A Big Movement

Global Power Shift is an international movement to raise public awareness of climate change. 500 young leaders from all over the world met in Istanbul in June and went home to implement their ideas:

I think that's pretty cool.

To invest or to divest: Is that the question?

Source: 'Go Fossil Free' campaign

It all began when the Students for a Just and Stable Future (SJSF) coalition from over 300 universities urged the Harvard Management Company to divest from 200 fossil fuel companies that operate most of the worlds’ reserves.

What exactly is divestment? It’s when institutions remove their investment from select companies to advance a social or political cause. A success story is that of the tobacco movement, which took years to gain momentum until Harvard, Johns Hopkins, and Columbia universities divested their shares, sparking the trend.
 

But Harvard denied SJSF’s plea. Let’s have a look at their argument: 

•  Harvard upholds that the endowment is an economic resource, not ‘an instrument to impel social/political change’. Fair enough. 

•  To further that claim, it states that 'significantly constraining investment options risks significantly constraining investment returns'. So the world's richest academic institution wants to get richer.

•  On a less subjective note, Harvard might be misled: according to the AP, a $1 billion endowment that excludes fossil fuel companies would’ve grown to $2.26 billion over the last ten years, while that which includes fossil fuel companies would have grown to $2.14 billion. $2.26 billion - $2.14 billion? That’s a whopping $120 million difference.

• ‘Universities own a very small fraction of the market capitalization of fossil fuel companies. If we and others were to sell our shares, those shares would no doubt find other willing buyers.’ Oxford’s Smith School also confirms that divestment would not cause substantial decline in share prices.

• However, as Jessie J would say, it's not about the money. The aim is not to create a financial impact, but to increase public awareness of climate change and energy policy. Harvard is a role model, and a role model must lead the way.

• Harvard also believes in using its voice to encourage targeted companies towards sustainability rather than pitting against them. Smith School agrees, promoting communication between company and client with carbon intensity audits, stress test portfolios etc. Basically, divestment is ‘the final, and most drastic, instrument’.

SJSF’s cause may sound too extreme: we still rely on energy produced by these 200 companies for everyday use. Therefore, does it actually make sense to boycott them?  

 Progress of the 'Go Fossil Free' Campaign

The question is, will divestment bring about sustainability? If so, is it more/less/equally as effective as other (often lower-cost) means? Is it worth it?

 Combined revenues of world's largest listed fossil fuel companies

Source: Smith School's 'Stranded Assets' 

At home: UCL currently has investments in Royal Dutch Shell, BG Group and other fossil fuel companies. As part of the ‘Go Fossil Free’ campaign, students have started urging the university to consider divestment. You can read about their policy here. 

References:

Ansar, Atif, Ben Caldecott, and James Tilbury. "Stranded assets and the fossil fuel divestment campaign: what does divestment mean for the valuation of fossil fuel assets?." Stranded Assets Programme. Smith School of Enterprise and the Environment, Jun 2013.

Faust, Drew. "Fossil Fuel Divestment Statement." Office of the President. Harvard University, 03 Oct 2013. 

Hendey, Eric. "Does Divestment Work?." Institute of Politics. Harvard University, 2013.

  

TED Talk: A Happy Song

Jill Sobule playing a happy song about global warming: 

ADB Drops a (Green) Bombshell

“Climate Change to Cost East Asia 5.3% of GDP” cries Bloomberg. “ADB Forecasts Soaring Asian Energy Use Through 2035”, screams the Wall Street Journal. Headlines soar after the Asian Development Bank (ADB) released its 2013 ‘Economics of Climate Change in East Asia’.

The statistics look grim: atmospheric CO₂ concentration has just surpassed 400ppm. Responsible for 30% of world’s total emissions, East Asia expects a rise in temperature of around 1.9-2.6°C by 2050. Flooding, sea-level rise, intense tropical storms, drought, heatwaves - you name it – it’s about to visit. 

 Increase of Climate-Related Natural Disasters (1980-2010) in the PRC - it has already begun!

 Red Areas = East Asian Deltas = Flood-prone Areas

So what’s the point of this publication, other than to fuel the air of eventual doom? It provides strategies to adapt and mitigate climate change in three key sectors (infrastructure, coastal zones and agriculture), including the cost to the economy. The ADB urges East Asian countries to adopt an economic growth model based on low carbon emissions and a more efficient use of existing resources.

Among its suggestions are:

• Jumpstart a regional carbon market to lessen the cost of carbon reduction by 25% through dividends.
• Promote low-carbon technology and enforce technical standards to buildings in order to withstand environmental change.
• Support cost-effective measures: trucks fuelled by compressed natural gas, hybrid passenger cars, etc.

In the infrastructure sector, I think the concept of climate-proofing, or ex-ante (fancy word for ‘based on forecasts’) adaptation will become big: buildings will be designed to cope with future climate change. It’s basically being preventive rather than corrective.

Economically, it’s feasible: initial cost of investment + planned adaptation + operational and management costs < probable costs of replacing/maintaining structures not designed to cope with future climate change.

ADB urges the People’s Republic of China, for one, to climate-proof its roads before temperatures rise and tarmac melts. No kidding.

On a more positive note, “E. Asia needs less than 0.3 percent of GDP (over the years) to mitigate climate change” (and this is in the worst climate scenario), says Jakarta Post. 0.3 percent? I say that’s manageable.

Want the details? Check out the 216-page publication.

Reference:

Westphal, Michael, Gordon Hughes, and Jorn Brommelhorster, eds. "Economics of Climate Change in East Asia". Asian Development Bank.

Seven Billion

There are seven billion people on this planet. Enough food must be grown to feed those seven billion. Enough energy must be generated for those seven billion. Enough forests must be cut down to make room for those seven billion. Imagine the impact seven billion people make on the environment. No wonder we’re entering into a new epoch: the Anthropocene.

Industrial Farming in Spain

Human beings alter the shape of the planet to such a degree that it is now reflected in geology. If a geologist millions of years from now examine the rock record of our time, he will see a change in pollen record which reflects corn, wheat, and other crop signature, a change in sedimentation patterns caused by dams and land denudation, and a change in the carbon signature of the oceans due to acidification, to name but a few.

Jan Zalasiewich, a British stratigrapher, compares what future geologists will see from the rock record of our period to the Ordovician extinction 445 million years ago: ‘a sharp band in which bad things happened’.  Or an asteroid impact: sudden and destructive.

This is why scientists believe we are entering a new epoch, which is defined by changes in sedimentary rock. Nobel Prize Dutch chemist Paul Crutzen popularized the term ‘Anthropocene’ – ‘anthropo’ = man and ‘cene’ = new. He believes the Holocene ended in the late 1700s when ice cores began to show increases in CO₂ levels.

Here’s an overview of what ‘Trees & Towers’ will be about:

• Human-induced environmental change, including ocean acidification, atmospheric pollution and land use, on recent timescales
• New technology and schemes to help alleviate human impact on the planet – namely what the governments/industries/private companies are up to
• Scientific and opinion papers on the future outlook of the Anthropocene

What we do today will decide whether millions of years from now, we’ll be known as another asteroid impact. Now that's bleak.

Here’s a really good article by NatGeo I used for this blog post.

Reference:

Kolbert, Elizabeth. "Enter the Anthropocene: Age of Man." National Geographic. Mar 2011 (http://ngm.nationalgeographic.com/2011/03/age-of-man/kolbert-text/1).