funded public healthcare and so on.
When viewed in contrast with blue states, such as New York and Washington, what is the quality of daily life in the red states?
The picture that emerges from the numbers at left and below shows that blue states provide cleaner air, higher rates of education, and higher per capita income than red states. Furthermore, blue states pay more into the federal government than they get back while red states take more than they pay.
American states paying more into the U.S. Treasury (the blue states for the most part) also have higher rates of unionization combined with higher standards of living than their red tea party counterparts. In red states we find less unionization, lower rates of education and income coupled with higher rates of infant mortality and teen pregnancy. Arguments about the failure of abstinence only approaches to family planning aside, some may argue that a lower cost of living offsets some of these drawbacks for red state citizens. But given the extent of red tea party breastbeating about “economic growth,” it is an interesting irony that these red states take more from the Treasury than they provide and afford their citizens a lower quality of life as described in Chart 1.
Chart 2 breaks out how most red states are subsidized by blue states and have much higher rates of carbon emissions, the emerging standard measure of general pollution. The not so astonishing observation we make about Charts 1 and 2 is that they would appear to suggest that the well-being and productivity of blue state citizens surpasses that of their red tea party neighbors.
Recent and ample anecdotal evidence supporting this conclusion abounds.
In Florida, a state loosely defined by a deeply conservative northern panhandle, and a progressive Southern portion, we see HDI scores just above the national average and a consumption of roughly .97 cents for each dollar of tax revenue provided. Florida’s incoming governor, Rick Scott, recently made headlines by calling for an end to public education and providing vouchers for families of up to $5280 to attend private school. Yet Florida spends $8,800 per pupil. The average cost for private schools per year is $8,549 while the median income is $24,543. Where do the families get this extra sum which amounts to more than 10% of their income? Does this not in effect, amount to a new tax? Mr. Scott’s inability to grasp the glaring problem of federal subsidies to private enterprise (eg the bank bailout) is further demonstrated by his involvement as a CEO in the largest (medicare) fraud settlement in U.S. History according to the Department of Justice.
Texas scores just under the national average of 5.17 at 4.67 on the HDI while its near neighbor Arizona manages 5.11 and takes 19 cents per dollar more from the U.S. Treasury than it pays. Perhaps that is why its Governor Jan Brewer (R) attracted attention from both parties recently for her statements that Arizona needs more Federal funds for Medicare. Gov. Brewer commented recently on her cuts to the state’s Health Care Cost Containment System, which have imperiled the lives of patients in need of an organ transplant. Brewer said that people branding the cuts as a real-life incarnation of death panels should be asking the federal government to send more money – a surprising position from someone who continues to oppose the The Affordable Health Care Act (AHCA) of 2010. As Think Progress points out, “AHCA would foot 100 percent of the bill for states to expand [Medicaid] until 2016 and 90 percent after 2020 for states that are able to maintain current eligibility levels in Medicaid and CHIP.” However, the Brewer Administration recently claimed that it had been forced to cut the transplant program because the health care reform overhaul had prevented the state from being able to save cash by making it harder to qualify for Medicaid. Go figure.
Brewer – who declined to hold a special session to reinstate the funds, a refusal that leaves some patients’ lives hanging in the balance – blames Arizona’s dire financial situation. (Apparently “death panels” aren’t such a big deal when a Republican is in charge.) She argues that if people are so worried about the transplant patients, they should ask the federal government for more money. A report from the Arizona Republic gives
some insight about how Brewer used stimulus funds, and clearly healthcare was not a priority for her. Whither the death panels, Governor Brewer?
All of the red tea party’s empty rhetoric about austerity (for the middle and lower classes, the rich need more tax breaks) needs to be viewed in the light of the past and future.
Aristotle wrote, “It is clear then that the best partnership in a state is one which operates through the middle people.”
The conscious effort by the founders to create this middle class defined American success and stability since the founding. But now, with more than 9 in 10 American families experiencing significant economic shocks year in and out, the middle class in the U.S. – and with it our nation’s future – is seriously endangered.
“Shaky Ground” , a recent study released by the Rockefeller Foundation and authored by Jacob Hacker and Mark Schlesinger of Yale University paints a grim picture of widespread economic insecurity in the era of the Great Recession.
The study concludes, “Economic insecurity has become the rule, not the exception, for many Americans — even in good times.” This report finds that between March 2008 and September 2009, fully 93 percent of American households saw substantial decreases to their wealth or income, or increases in emergency spending, often for medical needs. It further shows that the impact of those shocks was not confined to the working class. The report found that more than half of families making between $60,000 and $100,000 who experienced employment or medical disruptions weren’t able to meet minimum economic needs.
Importantly the study asserts that the recession — which officially lasted from December 2007 until June 2009 — exacerbated some of these economic woes, but that many were in place even before that. “Job-related concerns did increase dramatically during the recession,” Margot Brandenburg, an associate director of the Rockefeller Foundation, told The Lookout. “But other drivers of economic worry — wealth, medical needs, family-related issues — were very high before the recession, and they’ve remained high.”
This trend formed over the last three decades. In 1985, just 12 percent of Americans lived in households that saw a drop in available income of more than 25 percent from one year to the next. By 2009, it was 20 percent according to the report. Where does the shift come from? Why is economic insecurity the new normal? Brandenburg stated what many of us already realize: economic risk has gradually shifted away from corporations in recent years onto individuals through developments such as defined-contribution retirement and high-deductible insurance plans.
Professor Hacker, who authored “The Great Risk Shift” in 2006, argues that since last year’s “winner-take-all politics,” government policies have accelerated a shift that benefits the rich at the expense of the middle and working class. Brandenburg attributes growing economic insecurity to, “the hollowing out of the middle”. Increasingly, the sectors that produce the most jobs either pay high wages and require highly skilled workers, or pay low wages and require unskilled workers. By comparison, the sectors in the middle — manufacturing, technical support, and clerical work, for example – continue to evaporate. These members of the workforce find themselves replaced by cheaper foreign workers and machines.
It is difficult to see then, in light of the data and anecdotes above, how TEA Party and Right to Work states are valuable models for our nation and our civilization’s future. If workers cannot pool their risk via organized labor – much as insurers do with policy-holder liability – then the overwhelming majority of non-union workers will be at the mercy of resource-rich conglomerates and cartels when they are unfairly denied payment for services rendered. When citizens must stand alone in defending themselves against deep-pocketed polluters they find themselves in the same position. And this soon after the great crash of 2008, it is hardly necessary to point out that banking and other corporate and industrial concerns fail miserably at policing themselves.
Society does not need another instantiation of the TEA Party’s rehashed brand of laissez faire economics. That movie was called the Gilded Age, with all the familiar Upton Sinclair and Dickensian storylines: gussied up slave labor, excruciating poverty, and multi-generational tragedy in the lower classes. Nevertheless, 3D technicolor sequels to that movie are now playing in Red and TEA party states, not surprisingly, the data again tells a tragic story.
Looking forward in 2011, we must innovate away from the proven failures of these 19th century economic models. This does not require a revolutionary rejection of capitalism but rather its further refinement.
Early 21st century capitalism is succeeding only partially or pro tanto as J.K. Galbraith would say. Balancing social responsibility and sustainable economic practice has produced great success all across the Union. Within this framework, the world’s efforts to integrate sustainability into financial and industrial systems emerges as an obvious imperative, along with the rejection of loosely regulated 19th century style economic policy.
Not surprisingly, the data suggests that municipalities that value intelligent public sector-driven resource and pollution management systems will have healthier economies and ecologies than their deregulated neighbors. TEA party policies have already run their disastrous evolutionary course. Returning to them would be a giant and unnecessary leap backwards.
In the coming months at Fund Balance, we will be presenting some of the dawning precepts of the bright green future: policies, businesses and projects that build upon the lessons of the past, not its mistakes.
With Proposition 23 in California defeated, the hard and important work on Cap and Trade in the United States can begin again. Advancing the Western Climate Initiative (WCI) will be critical in building a framework in North America for Cap and Trade policy. “A cap-and-trade system is a market-based mechanism that uses market principles to achieve emissions reduction. A core component of a greenhouse gas cap-and-trade program is that an emitter must turn in one ‘allowance’ for every metric ton of carbon dioxide equivalent (CO2) that they emit.” As so defined on the WCI website. As the Great West and Canada agree, Cap and Trade is an important first step in creating a framework for Sustainable Finance initiatives.
Well-funded efforts aimed at shaping public discourse labeling Cap and Trade an “energy tax” obscure debate amongst voters in North America. Much of these funds come from abroad, from sources less interested in creating jobs in North America than extracting its resources. BP, for example, was generous in its contributions to the Tea Party. If it is a tax at all it is a Pollution Tax. Though it is much more a fee exercised on industries that withdraw essential resources from civilization and return them in degraded form. These resources are part of the public domain and when they are removed from the public trust and diminished, the public should be compensated.
And it is not axiomatic that green jobs and sustainable finance mean net job loss. Indeed, quite the opposite as California and China continue to demonstrate.
Major European financial institutions and policy making bodies lead in advancing Cap and Trade, as well as the broader goal of sustainable finance. Yet clearly there are coordinated European-based attempts to influence U.S. elections in favor of Pollution Rights advocates. A recent report used information from the Open Secrets.org database to track what it labeled Europe’s biggest polluters efforts to influence the U.S. midterm elections: “The European companies are funding almost exclusively Senate candidates who have been outspoken in their opposition to comprehensive climate policy in the US and candidates who actively deny the scientific consensus that climate change is happening and is caused by people.” This report lists BP, BASF, Bayer and Solvay as having made contributions.
Such funding is not restricted to European donations. A report by ThinkProgress, tracked donations to the U.S. Chamber of Commerce from a number of Indian and Middle Eastern oil, coal and electricity companies.
All the while much of the manufactured hysteria about Cap and Trade systems misses the real point. Market based efforts to curb pollution, combat acid rain, and offset global warming, represent merely incremental steps towards sustainable economies and finance. Limited supplies of accessible Carbon will be needed for much more than just fuel. Hence society will need to prioritize its usage and deployment.
There is also another side to the proverbial coin of foreign efforts to hinder Cap and Trade. As Thomas Friedman notes in WikiChina in writing a fictional cable from U.S. based Chinese diplomats back to Beijing: “Most of the Republicans just elected to Congress do not believe what their scientists tell them about man-made climate change. America’s politicians are mostly lawyers — not engineers or scientists like ours — so they’ll just say crazy things about science and nobody calls them on it. It’s good. It means they will not support any bill to spur clean energy innovation, which is central to our next five-year plan. And this ensures that our efforts to dominate the wind, solar, nuclear and electric car industries will not be challenged by America.”
So while China continues to dump Carbon on the US, it is quickly consolidating its lead in some of the most lucrative technology and financial markets for the coming decades. One could be forgiven in wondering if they too, might have an interest in keeping the US electorate in the dark about Cap and Trade and sustainable finance. As per our last post, George Schultz’s business thesis may have more facets than meet the eye as well.