Cheap energy results in massive profits in this merry-go-round.
Coal plant expansion wipes out Indonesia's green energy progress
This story by Norman Harsono appears today in The Jakarta Post (Wed, January 22, 2020):
Indonesia has launched the operation of its largest coal-fired power unit to date, which offset all renewable energy power progress in the Southeast Asian country last year.
Java 7 Unit 1, launched in December 2019, is over twice as powerful as all renewable energy plants launched the same year. The Banten-based plant has a capacity of 1,000 megawatts (MW), 2.7 times greater than the 376MW worth of green energy plants introduced in Indonesia last year.
The plant’s majority owner, Beijing-based coal miner China Energy Investment Corporation, described it as “the largest individual installed capacity of any overseas thermal generation unit invested and built by a Chinese enterprise.”
China Energy cooperated with Surabaya-based power producer Pembangkitan Jawa Bali (PJB), a subsidiary of state-owned utility firm PLN, to develop the US$1.71 billion power plant. China Energy and OJB own 70 and 30 percent of the facility, respectively.
The expansion of coal plants such as Java 7 continues to outstrip renewable energy growth, thus setting Indonesia back from achieving its green energy ambitions. Southeast Asia’s largest economy ended 2019 with a 12.36 percent renewables power production mix, far from the 17.5 percent target stipulated in the General National Energy Planning (RUEN) road map.
Ten coal plants began operations last year alone, according to the Energy and Mineral Resources Ministry. The plants – including Java 7 – have a combined capacity of 3,017MW. They not only outstripped renewables growth but also contributed almost three-fourths of all newly added power production in 2019.
“It's rather unfortunate that the government relies on coal as the answer to both economy and energy challenges, when it is actually a golden opportunity to look toward renewable energy as the answer,” said Anissa Suharsono, an energy policy analyst with the Canadian energy think tank International Institute for Sustainable Development (IISD).
Energy and Mineral Resources Ministry and PLN representatives defended the coal-based investment as a means of quickly fulfilling Indonesia’s growing energy needs. The government aims to have 30,000MW worth of new power plants operational by 2028.
“This plant can support peak loads in the Java Bali grid, which grows every year. It was 28,000 MW this year, up from 27,000MW last year,” said ministry spokesman Agung Pribadi.
He added in a statement that the plant’s second 1,000MW unit was expected to come online in 2021. At 2,000MW, the Java 7 plant would consume around 7 million tons of coal each year.
Coal is considered ideal to fullfil Indonesia’s energy needs because of its abundance. The government also guarantees the fuel’s competitiveness by capping domestic selling prices through annually reviewed Domestic Market Obligation (DMO) policies. The latest DMO requires coal miners to sell 25 percent of their production domestically at a maximum of US$70 per ton.
PLN spokesman Dwi Suryo Abdullah told The Jakarta Post that the plant was built to “anticipate a spike in energy needs” in the economic centers of Java and Bali while also “maintaining competitive prices, given the scale of the units”
Indonesia has launched the operation of its largest coal-fired power unit to date, which offset all renewable energy power progress in the Southeast Asian country last year.
Java 7 Unit 1, launched in December 2019, is over twice as powerful as all renewable energy plants launched the same year. The Banten-based plant has a capacity of 1,000 megawatts (MW), 2.7 times greater than the 376MW worth of green energy plants introduced in Indonesia last year.
The plant’s majority owner, Beijing-based coal miner China Energy Investment Corporation, described it as “the largest individual installed capacity of any overseas thermal generation unit invested and built by a Chinese enterprise.”
China Energy cooperated with Surabaya-based power producer Pembangkitan Jawa Bali (PJB), a subsidiary of state-owned utility firm PLN, to develop the US$1.71 billion power plant. China Energy and OJB own 70 and 30 percent of the facility, respectively.
The expansion of coal plants such as Java 7 continues to outstrip renewable energy growth, thus setting Indonesia back from achieving its green energy ambitions. Southeast Asia’s largest economy ended 2019 with a 12.36 percent renewables power production mix, far from the 17.5 percent target stipulated in the General National Energy Planning (RUEN) road map.
Ten coal plants began operations last year alone, according to the Energy and Mineral Resources Ministry. The plants – including Java 7 – have a combined capacity of 3,017MW. They not only outstripped renewables growth but also contributed almost three-fourths of all newly added power production in 2019.
“It's rather unfortunate that the government relies on coal as the answer to both economy and energy challenges, when it is actually a golden opportunity to look toward renewable energy as the answer,” said Anissa Suharsono, an energy policy analyst with the Canadian energy think tank International Institute for Sustainable Development (IISD).
Energy and Mineral Resources Ministry and PLN representatives defended the coal-based investment as a means of quickly fulfilling Indonesia’s growing energy needs. The government aims to have 30,000MW worth of new power plants operational by 2028.
“This plant can support peak loads in the Java Bali grid, which grows every year. It was 28,000 MW this year, up from 27,000MW last year,” said ministry spokesman Agung Pribadi.
He added in a statement that the plant’s second 1,000MW unit was expected to come online in 2021. At 2,000MW, the Java 7 plant would consume around 7 million tons of coal each year.
Coal is considered ideal to fullfil Indonesia’s energy needs because of its abundance. The government also guarantees the fuel’s competitiveness by capping domestic selling prices through annually reviewed Domestic Market Obligation (DMO) policies. The latest DMO requires coal miners to sell 25 percent of their production domestically at a maximum of US$70 per ton.
PLN spokesman Dwi Suryo Abdullah told The Jakarta Post that the plant was built to “anticipate a spike in energy needs” in the economic centers of Java and Bali while also “maintaining competitive prices, given the scale of the units”
In comparison, bankability problems were “the main issue” for renewable energy projects last year, according to Jakarta-based energy think tank Institute for Essential Services Reform (IESR). Such problems arise from ministerial regulations No. 10/2017 and No. 50/2017 that add bureaucratic red tape to renewables development.
“Several power producers managed to secure financing and reach financial close due to their strong project sponsors. For small power producers, however, it is more difficult to get funding as they usually do not have creditworthy sponsors,” writes the think tank in its latest annual report.
At 1,000MW, Java 7 Unit 1 is the largest operating coal-fired unit in Indonesia, taking over the title from the 815 MW Unit 3 of the Paiton III plant in East Java
For China Energy, Java 7 also represented a strengthening of the two countries' economic ties. The company said the plant was part of “promoting the alignment of China’s Belt and Road Initiative and Indonesia’s Global Maritime Fulcrum.”
China, which was Indonesia’s second-largest foreign investor last year, is among many major economies including the US and the Middle East being approached by Indonesia to finance $137 billion worth of infrastructure projects, most of which are energy-related.
The LODE - Zone line girds the planet - Philip Courtenay on Vimeo.
This is Re:LODE Radio territory! Java is bisected by the LODE Zone Line!
China's economic and political agendas have an increasing influence in determining the short term policies of the political classes and business interests in Indonesia and other South East Asian economies. Making a quick profit from the exploitation of natural resources, often shrouded in illegality and political corruption, is a fact that, in turn, capitalism will further amplify. As a state actor, China's rate of economic growth needs to be maintained at levels that require the burning of coal, to sustain social and political stability. This short-term imperative means that, even though China's political class is not governed by neo-liberal ideology and market oriented economics, the appeals of cheap energy, cheap nature, cheap work, cheap money, cheap food, cheap care and cheap lives, are equivalent drivers policy to those found in a globalized economy.
A History of the World in Seven Cheap Things
This is the title of a book by Raj Patel and Jason W. Moore, Verso 2018. In his review of this work for the Freedom Bookshop John Fullerton writes:
Welcome to the Capitalocene. Humans, at least some of them, are killing everything, from megafauna to microbiota, at speeds one hundred times faster than the background rate. The scale of destruction can’t be simply extrapolated from the excesses of our knuckle-dragging forebears. What has really changed since the 1400s is capitalism – and this is what the book is about: showing how the modern world has been made through seven cheap things – nature, money, work, care, food, energy, and lives.
Short term profits rule! Never mind long term consequences!
Sixth Tone is an online magazine owned by the Shanghai United Media Group, and a sister site to The Paper. Its intended readership is people in Western countries. Sixth Tone and The Paper use the same resources. It is not an official publication of the Communist Party of China.
The publication's name refers to an ideal of expanding beyond traditionally-reported items in Anglophone media; Mandarin Chinese has four active tones and a fifth dropped tone that has less prominence than the other four.
In December 2018 the article; China's Carbon Footprint Swells to Record Size; referenced a report that contradicted China’s Ministry of Science and Technology that the increasing speed of China’s annual emissions was slowing and had plateaued from 2013 to 2017:
Carbon dioxide emissions from fossil fuel burning — the primary cause of climate change — will grow for a second consecutive year in 2018, according to a new report predicting that China’s emissions will increase by 4.7 percent. Emissions from China, India, and the United States are now all thought likely to increase, despite earlier signs that they might plateau.
Total global emissions are set to increase by 2.7 percent after a 1.6-percent rise in 2017. The trend reflects China’s reliance on coal for heating and heavy industry, though the report — the Global Carbon Budget 2018, released on Dec. 5 by the Global Carbon Project (GCP) — also notes that China’s coal consumption has likely peaked. According to the China Power Project — which is based at the Center for Strategic and International Studies, a U.S. think tank — coal accounted for 60.4 percent of China’s energy mix in 2017. Much of China’s economy is based on industries that rely on coal.
Yang Fuqiang, a senior adviser on climate and energy at the China program of U.S.-based environmentalist group the National Resources Defense Council, noted that in 2017 and 2018, China’s coal consumption rebounded — mainly due to its increased use in steel and chemical production, as well as in other industries. This reversed previous achievements that saw China’s carbon emissions barely increase in the middle of the decade. The GCP report warned that recent declines in coal emissions in China may soon be undone if the return growth continues.
China has been trying to reduce coal consumption through a “war on pollution,” now in its fifth year. In July, the State Council announced its 2018-2020 pollution action plan, which requires a handful of northern regions known for heavy industry to cut coal use by 10 percent by 2020. It also announced caps on steel production in Hebei province, China’s largest steel-making hub.
The Chinese government has also looked to ramp up the use of other energy sources, such as liquefied natural gas. However, projects to tap shale gas reserves have hit obstacles as firms cannot bear the high costs and exploration difficulties.
The GCP report contradicts a November announcement from China’s Ministry of Science and Technology that the increasing speed of China’s annual emissions was slowing and had plateaued from 2013 to 2017. The report said that while annual emissions did plateau up until 2016, they began to rise again in 2017.
Ning Leng, a China public policy postdoctoral fellow at Harvard University’s Ash Center, said the change reflects China’s economic circumstances. “Usually, emissions decrease rather than increase in an economic downturn. Here, we see the opposite,” she said. “This shows an active and strong role of the Chinese state in pushing the economy up by all means.”
The top four emitters of carbon dioxide in 2017 — China, the U.S., the EU, and India — accounted for 58 percent of global emissions. China alone accounted for 27 percent. But while China is the world’s largest contributor, it is not the only country to blame. Emissions from the U.S., which accounted for 15 percent of the world’s total last year, were expected to rise 2.5 percent this year. That would reverse several consecutive years of decline for the world’s largest economy. Meanwhile, emissions from the EU were predicted to drop by 0.7 percent this year, and India’s were expected to rise 6.3 percent.
In October, a United Nations panel of scientists concluded that the world has only 12 years to make drastic structural changes in order limit global warming to moderate levels. A report from the NGO Climate Transparency followed, predicting that G-20 countries would fail to meet targets laid out by the UN’s Paris Agreement.
King Coal
Coal as a fossil fuel, used in the generation of electricity is major contributor to carbon emissions. Coal production is a matter of material concern along the LODE Zone Line, especially in Poland, Australia and and Colombia.
Poland's ruling party is chasing the votes of miners in a country that relies heavily on coal.
Poland's ruling Law and Justice (PiS) party plans to introduce legislation that will allow the government to open new coal mines without the approval of local authorities, its energy minister said on Wednesday.
PiS wants to build new mines as it expects half of the country's electricity to be generated from coal by 2050. That would be down from 80 percent coal-powered electricity currently, but goes against European Union calls for member states to achieve zero carbon emissions by 2050.
With faith in politics at record lows, temperatures, pollution and bushfire damage at record highs, it’s a brave politician who hopes that the issue of coal exports will fade away like the Sydney Opera House behind its new shroud of smoke.
Subsidising new coalmines is a poor way to fund our schools and hospitals and it’s an even worse way to help existing coal communities. As Queensland’s Treasury has said, “spending on mining related infrastructure means less infrastructure spending in other areas, including social infrastructure such as hospitals and schools”.
It gets worse. The NSW government’s policy for setting coal royalties states: “Royalty rates are set to encourage present and future exploration and development of mineral resources.” And so keen to open new coalmines is the Queensland government that they a have offered a “royalty holiday” for the coal itself which would amount to an enormously expensive “dig now pay later” scheme. Of course, that assumes that Adani will be around in the future to pay later. But the consequence of this interstate “competition” to attract new coalmines is that Australian taxpayers, and the world’s climate, pays a high price.
But with absurdity comes opportunity. Imagine if Australia had a national plan to manage the decline in coal, a decline that even the coal industry accepts will come “in the decades to come”. Imagine if instead of subsidising new mines to come and compete with existing coalmines, we tried to protect existing coal communities and the environment at the same time.
Living in the Shadow of Colombia’s Largest Coal Mine - El Cerrejón
Indigenous communities in one of country's poorest provinces say El Cerrejón is harming health and environment
The company, co-owned by mining giants Glencore, Anglo-American, and Billiton-BHP, says it complies with Colombian law and points to its sustainable development programs, such as their reforestation project and the relocations of local communities living close to the mine. But locals say the mining operations have taken a drastic toll on their health and quality of life. And they are fighting back.
Facts are sacred
To quote The Guardian DATABLOG of 2016 - Carbon emissions per person by country:
Looking at a country's total carbon emissions doesn't tell the full story of a country's contribution to global warming.
China, for example, is the world "leader" in total emissions (6018m metric tonnes of carbon dioxide) since it overtook the US (5903) in 2007. But all that really tells you is that China is a fast-developing country with a lot of people.
A more useful measurement is carbon emissions per capita (person). Under that measurement, the average American is responsible for 19.8 tonnes per person, and the average Chinese citizen clocks in at 4.6 tonnes.
Examining CO2 per capita around the world also shows us the gulf between the developed world's responsibility for climate change and that of the developing world. While Australia is on 20.6 tonnes per person (partly because of its reliance on CO2-intensive coal) and the UK is half that at 9.7 (explained in part by relatively CO2-light gas power stations), India is on a mere 1.2. Poorer African nations such as Kenya are on an order magnitude less again – the average Kenyan has a footprint of just 0.3 tonnes (a figure that's likely to drop even lower with the country's surge in wind power).
Another list of countries, arranged in order according to a measure of each nation's ecological footprint, can be found on this Wikipedia article: List of countries by ecological footprint.
This list, and map, is based on the work of the Global Footprint Network, an independent think tank originally based in the United States, Belgium and Switzerland.
Global Footprint Network develops and promotes tools for advancing sustainability, including the ecological footprint and biocapacity, which measure the amount of resources we use and how much we have. These tools aim at bringing ecological limits to the center of decision-making.
Global Footprint Network's goal is to create a future where all humans can live well, within the means of one planet Earth. The organization is headquartered in Oakland, California.
Their latest data is available on the website at http://data.footprintnetwork.org/#/
For humanity, having a footprint smaller than the planet's biocapacity is a necessary condition for sustainability. After all, ecological overuse is only possible temporarily.
A country that consumes more than 1.73 gha per person has a resource demand that is not sustainable world-wide.
Countries with a footprint below 1.73 gha per person might not be sustainable. The quality of the footprint may still lead to ecological destruction. If a country does not have enough ecological resources within its own territory to cover its population's footprint, then it runs an ecological deficit and the country is termed an ecological debtor. Otherwise, it has an ecological reserve and it is called a creditor.
Carbon emissions per capita in countries along the LODE Zone Line . . .
The United Kingdom's per capita carbon dioxide emissions stand at 5.6 tons in 2018, compared with Germany at 9.1 tons; Poland at 8.8 tons; Belarus at 6.8 tons; Ukraine at 4.5 tons; Russia at 12.1 tons; Kazakhstan at 16.8 tons; Uzbekistan at 3.1 tons; Turkmenistan at 14.4 tons; Afghanistan at 0.3 tons; Pakistan at 1.0 tons; India at 1.9 tons; Indonesia at 2.1 tons; Australia at 16.8 tons; New Zealand at 7.7 tons; Colombia at 1.8 tons; Puerto Rico at 0.9 tons; and Eire at 7.7 tons per person.
Meanwhile . . .
New data shows how fossil fuel companies have driven climate crisis despite industry knowing dangers
Matthew Taylor and Jonathan Watts expose the 20 firms responsible for a third of all carbon emissions in their Guardian article The polluters (9 October 2019):
The Guardian today reveals the 20 fossil fuel companies whose relentless exploitation of the world’s oil, gas and coal reserves can be directly linked to more than one-third of all greenhouse gas emissions in the modern era.
New data from world-renowned researchers reveals how this cohort of state-owned and multinational firms are driving the climate emergency that threatens the future of humanity, and details how they have continued to expand their operations despite being aware of the industry’s devastating impact on the planet.
The analysis, by Richard Heede at the Climate Accountability Institute in the US, the world’s leading authority on big oil’s role in the escalating climate emergency, evaluates what the global corporations have extracted from the ground, and the subsequent emissions these fossil fuels are responsible for since 1965 – the point at which experts say the environmental impact of fossil fuels was known by both industry leaders and politicians.
The top 20 companies on the list have contributed to 35% of all energy-related carbon dioxide and methane worldwide, totalling 480bn tonnes of carbon dioxide equivalent (GtCO2e) since 1965.
Those identified range from investor-owned firms – household names such as Chevron, Exxon, BP and Shell – to state-owned companies including Saudi Aramco and Gazprom.
Chevron topped the list of the eight investor-owned corporations, followed closely by Exxon, BP and Shell. Together these four global businesses are behind more than 10% of the world’s carbon emissions since 1965.
Twelve of the top 20 companies are state-owned and together their extractions are responsible for 20% of total emissions in the same period. The leading state-owned polluter is Saudi Aramco, which has produced 4.38% of the global total on its own.
Michael Mann, one of the world’s leading climate scientists, said the findings shone a light on the role of fossil fuel companies and called on politicians at the forthcoming climate talks in Chile in December to take urgent measures to rein in their activities.
“The great tragedy of the climate crisis is that seven and a half billion people must pay the price – in the form of a degraded planet – so that a couple of dozen polluting interests can continue to make record profits. It is a great moral failing of our political system that we have allowed this to happen.”
The global polluters list uses company-reported annual production of oil, natural gas, and coal and then calculates how much of the carbon and methane in the produced fuels is emitted to the atmosphere throughout the supply chain, from extraction to end use.
It found that 90% of the emissions attributed to the top 20 climate culprits was from use of their products, such as petrol, jet fuel, natural gas, and thermal coal. One-tenth came from extracting, refining, and delivering the finished fuels.
The Guardian approached the 20 companies named in the polluters list. Eight of them have replied. Some argued that they were not directly responsible for how the oil, gas or coal they extracted were used by consumers. Several disputed claims that the environmental impact of fossil fuels was known as far back as the late 1950s or that the industry collectively had worked to delay action.
Most explicitly said they accepted the climate science and some claimed to support the targets set out in the Paris agreement to reduce emissions and keep global temperature rises to 1.5C above pre-industrial levels.
All pointed out efforts they were making to invest in renewable or low carbon energy sources and said fossil fuel companies had an important role to play in addressing the climate crisis. PetroChina said it was a separate company from its predecessor, China National Petroleum, so had no influence over, or responsibility for, its historical emissions. The companies’ replies can be read in full here.
Heede added: “Leading companies and industry associations were aware of, or wilfully ignored, the threat of climate change from continued use of their products since the late 1950s.”
The research aims to hold to account those companies most responsible for carbon emissions, and shift public and political debate away from a focus just on individual responsibility. It follows a warning from the UN in 2018 that the world has just 12 years to avoid the worst consequences of runaway global heating and restrict temperature rises to 1.5C above pre-industrial levels.
The study shows that many of the worst offenders are investor-owned companies that are household names around the world and spend billions of pounds on lobbying governments and portraying themselves as environmentally responsible.
A study earlier this year found that the largest five stock-market-listed oil and gas companies spend nearly $200m each year lobbying to delay, control or block policies to tackle climate change.
Heede said the companies had a “significant moral, financial, and legal responsibility for the climate crisis, and a commensurate burden to help address the problem”.
He added: “Even though global consumers from individuals to corporations are the ultimate emitters of carbon dioxide, the Climate Accountability Institute focuses its work on the fossil fuel companies that, in our view, have their collective hand on the throttle and the tiller determining the rate of carbon emissions and the shift to non-carbon fuels.”
Climate ACCOUNTABILITY Institute
The profit motive . . .
Don’t panic, humanity: selfless billionaires will save us all
Marina Hyde writes (Jan 17 2020):
The times call for supranational cooperation. Instead of seeing the EU as its best hope, though, the UK will be begging for chlorinated scraps from a US president who has long dismissed the climate crisis as a hoax, and who recently enlivened his announcement of further deregulation by saying he’s found a book on climate change he’d like to read. The title of that book? Donald J Trump: An Environmental Hero. He will naturally be bolstered by that certain stripe of US politician whose default take is that Greta Thunberg should be in school. One of their schools, presumably, to up her risk of facing an active shooter.
Warm words in the alps … Davos prepares for 50th economics shindig . . .
. . . and as the global order unravels?
Everyone from Trump to Thunberg is coming, but the World Economic Forum has been called much ado about nothing
Graeme Weardon writing in the Observer (19 Jan 2020):
It’s Davos time again. The global elite are packing their best snow boots and smartest woolly hats and firing up the Learjet for their annual pilgrimage to the World Economic Forum (WEF).
119 billionaires arrive in their private jets and take electric cars to the World Economic Forum
A look at Davos by the numbers
In a flagship report ahead of the annual gathering of world leaders in Davos next week, the United Nations sounded the alarm that trade tensions between major countries threatened to serve as a brake on growth, with damaging consequences for sustainable development.
Last year the use of private jet flights by attendees at Davos became a symbol of the grotesque hypocrisy of the global business elite.
David Attenborough might have urged world leaders at Davos to take urgent action on climate change, but it appears no one was listening. As he spoke, experts predicted up to 1,500 individual private jets will fly to and from airfields serving the Swiss ski resort this week.
At least two panel members had something to say about this:
NowThis News
RUTGER BREGMAN:'This is my first time at Davos, and I find it quite a bewildering experience, to be honest. I mean, 1,500 private jets have flown in here to hear Sir David Attenborough speak about, you know, how we’re wrecking the planet. I mean, I hear people talking about the language of participation and justice and equality and transparency, but then, I mean, almost no one raises the real issue of tax avoidance, right? And of the rich just not paying their fair share. I mean, it feels like I’m at a firefighters conference and no one’s allowed to speak about water, right?'
MODERATOR: Well, we’ve had two—
RUTGER: Well, wait a minute, there was only one panel apart from this one, one panel hidden away in the media center that was actually about tax avoidance. I was one of the 15 participants. Something needs to change here. I mean, 10 years ago, the World Economic Forum asked the question, what must industry do to prevent abrupt social backlash? The answer is very simple: Just stop talking about philanthropy, and start talking about taxes. Taxes, taxes. We need to—just two days ago there was a billionaire in here, what’s his name? Michael Dell. And he asked a question like, name me one country where a top marginal tax rate of 70% has actually worked? And, you know, I’m a historian—the United States, that’s where it actually worked, in the 1950s during Republican President Eisenhower, you know, the war veteran. The top marginal tax rate in the U.S. was 91% for people like Michael Dell. You know, the top estate tax for people like Michael Dell was more than 70%. I mean, this is not rocket science. I mean, we can talk for a very long time about all these stupid philanthropy schemes. We can invite Bono once more. But, come on, we’ve got to be talking about taxes. That’s it. Taxes, taxes, taxes. All the rest is bullshit in my opinion.
MODERATOR: Go ahead.
Winnie Byanyima, Executive Director of the OXFAM: 'We have a tax system that leaks so much, that allows $170 billion of money every year to be taken to tax havens and to be denied the developing countries that need that money most, so we have to look at the business model, and we have to look at the role of governments to tax and plow back money into people’s lives.
AUDIENCE QUESTION: 'I have to say, honestly, this is a very one-sided panel. // The U.S. basically has the lowest unemployment rate ever, the lowest black unemployment rate ever, the lowest youth unemployment rate ever. We’ve actually reduced poverty around the world, no one’s talking about that at all. // So I’d like for the panel to talk about, beyond taxes, which every one of you has talked about—the only thing that you’ve talked about in this whole panel on inequality—what can we really do to help solve inequality over time beyond taxes.'
WINNIE: 'The gentleman who talked about, who said we’ve just talked taxes and the jobs are there and there’s low—employment rates are low, let me tell you something: We’re talking about jobs, but the quality of those jobs.[Oxfam] also works with poultry workers in the richest country in the world, the United States. Poultry workers. These are women who are cutting the chickens and packing them and we buy them in the super markets. Dolores, one woman we work with there, told us that she and her coworkers have to wear diapers to work because they’re not allowed toilet breaks. This is in the richest country in the world. That’s not a dignified job.
Those are the jobs we’ve been told about that globalization is bringing jobs. The quality of the jobs matter. It matters. These are not jobs of dignity. In many countries, workers no longer have a voice. They’re not allowed to unionize, they’re not allowed to negotiate for salaries. So we’re talking about jobs, but we’re talking about jobs that bring dignity. We’re talking about health care. The World Bank has told us that 3.4 billion people who earn $5.50 a day are on the verge, are just a medical bill from sinking into poverty.
The full Rutger . . .
. . . say no more!
However, another remarkable speaker from 2019 has returned to Davos. This is what Greta Thunberg said last year:
Greta Thunberg: Our House Is On Fire! | World Economic Forum 2019 Jan 25, 2019
This is what she said at Davos this week:
'Our house is still on fire': Greta Thunberg's full speech at the World Economic Forum Jan 21, 2020
Larry Elliot in The Guardian (Sun 19 Jan 2020) points out that:
The profits of doom . . .
The full speech . . . and Fact Check!
Prophet of doom? Or, PERSON of the YEAR?
The BBC's Environment analyst Roger Harrabin reflects on Trump's speech:The timing of President Trump's "don't panic" message is intriguing.He's reassuring the Davos rich club about the climate just as the pillars of capitalism are themselves starting to treat global warming as a crisis.The leading bank Goldman Sachs will no longer fund new investments in Arctic oil or in coal for power stations.
And the boss of investment giant BlackRock has defined climate change as the biggest threat to markets as rising temperatures put profits at risk.His company manages more than $6.5 trillion (£5tn) of savers' cash.Meanwhile the outgoing governor of the Bank of England warns that firms which don't change will go to the wall.President Trump - astride an American economy fuelled by cheap gas - thinks they are wrong.And he's not alone. Leaders in Australia, Brazil, Russia and Saudi Arabia also cling to economies driven by fossil fuels.
It's politics vs science: the battle of our age.
Follow Roger on twitter @rharrabin
Economist Joseph Stiglitz hits out at Donald Trump’s Davos speech
The Nobel laureate accused the president of mischaracterising the economy and ignoring climate issues.
Donald Trump is a good president … but only for the top 1%
The United Nations and the International Monetary Fund take a different view from Donald Trump on present environmental and economic realities.
UN: slower growth may harm greening of global economy
US-China tensions could slow global economy, UN warns
Report says climate crisis, inequality and food insecurity were major concerns
Richard Partington writes (Thu 16 Jan 2020):
The world economy risks suffering a sharp slowdown in 2020 that would derail international efforts to tackle the mounting climate emergency and heightened poverty around the world, the United Nations has warned.
He continues:
António Guterres, secretary-general of the UN, said: “These risks could inflict severe and long-lasting damage on development prospects. They also threaten to encourage a further rise in inward-looking policies, at a point when global cooperation is paramount.”
In a pivotal year for the US as Trump seeks reelection, the UN forecasts the US growth rate would slow sharply from 2.2% in 2019 to 1.7% this year. It said subdued business confidence following the two-year trade conflict, as well as the waning impact of tax cuts introduced by Trump earlier in his presidency, were set to drag down growth in the world’s largest economy.
It also predicts that growth in China would ease to around 6% this year, down from 6.1% in 2019, continuing a gradual slowdown in the world’s second largest economy following years of rapid development.
Against a backdrop of continued global uncertainty over trade, economic growth in the EU is forecast to remain relatively weak compared with recent years, amid weaker levels of manufacturing output. GDP growth is expected to accelerate slightly from 1.4% in 2019 to 1.6% this year.
Crisis! What crisis? Climate crisis? Or, crisis of capitalism?
Even the IMF is warning that the climate crisis is putting stress on the global economy, as it cuts growth forecasts.
Philip Inman reports (Mon 20 Jan 2020):
The International Monetary Fund has warned that the world economy is increasingly vulnerable to the impact of the climate emergency as the Washington-based organisation downgraded its forecasts for 2020 and 2021.
Urging governments to make greater strides to reduce carbon emissions and build green infrastructure, the IMF said one of the main risks to its forecasts came from the growing costs of the climate crisis and the harm caused by protectionist trade policies.
It also cited political wrangling between the US and Iran, and the potential for social unrest to spread across the Middle East as further threats to the global economic outlook.
In its half-yearly health check on the global economy, the IMF said: “Weather-related disasters such as tropical storms, floods, heatwaves, droughts and wildfires have imposed severe humanitarian costs and livelihood loss across multiple regions in recent years.
“Climate change, the driver of the increased frequency and intensity of weather-related disasters, already endangers health and economic outcomes, and not only in the directly affected regions.
“It could pose challenges to other areas that may not yet feel the direct effects, including by contributing to cross-border migration or financial stress (for instance, in the insurance sector). A continuation of the trends could inflict even bigger losses across more countries.”
Speaking in Davos at the World Economic Forum, the IMF’s chief economist, Gita Gopinath, said the climate risk was near and present and a major issue that demands that governments step up.
The warning came as the IMF said the global economy would grow by an estimated 3.3% in 2020, down from a previous forecast of 3.4%. Growth in 2021 is expected to be 0.2 percentage points lower than originally forecast at 3.4%.
The escalating tit-for-tat tariff war between the US and China last year was mostly to blame for a 0.1 percentage point cut in the estimate for growth for 2019 to 2.9%.
As recently as 2017, the global economy grew by 3.8%. Before the financial crisis in 2006, it was expanding at the much faster rate of 5.5%.
The UK is expected to grow only modestly and in line with the IMF’s previous forecast at 1.3% last year, 1.4% this year and 1.5% next year. This is based on an orderly exit from the EU later this year and a smooth transition to a new trading relationship from 2021.
Citing other downside threats to its forecast, the report referred to the possible breakdown in US/China relations following a first-phase deal last week, further trade sanctions by the US on Europe, and the spread of social unrest. All of these factors could put in jeopardy the recovery from last year’s weak growth over the next two years, the IMF said.
Neither the United Nations or the IMF are revolutionary organizations!
Entr'acte . . .
Sixty years on, Hitchcock's sleek, wry, paranoid thriller North By Northwest caught the zeitgeist of the late 50's perfectly: Cold War shadiness, secret agents of power, urbane modernism, the ant-like bustle of city life, and a hint of dread behind the sharp suits of affluence.
Perhaps Cary Grant's Roger Thornhill, is translatable to the current semiotic universe, or semiosis, we find today in Davos. The film's sharply dressed ad exec who is sucked into a vortex of mistaken identity, certainly wouldn't be out of place at the World Economic Forum.
He finds himself framed for a murder in the United Nations headquarters in New York. Some delegates at Davos probably know this feeling, but board their private jets in any case.
Bloomberg reports . . .
The hundreds of private jets expected to fly people out of Davos this week from the World Economic Forum will be able to fill their tanks with fuel designed to lower carbon emissions, as the annual global talk shop aims to beef up its green credentials.
So-called sustainable aviation fuel, or SAF, will be available at Zurich airport, according to a statement Monday from a coalition of groups representing business jet operators, manufacturers and fuel suppliers. A 30% blend with conventional jet fuel can lower CO2 emissions by about 18% on a comparable 1,000-nautical-mile flight, the group said on its website.
Private jets -- a staple of Davos -- have become a lightning rod for the flight-shaming movement, with the global elite criticized for spewing unnecessary emissions by avoiding commercial flights. Promoting alternative fuels could help ease the mounting pressure against business-jet use, as well as for the broader aviation industry, which faces a potential end to European Union tax exemptions for jet fuel.
Carbon output from international aviation has more than doubled since 1990 and the United Nations has said the industry is set to overtake power generation as the single biggest CO2 producer within three decades.
The World Economic Forum this year has taken pains to push a green agenda and to make the conference more sustainable. Single-use plastic is being discouraged, while organizers promote protein alternatives to meat and transport by train and bus. About 1,000 private jet flights flew to and from nearby Zurich and St. Gallen-Altenrhein airports during the 2019 meeting.
The prophets of doom . . .
Trump's accusation in his Davos speech that climate activists are prophets of doom, and knowing that Greta Thunberg was present in the audience, says more about Trump and all those angry white males who have the time and public platforms to vent their patriarchal spleen.This phenomenon is discussed in The Conversation article Misogyny, male rage and the words men use to describe Greta Thunberg.
Detractors have dismissed Swedish climate activist Greta Thunberg - a Nobel Prize nominee - as mentally ill, hysterical and a millennial weirdo after she pleaded with world officials last week to address the climate crisis.
In this article, two researchers explain the stereotypical labels deployed by critics to undermine Thunberg’s call to action, which the activist herself has described as “too loud for people to handle”.
Greta Thunberg obviously scares some men silly. The bullying of the teenager by conservative middle-aged men has taken on a grim, almost hysterical edge. And some of them are reaching deep into the misogynist’s playbook to divert focus from her message.
It is not a rhetorical accident that critics of Thunberg, nearly 17, almost always call her a “child”. This infantilisation is invariably accompanied by accusations of emotionality, hysteria, mental disturbance, and an inability to think for herself - stereotypically feminine labels which are traditionally used to silence women’s public speech, and undermine their authority.
In Australia, Herald Sun columnist Andrew Bolt has called Thunberg “freakishly influential … with many mental disorders”. Sky News commentator Chris Kenny described her as a “hysterical teenager” who needs to be cared for.
Overseas, male commentators have used similar pejorative terms - describing her as a “mentally-ill Swedish child”, unstable and a “millenarian weirdo”. One claimed Thunberg needed a “spanking”; another likened her activism to “medieval witchcraft”.
Obviously these men find Thunberg triggering. But why?
At a deep level, the language of climate denialism is tied up with a form of masculine identity predicated on modern industrial capitalism – specifically, the Promethean idea of the conquest of nature by man, in a world especially made for men.
By attacking industrial capitalism, and its ethos of politics as usual, Thunberg is not only attacking the core beliefs and world view of certain sorts of men, but also their sense of masculine self-worth. Male rage is their knee-jerk response.
Thunberg did not try to be “nice” when she confronted world leaders at the United Nations last week. She did not defer or smile. She did not attempt to make anybody feel comfortable.
US President Donald Trump tweeted: “She seems like a very happy young girl looking forward to a bright and wonderful future. So nice to see!” Happiness here aligns itself with conformity, and an unspoken idea that women and children are expected to be docile and complacent.
But in reality, Thunberg is cutting through - rather than displaying - emotionalism. What certain kinds of men do not wish to acknowledge is that asking for action on climate change is entirely rational.
A Trojan horse?
It was NOT a Trojan horse! It was a GREEK horse!
The "classic" story of Laocoön . . .Laocoön, the son of Acoetes, is a figure in Greek and Roman mythology and the Epic Cycle. He was a Trojan priest who was attacked, with his two sons, by giant serpents sent by the gods. The story of Laocoön and his grisly death has been the subject of numerous artists.
The most detailed description of Laocoön's fate was provided by Quintus Smyrnaeus in Posthomerica, a later, literary version of events following the Iliad. According to Quintus, Laocoön begged the Trojans to set fire to the horse to ensure it was not a trick. Athena, angry with him and the Trojans, shook the ground around Laocoön's feet and painfully blinded him. The Trojans, watching this unfold, assumed Laocoön was punished for the Trojans' mutilating and doubting Sinon, the undercover Greek soldier sent to convince the Trojans to let him and the horse inside their city walls. Thus, the Trojans wheeled the great wooden Horse in. Laocoön did not give up trying to convince the Trojans to burn the horse, and Athena made him pay even further. She sent two giant sea serpents to strangle and kill him and his two sons.
The Laocoön manifesto . . .
However, his destruction, by the action of "the gods", was the consequence of Laocoön forensically, and rationally, coming to the conclusion that the horse represented a deadly danger to the city of Troy.
It was a Greek horse! A trick! A trap! A lie! Beware Greeks bearing gifts!
Laocoön, and his children, were destroyed by the gods because Laocoön was speaking the TRUTH!
Telling the truth is NOT extremism!
In the days of antiquity it appears that it was well understood that there may be dangerous consequences as a result of speaking the truth. Nowadays speaking truth to power may result in arrest, and being branded "extremist". George Monbiot writes today that:If defending life on Earth is extremist, we must own that label
Read George Monbiot's article. Here are a couple of extracts:
Police say climate groups such as Extinction Rebellion are a ‘threat’. They’d have done the same for the suffragettes and Martin Luther King
All over the world, corporate lobbyists seek to brand opponents of their industries as extremists and terrorists, and some governments and police forces are prepared to listen. A recent article in the Intercept seeks to discover why the US Justice Department and the FBI had put much more effort into chasing mythical “ecoterrorists” than pursuing real, far-right terrorism. A former official explained, “You don’t have a bunch of companies coming forward saying ‘I wish you’d do something about these rightwing extremists’.” By contrast, there is constant corporate pressure to “do something” about environmental campaigners and animal rights activists.
Our government is helping propel us towards a catastrophe on a scale humankind has never encountered before: the collapse of our life-support systems. It does so in support of certain ideologies – consumerism, neoliberalism, capitalism – and on behalf of powerful industries. This, apparently, meets the definition of moderation. Seeking to prevent this catastrophe is extremism. If you care about other people, you go on the list. If you couldn’t give a damn about humankind and the rest of life on Earth, the police and the government will leave you alone. You might even be appointed to high office.
It is hard to think of any successful campaign for democracy, justice or human rights that would not now be classed by police forces and the government as an extremist ideology. Without extremists such as Emmeline Pankhurst, who maintained that “the argument of the broken window pane is the most valuable argument in modern politics”, Patel would not be an MP. Only men with a certain amount of property would be permitted to vote. There would be no access to justice, no rights for workers, no defence against hunger and destitution, no weekends.
In his Letter from Birmingham Jail, Martin Luther King Jr, subjected to smears very similar to those now directed against XR and other environmental groups, noted: “The question is not whether we will be extremists, but what kind of extremists we will be. Will we be extremists for hate or for love? Will we be extremists for the preservation of injustice or for the extension of justice?”
Good citizens cannot meekly accept the death of the living planet. If seeking to defend life on Earth defines us as extremists, we have no choice but to own the label. We are extremists for the extension of justice and the perpetuation of life.
The actual extremists . . . and the short term profits of doom . . .
The New York Times Magazine ran an outstanding article on "the climate issue", by Jesse Barron, April 11 2019, How Big Business is Hedging Against the Apocalypse, that points to some of the unwelcome strategies employed for maximizing profit, including Exxon, one of the biggest capitalist polluters on the planet, and included in the Guardian list of the 20 firms responsible for a third of all carbon emissions. Here is the full text:
Rex Tillerson stood under a 32-foot pipe organ at the Morton H. Meyerson Symphony Center in Dallas, explaining how the world worked. It was May 2015, in the middle of an oil-price crash, and Exxon Mobil’s earnings had fallen 46 percent compared with the same quarter the year before. But Tillerson, then Exxon’s chief executive, told his shareholders to be confident in the future. Oil and gas furnished billions of people, including the very poor, with cheap, reliable fuel — a fact not easily negated by a weak fiscal quarter. “Our view reflects the reality,” Tillerson said, “that abundant energy enables modern life.”
Later that morning, a Capuchin Franciscan friar rose to speak. A so-called faith-based investor, Michael Crosby belonged to a tight circle of religious leaders who bought stock in public companies in the hope of exerting a moral influence on them. While Tillerson, head of one of the largest oil companies in the world and a power broker in international geopolitics, was accustomed to ignoring protesters, Crosby proved more tactical than most. He submitted a motion to appoint a climate-change expert to Exxon’s board, which gave him the floor for several minutes. Then he laid into Tillerson for having uttered “not one word or syllable” about climate change. He asked why Saudi Arabia invested in solar panels while Exxon spent nothing. “You’re living out of the past,” he told Tillerson.
At Exxon’s annual meetings — as in most rooms where important business happens — people speak in the subdued patter of corporate jargon, language that camouflages the reality it describes. So in the 2,000-seat auditorium, it would have taken a moment to appreciate the gravity of what Crosby was actually describing, which was not a few numbers on a balance sheet but something closer to the fate of the species. Global energy consumption is rocketing upward every year: The Energy Information Administration expects it to climb another 28 percent within a generation. Hydropower, wind and solar contribute about 22 percent of the total, and their share grows yearly. But the net amount of energy generated by hydrocarbons is growing yearly, too. It’s all rising because demand is rising. Global hydrocarbon producers, meanwhile, have so much product in reserve that burning even half of it would leave us with slightly worse than heads-or-tails odds of staying under the two-degree-Celsius threshold that, according to climate models, could bring mass famine, drought, flooding and fires.
From his spot beneath the pipe organ, Tillerson regarded the friar. “Like it or not,” he said, the world would depend on fossil fuels “for the next several decades” — well into the middle of the century. This was Tillerson’s line whenever people asked him about the future of hydrocarbons: Remind them how dependent they are and paint alternatives as childlike fantasies. Tillerson said the motion for a climate-change expert would be defeated. Turning to renewables, he dismissed them as a sucker’s bet. “Quite frankly, Father Crosby,” he said, “we choose not to lose money on purpose.” The crowd at the Symphony Center showered him with applause.
Three years later, an Irishman named Declan Flanagan, chief executive of the renewables company Lincoln Clean Energy, was addressing his own shareholders in Copenhagen when he delivered a cryptic announcement. Lincoln, he said, was going to build a solar farm in the Permian Basin — the heart of West Texas oil country — with funding put up by a “blue-chip counterparty.” Flanagan let this hang for a moment in the room while he breezed through a jargony update on regulatory matters. Finally he returned to the story. “I mentioned the blue-chip counterparty,” he reminded his listeners. “That,” he said in his strong Irish accent, “is Exxon Mobil.”
‘It’s a fast-moving area with even more uncertainty than an uncertain world.’
Between Exxon’s meeting in Dallas and Flanagan’s announcement in Copenhagen, the oil giant had installed a new chief executive — Tillerson having exited for a brief sojourn in Washington — but had not experienced a change of heart. No decision had been made to execute a bootleg turn away from hydrocarbons. Exxon’s executives, like everyone in the energy business, had watched as the cost of renewable power tumbled ever lower in Texas, where a lattice of high-tension power lines carried electricity from the bright, windy plains of the far West and the Panhandle to the thirsty cities below. Far from feeling worried, Exxon saw an opportunity. Fracking is a very electricity-intensive method of extracting hydrocarbons. By using solar energy for just a portion of its operations in Texas, Exxon could save on electricity costs and keep more cash. It could profit by turning renewable power back into the hydrocarbon power it existed to replace.
Exxon’s arrangement in Texas reflects, in miniature, our national state of indecision about the best approach to climate change. Depending on whom you ask, climate change doesn’t exist, or is an engineering problem, or requires global mobilization, or could be solved by simply nudging the free market into action. Absent a coherent strategy, opportunists can step in and benefit in wily ways from the shifting landscape. Tax-supported renewables in Texas take coal plants offline, but they also support oil extraction. Technology advances, but not the system underneath. Faced with this volatile and chaotic situation, the system does what it does best: It searches out profits in the short term.
Unlike almost every other future event, climate change is 100 percent certain to happen. What we don’t know is everything else: where, or how, or when, or what the changes mean for Facebook or Pfizer or notes of Chinese-government debt. Navigating these thickets of complexity is theoretically what Wall Street excels at; the industry prides itself on its ability to price risk for the whole economy, to determine companies’ values based on their likelihood of generating earnings. But traders are compensated on their quarterly or yearly performance, not on their distant foresight. It takes confidence to walk into your boss’s office talking about sea levels in Mozambique in 2030, when your colleague has a reason to short-sell the Turkish lira this week. Practically no one in the financial system is directly incentivized in the near term to worry about the biggest risk conceivable.
The simplest response is to keep investing in companies that, like Exxon, conduct their business as usual while adapting where they can. Another response is to forget about the immediate term and go long on more sustainable bets. Al Gore, for instance, whiles away his hours running a climate-focused fund called Generation Investment Management. On a slightly higher plane sit the gigantic banks and mutual funds, which continue to invest traditionally but use “climate analytics” to see where their portfolios might contain problems, like public utilities that could be bankrupted by wildfires.
Other strategies display more cleverness. Electric vehicles and green power grids require, for their batteries, valuable minerals and metals. Spot prices for nickel and cobalt fluctuate by double-digit percentages on commodities exchanges, while investors eye shares in lithium mines. Anticipating future food crises, strategists at Merrill Lynch advise clients to snap up vertical farms and “smart hydroponics”; anticipating water shortages, they also recommend investing in Chinese wastewater-recycling businesses.
As the earth becomes hotter, the air becomes less dense. In June 2017 in Phoenix, airlines grounded multiple jets because their wings couldn’t achieve lift in the 119-degree heat. Assuming more 119-degree days, aerospace companies like MTU Aero Engines and Rolls-Royce are “lightweighting” some of their machines to adapt. In Australia, an agribusiness conglomerate waits for family farms to fold for lack of rainfall, then considers buying their land at a discount. With drought conditions, the chief executive told The Australian Financial Review last year, “we are seeing more opportunities than would have been there normally.” A real estate manager in Dallas told a Bloomberg reporter that he purchased hotels right before Hurricane Harvey to take advantage of the need for short-term housing, and made a 25 to 30 percent return. The Harvard endowment has bought up vineyards in California, acquiring their water rights in the midst of a long drought.
By the middle of the century, the climate of the Southeastern United States will most likely be tropical, no longer ideal for peach trees but perfect for the Aedes aegypti species of disease-bearing mosquito. In response, some investors are going long on firms conducting clinical trials for dengue and Zika vaccines: One asset manager told me he knew of multiple “Zika strategies.” Pharmaceutical companies foresee robust demand for antimalarials, products typically confined to poor countries; they can look forward to a market in the rich parts of the globe. In Miami, where the expensive neighborhoods lie low near the water, there may be a wave of “widespread relocations,” researchers warn, as the flight from the coast serves to “gentrify higher-elevation communities” like Little Haiti. One study warns that speculators may already be “hedging on South Florida’s gradual exodus” to the central and northern parts of the state. In Greenland, mining companies buy previously useless land rights in order to extract the minerals that melting ice will shortly expose. In addition to uranium and molybdenum — a silvery metal used in steel alloys — the miners expect to find rich reserves of oil, which they fully expect to burn.
The Greenland play was best reported by McKenzie Funk, whose 2014 book, “Windfall,” profiles the first generation of climate profiteers. Schemers prowl these pages. A London “climate-change fund” invests in Russian farmland, whose value is expected to spike amid “drought-fueled global food crises.” Betting on the same thing, a former partner of A.I.G. flies to Sudan to strike a farmland-lease deal with a rebel general. A former C.I.A. analyst buys “billions of gallons of water” in the American Southwest and Australia. An Israeli entrepreneur goes long on desalination plants (some powered by coal, Funk notes).
What is odd about many of these climate plays, which rely on such complex assumptions about the future, is how myopic they seem. They assume that the world will change around a stable, fixed point. American weather will curdle to such a degree that Tennessee will become an incubator for malaria, yet Wall Street banks and patent lawyers will saunter along as usual. Rising oceans will submerge coastal financial centers beneath several feet of saltwater, yet commodities markets will pay top dollar for Greenlandic uranium. Taken individually, these assumptions sound dubious. But as a whole, they mirror what’s happening on Wall Street. Each successive year incinerates the temperature figures of the previous one, yet the stock market continues to break records.
An unsettling fact of Wall Street today is that some of the same people who accurately predicted the housing bubble are now describing another bubble, whose collapse will make the financial crisis of 2008 look mild. Perhaps the most famous is Jeremy Grantham, a founder of the Boston-based asset-management firm G.M.O. and a commander of the British Empire. In 2005, Grantham began to write letters to his investors saying that the housing market appeared overleveraged; in 2007, he warned of “the first truly global bubble.” His latest prediction overshadows the preceding one. We are, he says, in the midst of a historic period of mispricing. Because the global economy depends on hydrocarbons, practically every asset in the world relates in some way to oil and gas. Grantham believes hydrocarbons will be priced, or regulated, into submission. In light of that belief, not only oil companies’ stock but practically everything else on the market looks falsely inflated.
In the last few years, Grantham has committed all but 2 percent of his personal fortune to funding projects — energy storage, pesticides, lightweight cars — that might help save us in the event of two degrees of warming. In June 2018, he gave a keynote address at an investment conference in Chicago. The two speeches before Grantham’s were called “Take a Balanced Approach to Sourcing Cash Flows” and “Making Sense of the Multitude of Multifactor ETFs.” Grantham called his speech “The Race of Our Lives.”
“You could call this presentation the story of carbon dioxide and Homo sapiens,” he began. Then he spoke for nearly an hour about glacial runoff, food scarcity and lithium batteries. He explained how a turbine’s efficiency increased exponentially with the length of its blades. He said that offshore wind farms in the churning North Sea could soon provide the cheapest power on the planet. He rose to a techno-utopian pitch, speaking about our obligations to our grandchildren, decency over profit. Even as he spoke lucidly about climate change, Grantham represented a tangled and confusing paradox. Perched as he was at the pinnacle of the market, he was developing an acute sense of the market’s failure to address the problem that most obsessed him. Yet he continued to help oversee a $70 billion firm, which was the main source of his wealth. If anyone was living inside the tortured contradictions between the market and the climate — between our modern economy and its ultimate external cost — Grantham, I thought, was the person.
When I knocked on the door of his Beacon Hill townhouse at 8:45 in the morning on a Friday, the door swung open, and Grantham appeared on the staircase, 80 and impish, wearing a dark purple sweater over a pink-and-green striped shirt. “Were you waiting long?” he said. I followed him up into a second-story living room where winter light flooded the bay windows, falling on a hand-painted Dutch children’s sleigh from the 17th century. Grantham took my coat, then seated me on the couch. Every so often, a heat pipe hissed somewhere behind me.
When Grantham started his climate fund, the Grantham Foundation, in 1997, many asset managers on Wall Street viewed his work as a fringe pursuit. “There was an undercurrent of, ‘Oh, this is a load of [expletive],’ ” he said. During the past two years, however, the cavalcade of hurricanes, droughts, floods and displacements has made it impossible to maintain the same level of denial in the polite corporate circles that ring Wall Street. This did not mean that climate-based investment strategies had become popular. It was the opposite: No one was willing to risk all of his or her “career units,” as Grantham called them, on climate.
“The problem of doing it accurately is, of course, massive,” he said, referring to betting on climate change. “It’s a fast-moving area with even more uncertainty than an uncertain world. It’s the cutting edge of uncertainty.”
Grantham’s fund is going long on lithium and copper, which he believes will form the vascular system of future renewable-powered supergrids. His confidence derives from an odd and specific conviction that “sooner or later, there will be a carbon tax,” and much of the market capitalization of the leading oil and gas companies will be erased. “You have a certainty,” he said. “It will happen. Or we’ll be on our way to a failed civilization.”
It took me a moment to process what this meant. Grantham was saying that a bet on a future carbon tax was a sure thing because the absence of a carbon tax meant civilizational catastrophe. If he were right, he could make billions. If he were wrong, it wouldn’t matter, because the world would be on fire. “Perfectly fine logic,” Grantham said, as the old radiators gurgled around him.
If Grantham’s logic was so perfect, why didn’t everyone see it? It’s often said, on Wall Street, that the stock market’s prices reflect all available information — an idea known as “efficient market theory.” The idea has dominated the financial sector for half a century. If it really were luminously obvious that a carbon bubble was about to explode, the theory says that prices should reflect that — in other words, that Grantham had no edge and his thesis made no sense.
“They say everything’s priced in,” I ventured.
“Complete [expletive],” Grantham said. Then he embarked on a detailed explanation of why, summarizing John Maynard Keynes’s theory of career risk — “that it is better for reputation to fail conventionally than to succeed unconventionally” — before returning to present-day Wall Street, where asset managers, impelled by short-term self-interest or outright denial, feared to stick their necks out on climate-related bets. Faced with such irrational behavior, efficient market theory seemed wobbly. “It’s [expletive] because people are incompetent,” Grantham continued, “it’s [expletive] because —”
Around 10 a.m., his cellphone crackled to life, and a woman’s voice said: “Jeremy, you have to get to your next meeting.”
For a second, Grantham appeared almost mournful. He held my coat up for me to put my arms through. Then he dashed downstairs into the snow.
The future site of the solar farm that Lincoln is building for Exxon, the Permian Basin, is hilly and semiarid, with white caliche roads running toward the oil rigs and the nights punctured by the flames of natural-gas flares. Sometimes, when the wind picks up, the highways smell like sulfur. In recent years, the Permian became the most productive oil-and-gas field in the United States, as advancements in horizontal drilling and fracking technology made it possible to shatter the tightly packed shale. Exxon, Chevron and their peers can now access natural gas and oil that was previously unreachable, organic material that was deposited by surging oceans and subsiding land some 200 million years ago. If the Permian were a country, it would rank among the largest oil states in the world.
Every cliché about oil booms applies right now in the Permian: the 18-year-olds earning six figures driving trucks, the petrochemical Ph.D.s living in man-camps, the overtaxed public schools and doctors’ offices. Unemployment in Midland, where Permian energy companies have their headquarters and where George W. Bush was raised, hovered this winter around 2.2 percent, the fourth-lowest metropolitan rate in the country. Yet the salient feature of the landscape is not the drilling infrastructure. For one thing, fracking takes place underground, in 10,000-foot tunnels, no more than eight inches in diameter and marked by only a single wellhead. For another, you can’t keep your eyes off the wind turbines, which in certain counties seem studded in every acre of ranch land. Texas produces more wind power than every other state in the country, four times as much as the runner-up, California.
The Texas power grid inspires awe. Every five minutes, 24 hours a day, the Electric Reliability Council of Texas calculates the cheapest power being produced from every kind of generator in the state, then sends that electricity down the path of least resistance to its customers. From Ercot’s perspective, it doesn’t matter whether the cheapest power comes from a solar panel or coal, or whether the customer is a greenhouse or an oil rig.
Last April, Texas consumed about 25.7 million megawatts of power. Of that, 62 percent came from hydrocarbons and 27 percent from wind and solar. Electricity from all power sources feeds into the Ercot grid like tributaries into a river. Though Exxon’s deal with Lincoln is one of the most visible examples of a fossil-fuel company using renewable energy, in reality all the Permian extraction outfits consume it, whether or not they intend to, simply because the grid is designed to serve it to them. In 2017, demand for electricity rose 8 percent in West Texas, compared with 1 percent for the state’s grid as a whole. Warren Lasher, the senior director of system planning at Ercot, told me that most of that change comes from oil and gas.
Frosty Gilliam, an independent oilman in the Permian, greeted me at the reception desk of his office, on a sparse stretch of business highway in Odessa, Tex., and beckoned me into a conference room decorated in what he described as a “Tuscan feel,” with marble, hand-troweled plaster and antique lamps. Sitting across from me at the darkly polished table, Gilliam was small and reticent, with glinting eyes and short white hair.
Gilliam grew up in West Texas and earned his degree at Texas A&M in petroleum engineering, graduating into the oil boom of the 1980s and easily finding a job at Amoco, the conglomerate that descended from John D. Rockefeller’s Standard Oil. In the late ’80s, as many small-time oil-and-gas entrepreneurs used to do in Texas, Gilliam started to build himself a business by scraping together mineral rights. His company, Aghorn Energy, now controls some 1,100 wells in the Permian, making him a relative lightweight.
The atmosphere in the office was convivial, and I hesitated to raise a question that would poison it, but after half an hour I asked how he thought about climate change. For 14 seconds, Gilliam stared at me across the table, the hint of a smirk on his mouth.
“Now you’re setting me up for a bunch of hate mail,” he said. Personally, he didn’t believe climate change was an important issue. He said that when he saw data about rising sea levels or scorching temperatures, he suspected it was falsified or manipulated in order to further a political agenda. Gilliam knew that many of the big energy companies were investing in renewables, and he viewed their maneuvers skeptically. “The politically correct path is, ‘We’re going to increase our renewable energy production by 10 percent a year,’ O.K.? But in reality, they make their business selling oil and gas, right?”
For the most part Gilliam spoke in the first person, stressing to me that he was delivering only his own opinions. Toward the end of our time together, though, he switched into a collective voice, to explain the reaction you’d arouse if you showed up in West Texas in a Tesla. “We wouldn’t tar and feather you,” he said. “We would just think, Well, he has his opinion, but our opinion is that there’s not a problem.”
The tension between the individual and the species, between Gilliam and the “we,” runs through the heart of capitalism and always has. In economics, there is a theory called the Lauderdale Paradox, which the Scottish politician James Maitland articulated in the early 19th century. The theory says that capitalism undervalues public resources, like air and water and soil, because they are so plentiful, and overvalues whatever is private and scarce. A barrel of oil sells for $50 or $60, yet the emissions from that oil appear on no one’s balance sheet.
When the paradox was first articulated, the mill industry of England was transitioning from water to coal, a long and contentious process. Coal allowed mill owners to site factories in cities, where wages were lower, and to run their machines at all hours. But water was cheaper, cleaner and more plentiful. In newspapers and private clubs, politicians and journalists fervently debated the merits of each fuel source, and England hovered for decades on the knife’s edge between two possible futures, until — as the scholar Andreas Malm recounts in “Fossil Capital,” a history of early industrialism — the more aggressive urban mill owners triumphed and the country switched to hydrocarbons. Seeing the whole problem like that, as a result of an economic arrangement rather than an unsparing fate or a flaw in human character, is exceedingly grim but also kind of optimistic. One system can dominate for a while, then another can sneak up and take its place.
At the far end of Gilliam’s conference table, a surveyor’s map lay open, its corners secured by brown leather document weights. The map depicted a mineral play in which Gilliam had an interest, containing perhaps a few hundred thousand barrels’ worth of oil. PROVISIONAL & CONFIDENTIAL was stamped in red along the bottom. The map depicted the typical hydrocarbon infrastructure, like well locations and the large container drums known as tank batteries, shown as blue and yellow rectangles. But a checkerboard of gray lines had been drawn over these features, dividing the 3,700 acres into clean, even squares. I asked Gilliam what the squares were. “Solar farm,” he said, casually.
A solar farm in Texas, USA
David Wallace-Wells in his book The Uninhabitable Earth makes an acute observation regarding Bitcoin and that was referenced in the previous post.
Five years ago, hardly anyone outside the darkest corners of the internet had even heard of Bitcoin;
today mining Bitcoin consumes more electricity than is generated by all the world's solar panels combined,which means that in just a few years we've assembled, out of distrust of one another and the nations behind "fiat currencies," a program to wipe out the gains of several long, hard generations of green energy innovation. It did not have to be that way. And a simple change to the algorithm could eliminate the Bitcoin footprint entirely. (Page 33)
Meanwhile billionaires continue to invest . . .
"Henry Kravis is the latest titan of finance to take a shot at cryptocurrencies;" says Alastair Marsh June 28, 2019.
Unfortunately in order to read this article you have to be a subscriber to Bloomberg News
This is in stark contrast to The Guardian that is more often than not the source of many of the stories referenced here on the Re:LODE Radio blog.
The Guardian and its Sunday sibling The Observer publish all their news online, with free access both to current news and an archive of three million stories. A third of the site's hits are for items over a month old. As of May 2013, it was the most popular UK newspaper website with 8.2 million unique visitors per month, just ahead of Mail Online with 7.6 million unique monthly visitors.
In April 2011, MediaWeek reported that The Guardian was the fifth most popular newspaper site in the world. As well as TheGuardian.com, the publisher runs two international websites, Guardian Australia (founded in 2013) and Guardian US (founded in 2011).
"knowledge is power"
The Guardian's policy is profoundly democratic in spirit. Having to pay for access to the facts and events going in the Whole Wide World on the World Wide Web is an impediment to any prospect of a developed political discourse, and an enabling dynamic in the dissemination of disinformation, misinformation, fake news and bogus conspiracy theories, usually attached to algorithms that generate advertising revenue.
"power-knowledge"
According to Wikipedia (a project that is well known for being free, without advertisements or commercial bias, and hosted by the Wikimedia Foundation), the term in sociology, "power-knowledge" was introduced into discourse by the French philosopher Michel Foucault as:
"le savoir-pouvoir".
According to Foucault's understanding, power is based on knowledge and makes use of knowledge; on the other hand, power reproduces knowledge by shaping it in accordance with its anonymous intentions.
Power (re-) creates its own fields of exercise through knowledge.
Wikipedia points to a history of the concept before the term was coined, firstly citing the 1934 play ‘The Rock’ by T. S. Eliot where he writes: "Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?". This division between information, knowledge and wisdom inspired many generations of information scientists later on. Secondly, in the field of political economy, Harold Innis is cited as being extensively referenced on the "monopoly of knowledge", in which empires over the centuries have exploited information and communication resources to produce and control systems of exclusive knowledge and power. Marshall McLuhan was a colleague of Harold Innis's at the University of Toronto. As a young English professor, McLuhan was flattered when he learned that Innis had put his book The Mechanical Bride on the reading list of the fourth-year economics course. McLuhan built on Innis's idea that in studying the effects of communications media, technological form mattered more than content. Biographer Paul Heyer writes that Innis's concept of the "bias" of a particular medium of communication can be seen as a "less flamboyant precursor to McLuhan's legendary phrase 'the medium is the message.'" (Heyer, Paul. (2003). Harold Innis. Lanham, Md.: Rowman & Littlefield)
Innis, for example, tried to show how printed media such as books or newspapers were "biased" toward control over space and secular power, while engraved media such as stone or clay tablets were "biased" in favour of continuity in time and metaphysical or religious knowledge. McLuhan focused on what may be called a medium's "sensory bias" arguing, for example, that books and newspapers appealed to the rationality of the eye, while radio played to the irrationality of the ear. The differences in the Innisian and McLuhanesque approaches were summarized by the late James W. Carey:
Both McLuhan and Innis assume the centrality of communication technology; where they differ is in the principal kinds of effects they see deriving from this technology. Whereas Innis sees communication technology principally affecting social organization and culture, McLuhan sees its principal effect on sensory organization and thought. McLuhan has much to say about perception and thought but little to say about institutions; Innis says much about institutions and little about perception and thought.
Carey, James W. "Harold Adams Innis and Marshall McLuhan" in McLuhan Pro and Con (1969) Baltimore: Pelican Books, p. 281.Wikipedia then cites how in 1943, C. S. Lewis in his Abolition of Man set out his view that power granted by knowledge was "not power over nature", as commonly supposed, but was instead "power that some men wielded over others, using nature to do so".
Whilst devising the term, Foucault was critical of the idea that humans can reach "absolute" knowledge about the world. A fundamental goal in many of Foucault's works is to show how that which has traditionally been considered as absolute, universal and true is in fact historically contingent. To Foucault, even the idea of absolute knowledge is a historically contingent idea, so, Foucault argues, that we "always begin anew" when it comes to knowledge.
The hyphenFoucault incorporated mutuality into his neologism power-knowledge, the most important part of which is the hyphen that links the two aspects of the integrated concept together (and alludes to their inherent inextricability).For the current context for Re:LODE Radio, or any other blog for that matter, while in most of the 20th century the term ‘knowledge’ has been closely associated with power, in the last decades ‘information’ has become a central term as well. With the growing use of big-data, information is increasingly seen as the means to generate useful knowledge and power.One of the recently developed model, known as the Volume and Control Model, describes how information is capitalised by global corporations and transforms into economic power. Volume is defined as the informational resources—the amount and diversity of information and the people producing it. Control is the ability to channel the interaction between information and people through two competing mechanisms: popularisation (information relevant to most people), and personalisation (information relevant to each individual person).According to this understanding, knowledge is never neutral, as it determines force relations. The notion of power-knowledge is therefore likely to be employed in critical, everyday contexts. One example of the implications of power-knowledge is Google’s monopoly of knowledge, its PageRank algorithm, and its inevitable commercial and cultural biases around the world, which are based on the volume and control principles.
In information sciences 'knowledge' is defined as a higher form of information, which requires understanding the patterns and creating useful meaning of the information people collect.The creation of this kind of knowledge in a democratic society depends upon people having free access to information, and information that is not shaped and controlled by large scale digital platforms and systems such as Google AdSense. But, all we have got right now is:Surveillance capitalism
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