2 august 2012

Global Warming's Terrifying New Math - Part II

Three simple numbers that add up to global catastrophe - and that make clear who the real enemy is

by Bill McKibben, Rolling Stone, August 2, 2012

So: the paths we have tried to tackle global warming have so far produced only gradual, halting shifts. A rapid, transformative change would require building a movement, and movements require enemies. As John F. Kennedy put it, "The civil rights movement should thank God for Bull Connor. He's helped it as much as Abraham Lincoln." And enemies are what climate change has lacked.

But what all these climate numbers make painfully, usefully clear is that the planet does indeed have an enemy – one far more committed to action than governments or individuals. Given this hard math, we need to view the fossil-fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization. "Lots of companies do rotten things in the course of their business – pay terrible wages, make people work in sweatshops – and we pressure them to change those practices," says veteran anti-corporate leader Naomi Klein, who is at work on a book about the climate crisis. "But these numbers make clear that with the fossil-fuel industry, wrecking the planet is their business model. It's what they do."

According to the Carbon Tracker report, if Exxon burns its current reserves, it would use up more than seven percent of the available atmospheric space between us and the risk of two degrees. BP is just behind, followed by the Russian firm Gazprom, then Chevron, ConocoPhillips and Shell, each of which would fill between three and four percent. Taken together, just these six firms, of the 200 listed in the Carbon Tracker report, would use up more than a quarter of the remaining two-degree budget. Severstal, the Russian mining giant, leads the list of coal companies, followed by firms like BHP Billiton and Peabody. The numbers are simply staggering – this industry, and this industry alone, holds the power to change the physics and chemistry of our planet, and they're planning to use it.

They're clearly cognizant of global warming – they employ some of the world's best scientists, after all, and they're bidding on all those oil leases made possible by the staggering melt of Arctic ice. And yet they relentlessly search for more hydrocarbons – in early March, Exxon CEO Rex Tillerson told Wall Street analysts that the company plans to spend $37 billion a year through 2016 (about $100 million a day) searching for yet more oil and gas.

There's not a more reckless man on the planet than Tillerson. Late last month, on the same day the Colorado fires reached their height, he told a New York audience that global warming is real, but dismissed it as an "engineering problem" that has "engineering solutions." Such as? "Changes to weather patterns that move crop-production areas around – we'll adapt to that." This in a week when Kentucky farmers were reporting that corn kernels were "aborting" in record heat, threatening a spike in global food prices. "The fear factor that people want to throw out there to say, 'We just have to stop this,' I do not accept," Tillerson said. Of course not – if he did accept it, he'd have to keep his reserves in the ground. Which would cost him money. It's not an engineering problem, in other words – it's a greed problem.

You could argue that this is simply in the nature of these companies – that having found a profitable vein, they're compelled to keep mining it, more like efficient automatons than people with free will. But as the Supreme Court has made clear, they are people of a sort. In fact, thanks to the size of its bankroll, the fossil-fuel industry has far more free will than the rest of us. These companies don't simply exist in a world whose hungers they fulfill – they help create the boundaries of that world.

Left to our own devices, citizens might decide to regulate carbon and stop short of the brink; according to a recent poll, nearly two-thirds of Americans would back an international agreement that cut carbon emissions 90 percent by 2050. But we aren't left to our own devices. The Koch brothers, for instance, have a combined wealth of $50 billion, meaning they trail only Bill Gates on the list of richest Americans. They've made most of their money in hydrocarbons, they know any system to regulate carbon would cut those profits, and they reportedly plan to lavish as much as $200 million on this year's elections. In 2009, for the first time, the U.S. Chamber of Commerce surpassed both the Republican and Democratic National Committees on political spending; the following year, more than 90 percent of the Chamber's cash went to GOP candidates, many of whom deny the existence of global warming. Not long ago, the Chamber even filed a brief with the EPA urging the agency not to regulate carbon – should the world's scientists turn out to be right and the planet heats up, the Chamber advised, "populations can acclimatize to warmer climates via a range of behavioral, physiological and technological adaptations." As radical goes, demanding that we change our physiology seems right up there.

Environmentalists, understandably, have been loath to make the fossil-fuel industry their enemy, respecting its political power and hoping instead to convince these giants that they should turn away from coal, oil and gas and transform themselves more broadly into "energy companies." Sometimes that strategy appeared to be working – emphasis on appeared. Around the turn of the century, for instance, BP made a brief attempt to restyle itself as "Beyond Petroleum," adapting a logo that looked like the sun and sticking solar panels on some of its gas stations. But its investments in alternative energy were never more than a tiny fraction of its budget for hydrocarbon exploration, and after a few years, many of those were wound down as new CEOs insisted on returning to the company's "core business." In December, BP finally closed its solar division. Shell shut down its solar and wind efforts in 2009. The five biggest oil companies have made more than $1 trillion in profits since the millennium – there's simply too much money to be made on oil and gas and coal to go chasing after zephyrs and sunbeams.

Much of that profit stems from a single historical accident: Alone among businesses, the fossil-fuel industry is allowed to dump its main waste, carbon dioxide, for free. Nobody else gets that break – if you own a restaurant, you have to pay someone to cart away your trash, since piling it in the street would breed rats. But the fossil-fuel industry is different, and for sound historical reasons: Until a quarter-century ago, almost no one knew that CO2 was dangerous. But now that we understand that carbon is heating the planet and acidifying the oceans, its price becomes the central issue.

If you put a price on carbon, through a direct tax or other methods, it would enlist markets in the fight against global warming. Once Exxon has to pay for the damage its carbon is doing to the atmosphere, the price of its products would rise. Consumers would get a strong signal to use less fossil fuel – every time they stopped at the pump, they'd be reminded that you don't need a semimilitary vehicle to go to the grocery store. The economic playing field would now be a level one for nonpolluting energy sources. And you could do it all without bankrupting citizens – a so-called "fee-and-dividend" scheme would put a hefty tax on coal and gas and oil, then simply divide up the proceeds, sending everyone in the country a check each month for their share of the added costs of carbon. By switching to cleaner energy sources, most people would actually come out ahead.

There's only one problem: Putting a price on carbon would reduce the profitability of the fossil-fuel industry. After all, the answer to the question "How high should the price of carbon be?" is "High enough to keep those carbon reserves that would take us past two degrees safely in the ground." The higher the price on carbon, the more of those reserves would be worthless. The fight, in the end, is about whether the industry will succeed in its fight to keep its special pollution break alive past the point of climate catastrophe, or whether, in the economists' parlance, we'll make them internalize those externalities.

It's not clear, of course, that the power of the fossil-fuel industry can be broken. The U.K. analysts who wrote the Carbon Tracker report and drew attention to these numbers had a relatively modest goal – they simply wanted to remind investors that climate change poses a very real risk to the stock prices of energy companies. Say something so big finally happens (a giant hurricane swamps Manhattan, a megadrought wipes out Midwest agriculture) that even the political power of the industry is inadequate to restrain legislators, who manage to regulate carbon. Suddenly those Chevron reserves would be a lot less valuable, and the stock would tank. Given that risk, the Carbon Tracker report warned investors to lessen their exposure, hedge it with some big plays in alternative energy.

"The regular process of economic evolution is that businesses are left with stranded assets all the time," says Nick Robins, who runs HSBC's Climate Change Centre. "Think of film cameras, or typewriters. The question is not whether this will happen. It will. Pension systems have been hit by the dot-com and credit crunch. They'll be hit by this." Still, it hasn't been easy to convince investors, who have shared in the oil industry's record profits. "The reason you get bubbles," sighs Leaton, "is that everyone thinks they're the best analyst – that they'll go to the edge of the cliff and then jump back when everyone else goes over."

So pure self-interest probably won't spark a transformative challenge to fossil fuel. But moral outrage just might – and that's the real meaning of this new math. It could, plausibly, give rise to a real movement.

Once, in recent corporate history, anger forced an industry to make basic changes. That was the campaign in the 1980s demanding divestment from companies doing business in South Africa. It rose first on college campuses and then spread to municipal and state governments; 155 campuses eventually divested, and by the end of the decade, more than 80 cities, 25 states and 19 counties had taken some form of binding economic action against companies connected to the apartheid regime. "The end of apartheid stands as one of the crowning accomplishments of the past century," as Archbishop Desmond Tutu put it, "but we would not have succeeded without the help of international pressure," especially from "the divestment movement of the 1980s."

The fossil-fuel industry is obviously a tougher opponent, and even if you could force the hand of particular companies, you'd still have to figure out a strategy for dealing with all the sovereign nations that, in effect, act as fossil-fuel companies. But the link for college students is even more obvious in this case. If their college's endowment portfolio has fossil-fuel stock, then their educations are being subsidized by investments that guarantee they won't have much of a planet on which to make use of their degree. (The same logic applies to the world's largest investors, pension funds, which are also theoretically interested in the future – that's when their members will "enjoy their retirement.") "Given the severity of the climate crisis, a comparable demand that our institutions dump stock from companies that are destroying the planet would not only be appropriate but effective," says Bob Massie, a former anti-apartheid activist who helped found the Investor Network on Climate Risk. "The message is simple: We have had enough. We must sever the ties with those who profit from climate change – now."

Movements rarely have predictable outcomes. But any campaign that weakens the fossil-fuel industry's political standing clearly increases the chances of retiring its special breaks. Consider President Obama's signal achievement in the climate fight, the large increase he won in mileage requirements for cars. Scientists, environmentalists and engineers had advocated such policies for decades, but until Detroit came under severe financial pressure, it was politically powerful enough to fend them off. If people come to understand the cold, mathematical truth – that the fossil-fuel industry is systematically undermining the planet's physical systems – it might weaken it enough to matter politically. Exxon and their ilk might drop their opposition to a fee-and-dividend solution; they might even decide to become true energy companies, this time for real.

Even if such a campaign is possible, however, we may have waited too long to start it. To make a real difference – to keep us under a temperature increase of two degrees – you'd need to change carbon pricing in Washington, and then use that victory to leverage similar shifts around the world. At this point, what happens in the U.S. is most important for how it will influence China and India, where emissions are growing fastest. (In early June, researchers concluded that China has probably under-reported its emissions by up to 20 percent.) The three numbers I've described are daunting – they may define an essentially impossible future. But at least they provide intellectual clarity about the greatest challenge humans have ever faced. We know how much we can burn, and we know who's planning to burn more. Climate change operates on a geological scale and time frame, but it's not an impersonal force of nature; the more carefully you do the math, the more thoroughly you realize that this is, at bottom, a moral issue; we have met the enemy and they is Shell.

Meanwhile the tide of numbers continues. The week after the Rio conference limped to its conclusion, Arctic sea ice hit the lowest level ever recorded for that date. Last month, on a single weekend, Tropical Storm Debby dumped more than 20 inches of rain on Florida – the earliest the season's fourth-named cyclone has ever arrived. At the same time, the largest fire in New Mexico history burned on, and the most destructive fire in Colorado's annals claimed 346 homes in Colorado Springs – breaking a record set the week before in Fort Collins. This month, scientists issued a new study concluding that global warming has dramatically increased the likelihood of severe heat and drought – days after a heat wave across the Plains and Midwest broke records that had stood since the Dust Bowl, threatening this year's harvest. You want a big number? In the course of this month, a quadrillion kernels of corn need to pollinate across the grain belt, something they can't do if temperatures remain off the charts. Just like us, our crops are adapted to the Holocene, the 11,000-year period of climatic stability we're now leaving... in the dust.

This story is from the August 2nd, 2012 issue of Rolling Stone.

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