Two Americans win Nobel Economics prize on Climate Change work

Per an article this morning in Reuters, “Americans William Nordhaus and Paul Romer, pioneers in adapting economic theory to take better account of environmental issues and technological progress, shared the 2018 Nobel Economics Prize on Monday.”

Romer, with New York University, and Nordhaus, with Yale, developed models on the economic impact of dealing with climate change. Reuters cited the Nobel Academy in Stockholm, “‘Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge.'”

This news is important as Americans still provide global leadership inspite of the dearth of leadership in the White House and EPA. America is moving forward on renewable energy, but our efforts are in spite of the absence and antagonistic actions of federal leadership. Arguably, more than any other issue, voters must ask their candidates where the stand on climate change actions and protecting the environment.

It is interesting that this came today as the headline article in The Charlotte Observer is “NC Leaders share concern about climate change.” These are 60 business, advocacy, former government and university leaders who have been brought together to speak to various problems. 45 of them responded to the question of climate change and, of the 45, only two naysayed climate change – one called it a hoax, while the other said it is real, but the jury is out on man’s influence. Think about that – 43 out of 45 define the problem and offer solutions.

Per these leaders, ideas include ceasing building on lands prone to flooding. NC has had two 500 year floods in two years, the same with Houston, Texas. Miami may be inescapably lost to continued flooding due to rising seas and porous limestone. The term we must understand as well is “sunny day flooding,” which happens more and more throughout the year.

These Nobel prize winners note we have to address the problem now while the costs are more manageable and can be sustained. The best teachers are the Dutch, as they have managed sea water encroachment for years. But, the impact also includes more and intense forest fires and the faster depletion of already dear water sources.

We have major problems occurring that Washington is not talking about and, in some cases, is making it worse. We must address climate change and invest more in  renewable energy, consider better coastal and flood plain building and consider a carbon tax. We must address fresh water loss that is hastened by climate change that is affecting farmers and other Americans. And, we must address pollution by companies and the growing mountain of plastic.

There are economic models that call to mind the old Fram oil filter commercial – you can pay me now or pay me later. Now, is far cheaper. Ask your politicians more questions and vote accordingly. If they do not admit there are problems, do not vote for them.

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Walmart and Mars

What does this title mean, you ask? Walmart and Mars are two global companies moving the ball forward to combat climate change. Mind you, it is not just altruism driving these efforts, it is creating a sustainable, more predictable and better cost model. And, companies care about cost.

On PBS Newshour yesterday, an update on an earlier story was provided.  Walmart has a goal of being 100% renewable energy powered which they established a decade ago under CEO Scott Lee. They started simply, retraining their truck drivers on better ways to shift gears and drive to save fuel costs and actually measure fuel efficiency in truck driver performance.

Walmart also is converting their 12,000 stores to renewable energy. The PBS Newhour update noted that almost 500 stores in the US have been converted to solar power. Now, 28% of their US energy needs comes from solar energy. Retail stores have a lot of roof space, so companies like Walmart and IKEA have growing numbers of solar powered stores. They are also asking their suppliers to be better environmental stewards.

Mars is known for its candy, the biggest seller being M&Ms. Their goal is to make decisions that are “good for the environment and good for Mars,” They are using combinations of solar and wind energy to power their manufacturing plants. They just rolled out a new wind farm in Texas, a state that produces more wind energy than any other. Mars has noted their costs are lower with the renewable energy.

Fortunately, Walmart and Mars are not alone. Google, Facebook and Amazon are driving forces behind renewable energy given their significant data and distribution center power needs. Their centers in North Carolina are a reason NC ranks so highly on solar energy lists.

Yet, we should not lose sight that the cost of renewable energy has decreased so greatly, the decision is not just environmental, it is economic. Paula Diparno of CDP said on PBS Newshour that addressing climate change is “no longer a punishment, it is an opportunity.”

That is a huge shift in mindset. She added that there are three stakeholders for companies – customers, shareholders and management. Customers are noticing, shareholders are becoming more insistent and management better be paying attention. To this end, Blackrock, a major institutional investor, is requiring its companies to define what they are doing about renewable energy and climate change.

To this end, because of Blackrock’s efforts, Exxon Mobil’s shareholders voted last year to require management to do more and report back on addressing climate change. Ironically, this vote was the day before the current US President announced that he was withdrawing from the Paris Climate Change Accord. That contrast speaks volumes.

 

Two interesting climate change stories

In the sea of news about all things Trump, we lose sight of other things going on. Two stories caught my eye this week about climate change that deserve more oxygen, pun intended. On Monday, The Charlotte Observer published a front page story called “Rising sea erodes property values at beaches.”

Per the Observer, “Scientists have found that $7.4 billion was lost in home values across North Carolina, South Carolina, Virginia, Georgia and Florida because of sea level rise flooding from 2005 to 2017.

“Scientists at First Street Foundation – a technology nonprofit dedicated to increasing awareness of seal level rise – used data from the National Oceanic and Atmospheric Administration, US Geological Survey, local governments, the National Weather Service and the US Army Corps of Engineers to estimate flood risks.”

The “peer reviewed” study showed 616,626 homes lost value during this time. Per the Observer, “The study is the first of its kind to show depreciation of homes values has already taken place in the United States…” The article noted this is a concern to not only the homeowners, but the municipalities and counties where property taxes have (and will) decline through reevaluation.

Last week, an article in Yahoo Finance called “Kids around the world are suing governments over climate change – and it’s working,” it was noted the US Ninth Circuit Court of Appeals allowed a US lawsuit to move ahead.

As reported in Yahoo, “Back in 2015, a group of 21 young Americans decided to sue the US government over climate change. In Juliana v. US, the plaintiffs argue that the government has violated ‘the youngest generation’s constitutional rights to life, liberty, and property’ by adopting policies that promote the use of fossil fuels—despite the knowledge that carbon dioxide emissions are a primary cause of global warming.

“That might sound like an extreme claim. But in the years since, the lawsuit has kept succeeding against all odds. The Ninth Circuit Court of Appeals on July 20 denied the Trump administration’s attempt to dismiss the suit, and the case remains set for trial 0n October 29.” Yahoo notes the plaintiffs range in age from 11 to 22.

These two stories stand on their own. The first confirms with peer reviewed data, climate change is impacting coastal properties now and has been for at least twelve years. This is not a future thing. Most of this burden has been borne by the state of Florida, which is interesting as their governor forbid his staff from mentioning the words climate change or global warming in speeches or articles.

The second says these kids get it. The US government is lax on doing definitive measures and planning to address climate change. I am reminded of the multi-partisan plan developed by Denmark to address climate change impact over the long term, as it had to last beyond the current leadership. The kids have gotten to the next step with the Ninth Circuit Court saying their case has merit. Well done to all. It is sad the kids have to resort to this kind of measure when adult leaders fail to act or accept funding based on them not acting.

Two experts raise concern over US treatment of allies and tariffs

I watched two separate interviews, one last week on PBS Newshour with a representative of the Council on Foreign Relations and one this morning on CBS Morning News with Ian Bremmer, the head of The Eurasia Group. I felt they both framed the issues and concerns very neatly.

The former noted while Trump has accurately raised concern over China and their pilfering of intellectual capital and trade deficits, he does not have a coherent strategy. It was noted that his tactics are less than effective, especially since this issue affects our G7 allies. It would be far better to work in tandem with our allies to put pressure on China, rather than place tariffs on them as well. He also noted the World Trade Organization has several levers that could be deployed to help with this effort.

As for the lack of coherence, Trump rightfully noted the intellectual capital is the greater concern, but said if China bought more goods from the US, that would be enough. If your biggest issue is theft of intellectual capital, buying more goods does not address that issue.

As for Bremmer, he has interviewed representatives of the G7 who attended the less than fruitful summit in Canada. He said the other members outside of the US all noted the relationship with the US is very far from the “10” that Trump assigned to it. He noted that between Merkel and Trump, it is about as dysfunctional as it gets. He added that other G7 countries worry that Trump has fewer reasonable voices advising him, so there is no one to reach out to that will get in the President’s ear.

What will come out as the Starburst Outburst, after the famous picture with leaders imploring Trump, he stood and agreed to sign a cooperation agreement that staff worked on until 3 am, including Larry Kudlow of the US. Then he reached into his pocket and grabbed two Starburst candies and threw them on the table saying “Angela, don’t say I never gave you anything.” This is about as demeaning as it gets, rivaling his refusal to shake her hand in the oval office.

The picture will be in future history books as a milepost of when the US turned its back on its allies. It will be in the section entitled “When the US ceded its global leadership position.” It is compilation of things that make me say this, not just the ill-advised tariffs.

They include: pulling out of an Asia-Pacific trade deal that went through without the US, announcing the pull out of the Paris Climate Change Accord, ignoring the pleas of allies to pull out of the Iran nuclear deal, pulling out of the United Nations Human Rights council, separating children from parents at the border and adding more demands after a NAFTA deal was crafted. Then, there is the bullying, lying to and lying about our allies. Shoving the Macedonia President out of the way is as good a metaphor as any.

The United States is becoming a pariah under Trump. Until the so-called Republican leaders acknowledge this, we will continue to be such. How low must we go?

 

Pope is at it again

Last week, Pope Francis again revealed why he is a global leader. Leveraging the biblical teachings that God wants us to take care of our environment, he reiterated his concerns on climate change to oil executives. Per a Wall Street Journal article called “Pope Francis Criticizes Continued Search for Fossil Fuels at Meeting with Oil Executives,” he encouraged oil executives to find ways to leave fossil fuel energy in the ground. Per the WSJ article:

“’Civilization requires energy, but energy use must not destroy civilization!’ he said at a Vatican climate change conference attended by top executives including Exxon Mobil Corp. Chief Executive Darren Woods, BP PLC Chief Executive Bob Dudley and BlackRock Inc. Chief Executive Laurence Fink.

At the conference, co-sponsored by the University of Notre Dame and featuring nearly 20 speakers Friday and Saturday, the pope said that an estimated 1 billion people still lack electricity and noted that access to energy is an essential resource for escaping poverty. But he warned that a failure to reduce the use of fossil fuels would lead to a ‘spiral of extreme climate changes due to a catastrophic rise in global temperatures, harsher environments and increased levels of poverty.’

The poor ‘suffer most from the ravages of global warming,’ he said, through water shortages and extreme weather which in turn drive mass migration, among other ways.
Pope Francis commended oil and gas companies for adopting policies that account for ‘assessment of climate risk’ and he encouraged the practice of environmentally sensitive ‘green finance’ investment strategies. But he warned that ‘markets and technology’ wouldn’t be sufficient to stop climate change, since our ‘current economic system thrives on ever-increasing extraction, consumption and waste.’

Earlier this year, BlackRock’s Mr. Fink in a letter urged chief executives at global companies to ‘make a positive contribution to society.’ The world’s largest asset manager has played a key role behind the scenes in insisting that companies take action to respond to climate change.

Pope Francis’ meeting with oil executives and investors comes almost exactly three years after the publication of his encyclical Laudato Si’, in which he called global warming a major threat to life on the planet and said it is mainly caused by human activity. In that document, which as an encyclical ranks among the highest levels of papal teaching, the pope blamed special interests for blocking policy responses and indicted the market economy for plundering the Earth at the expense of the poor and future generations.”

With the US President announcing his intention to leave the Paris Climate Change Accord, other global leaders, like Pope Francis are continuing the push. Ironically, Exxon Mobil’s shareholders voted (the day before Trump’s announcement to leave the Accord) to obligate the company leadership to inform them of what they are doing to address climate change. Fortunately, US cities, states and businesses are picking up the baton dropped by the President. The US has passed the tipping point on renewable energy, in spite of the President and his EPA head’s efforts.

Pope Francis should be commended for leading the charge. Taking care of the least of us has been a mantra of this leader. I recognize he is not perfect, but is concern for people and the environment is meritorious. And, unlike Messrs. Trump and Pruitt, the pope is a scientist, with a Masters in Chemistry and has worked as a chemist.

While Trump distracts, Pruitt pees in our swimming pool

One of my greatest fears of this President going in has been a retrenchment on dealing with climate change and environmental protections. While other concerns have surfaced on his watch, my initial fears are warranted. Selecting Scott Pruitt, a state attorney general who has sued the EPA multiple times, is not conducive to protecting the environment.

Announcing the future pull out of the Paris Climate Change Accord was an ominous step. Taking climate change science information off the EPA website is another. Reshuffling climate change scientists to less productive positions is another.

Yet there is more. Allowing coal companies  to dump pollutants in our waterways is a metaphor for the new EPA. Pruitt is letting people pee in our pool. And, just this week, there are two announcements worth noting.

First, The Huffington Post has reported an internal memo from a direct report to Pruitt  that tells EPA people to play down the science behind the climate change conclusions. This is not dissimilar to the governors of Wisconsin and Florida telling their staffs they could not use the terms climate change and global warming in dealing with the public. And, it is not dissimilar to George W. Bush’s Council on the Environment altering reports that used the words global warming or climate change.

Second, it is reported that the miles per gallon requirements placed on new cars introduced by President Obama will be rolled back. US car companies celebrate the announcement, but the environment and people will suffer. And, what is not discussed, our auto industry will fall behind as foreign car companies will move ahead with better mpg requirements. It should be noted, twelve states are prepared to sue the EPA on this change should it go through, one being California.

Pruitt is supposed to be the leader of the EPA. His people have to be one demoralized group to see a man who obviously cares less about the environment, let industry pollute more. Yet,  on a bright note, cities, states and businesses are moving climate change and environmental issues forward, more than picking up the slack caused by this anemic administration.

 

 

Water – the real crisis facing us

While Americans are distracted and consumed by the routine chaos out of the White House, we are letting huge problems go unaddressed. One of the major problems is the current and growing global water crisis. For several years, the World Economic Forum has voted the global water crisis as the greatest risk facing our planet over the longer term, defined as ten years. But, this is not just a future problem, the city of Cape Town in South Africa is in severe water crisis and continues to ration pushing forward their Day Zero as long as they can

Per The Guardian in an article this week, the United Nations warns that water shortages “could affect 5 billion people by 2050 due to climate change, increased demand and polluted supplies, according to a UN report on the state of the world’s water. The comprehensive annual study warns of conflict and civilisational threats unless actions are taken to reduce the stress on rivers, lakes, aquifers, wetlands and reservoirs.

The World Water Development Report – released in drought-hit Brasília – says positive change is possible, particularly in the key agricultural sector, but only if there is a move towards nature-based solutions that rely more on soil and trees than steel and concrete.

‘For too long, the world has turned first to human-built, or ‘grey’, infrastructure to improve water management. In doing so, it has often brushed aside traditional and indigenous knowledge that embraces greener approaches,’ says Gilbert Houngbo, the chair of UN Water, in the preface of the 100-page assessment. ‘In the face of accelerated consumption, increasing environmental degradation and the multi-faceted impacts of climate change, we clearly need new ways of manage competing demands on our freshwater resources.’

Humans use about 4,600 cubic km of water every year, of which 70% goes to agriculture, 20% to industry and 10% to households, says the report, which was launched at the start of the triennial World Water Forum. Global demand has increased sixfold over the past 100 years and continues to grow at the rate of 1% each year.

This is already creating strains that will grow by 2050, when the world population is forecast to reach between 9.4 billion and 10.2 billion (up from 7.7 billion today), with two in every three people living in cities.

Demand for water is projected to rise fastest in developing countries. Meanwhile, climate change will put an added stress on supplies because it will make wet regions wetter and dry regions drier.

Drought and soil degradation are already the biggest risk of natural disaster, say the authors, and this trend is likely to worsen. ‘Droughts are arguably the greatest single threat from climate change,’ it notes. The challenge has been most apparent this year in Cape Town, where residents face severe restrictions as the result of a once-in-384-year drought. In Brasília, the host of the forum, close to 2m people have their taps turned off once in every five days due to a unusually protracted dry period.”

Here in the states, we exacerbate our drought and other water problems with bad piping and fracking, which waste or use huge amounts of water. But, with our vast agriculture, we need water to produce our and much of the world’s crops. We must manage it better. Two books are very illuminating. “Water: The Epic Struggle for Wealth, Power, and Civilization” by Steven Solomon is a terrific look back and ahead. He is the coiner of the phrase “water is the new oil.” The other book is called “Rancher, Farmer, Fisherman” by Miriam Horn that details the struggles of these professions and two others with climate change and its impact on water and other things they do.

Folks, this is a major problem. We must address it now before we all have our own Day Zeroes. If this is not enough to raise concern, one of the financial experts who forewarned us of the pending financial crisis, has a new concern – water.