We’re not getting any free lunch from the world’s economies, either. With
only a single year’s lull in 2009 at the height of the financial crisis, we’ve
continued to pour record amounts of carbon into the atmosphere, year after year.
In late May, the International Energy Agency published its latest figures –
CO2 emissions last year rose to 31.6 gigatons, up 3.2 percent from
the year before. America had a warm winter and converted more coal-fired power
plants to natural gas, so its emissions fell slightly; China kept booming, so
its carbon output (which recently surpassed the U.S.) rose 9.3 percent; the
Japanese shut down their fleet of nukes post-Fukushima, so their emissions edged
up 2.4 percent. “There have been efforts to use more renewable energy and
improve energy efficiency,” said Corinne Le Quéré, who runs England’s Tyndall
Centre for Climate Change Research. “But what this shows is that so far the
effects have been marginal.” In fact, study after study predicts that carbon
emissions will keep growing by roughly three percent a year – and at that rate,
we’ll blow through our 565-gigaton allowance in 16 years, around the time
today’s preschoolers will be graduating from high school. “The new data provide
further evidence that the door to a two-degree trajectory is about to close,”
said Fatih Birol, the IEA’s chief economist. In fact, he continued, “When I look
at this data, the trend is perfectly in line with a temperature increase of
about six degrees.” That’s almost 11 degrees Fahrenheit, which would create a
planet straight out of science fiction.
So far, though, such calls have had little effect. We’re in the same position
we’ve been in for a quarter-century: scientific warning followed by political
inaction. Among scientists speaking off the record, disgusted candor is the
rule. One senior scientist told me, “You know those new cigarette packs, where
governments make them put a picture of someone with a hole in their throats? Gas
pumps should have something like that.”
Which is exactly why this new number, 2,795 gigatons, is such a big deal.
Think of two degrees Celsius as the legal drinking limit – equivalent to the
0.08 blood-alcohol level below which you might get away with driving home. The
565 gigatons is how many drinks you could have and still stay below that limit –
the six beers, say, you might consume in an evening. And the 2,795 gigatons?
That’s the three 12-packs the fossil-fuel industry has on the table, already
opened and ready to pour.
If you told Exxon or Lukoil that, in order to avoid wrecking the climate,
they couldn’t pump out their reserves, the value of their companies would
plummet. John Fullerton, a former managing director at JP Morgan who now runs
the Capital Institute, calculates that at today’s market value, those 2,795
gigatons of carbon emissions are worth about $27 trillion. Which is to say, if
you paid attention to the scientists and kept 80 percent of it underground,
you’d be writing off $20 trillion in assets. The numbers aren’t exact, of
course, but that carbon bubble makes the housing bubble look small by
comparison. It won’t necessarily burst – we might well burn all that carbon, in
which case investors will do fine. But if we do, the planet will crater. You can
have a healthy fossil-fuel balance sheet, or a relatively healthy planet – but
now that we know the numbers, it looks like you can’t have both. Do the math:
2,795 is five times 565. That’s how the story ends.
So
far, as I said at the start, environmental efforts to tackle global warming have
failed. The planet’s emissions of carbon dioxide continue to soar, especially as
developing countries emulate (and supplant) the industries of the West. Even in
rich countries, small reductions in emissions offer no sign of the real break
with the status quo we’d need to upend the iron logic of these three numbers.
Germany is one of the only big countries that has actually tried hard to change
its energy mix; on one sunny Saturday in late May, that northern-latitude nation
generated nearly half its power from solar panels within its borders. That’s a
small miracle – and it demonstrates that we have the technology to solve our
problems. But we lack the will. So far, Germany’s the exception; the rule is
ever more carbon.
This record of failure means we know a lot about what strategies
don’t work. Green groups, for instance, have spent a lot of time trying
to change individual lifestyles: the iconic twisty light bulb has been installed
by the millions, but so have a new generation of energy-sucking flatscreen TVs.
Most of us are fundamentally ambivalent about going green: We like cheap flights
to warm places, and we’re certainly not going to give them up if everyone else
is still taking them. Since all of us are in some way the beneficiaries of cheap
fossil fuel, tackling climate change has been like trying to build a movement
against yourself – it’s as if the gay-rights movement had to be constructed
entirely from evangelical preachers, or the abolition movement from
slaveholders.
People perceive – correctly – that their individual actions will not make a
decisive difference in the atmospheric concentration of CO2; by 2010, a poll
found that “while recycling is widespread in America and 73 percent of those
polled are paying bills online in order to save paper,” only four percent had
reduced their utility use and only three percent had purchased hybrid cars.
Given a hundred years, you could conceivably change lifestyles enough to matter
– but time is precisely what we lack.
A more efficient method, of course, would be to work through the political
system, and environmentalists have tried that, too, with the same limited
success. They’ve patiently lobbied leaders, trying to convince them of our peril
and assuming that politicians would heed the warnings. Sometimes it has seemed
to work. Barack Obama, for instance, campaigned more aggressively about climate
change than any president before him – the night he won the nomination, he told
supporters that his election would mark the moment “the rise of the oceans began
to slow and the planet began to heal.” And he has achieved one significant
change: a steady increase in the fuel efficiency mandated for automobiles. It’s
the kind of measure, adopted a quarter-century ago, that would have helped
enormously. But in light of the numbers I’ve just described, it’s obviously a
very small start indeed.
At this point, effective action would require actually keeping most of the
carbon the fossil-fuel industry wants to burn safely in the soil, not just
changing slightly the speed at which it’s burned. And there the president,
apparently haunted by the still-echoing cry of “Drill, baby, drill,” has gone
out of his way to frack and mine. His secretary of interior, for instance,
opened up a huge swath of the Powder River Basin in Wyoming for coal extraction:
The total basin contains some 67.5 gigatons worth of carbon (or more than 10
percent of the available atmospheric space). He’s doing the same thing with
Arctic and offshore drilling; in fact, as he explained on the stump in March,
“You have my word that we will keep drilling everywhere we can… That’s a
commitment that I make.” The next day, in a yard full of oil pipe in Cushing,
Oklahoma, the president promised to work on wind and solar energy but, at the
same time, to speed up fossil-fuel development: “Producing more oil and gas here
at home has been, and will continue to be, a critical part of an
all-of-the-above energy strategy.” That is, he’s committed to finding even more
stock to add to the 2,795-gigaton inventory of unburned carbon.
Sometimes the irony is almost Borat-scale obvious: In early June, Secretary
of State Hillary Clinton traveled on a Norwegian research trawler to see
firsthand the growing damage from climate change. “Many of the predictions about
warming in the Arctic are being surpassed by the actual data,” she said,
describing the sight as “sobering.” But the discussions she traveled to
Scandinavia to have with other foreign ministers were mostly about how to make
sure Western nations get their share of the estimated $9 trillion in oil (that’s
more than 90 billion barrels, or 37 gigatons of carbon) that will become
accessible as the Arctic ice melts. Last month, the Obama administration
indicated that it would give Shell permission to start drilling in sections of
the Arctic.
Almost every government with deposits of hydrocarbons straddles the same
divide. Canada, for instance, is a liberal democracy renowned for its
internationalism – no wonder, then, that it signed on to the Kyoto treaty,
promising to cut its carbon emissions substantially by 2012. But the rising
price of oil suddenly made the tar sands of Alberta economically attractive –
and since, as NASA climatologist James Hansen pointed out in May, they contain
as much as 240 gigatons of carbon (or almost half of the available space if we
take the 565 limit seriously), that meant Canada’s commitment to Kyoto was
nonsense. In December, the Canadian government withdrew from the treaty before
it faced fines for failing to meet its commitments.
The same kind of hypocrisy applies across the ideological board: In his
speech to the Copenhagen conference, Venezuela’s Hugo Chavez quoted Rosa
Luxemburg, Jean-Jacques Rousseau and “Christ the Redeemer,” insisting that
“climate change is undoubtedly the most devastating environmental problem of
this century.” But the next spring, in the Simon Bolivar Hall of the state-run
oil company, he signed an agreement with a consortium of international players
to develop the vast Orinoco tar sands as “the most significant engine for a
comprehensive development of the entire territory and Venezuelan population.”
The Orinoco deposits are larger than Alberta’s – taken together, they’d fill up
the whole available atmospheric space.
So:
the paths we have tried to tackle global warming have so far produced only
gradual, halting shifts. A rapid, transformative change would require building a
movement, and movements require enemies. As John F. Kennedy put it, “The civil
rights movement should thank God for Bull Connor. He’s helped it as much as
Abraham Lincoln.” And enemies are what climate change has lacked.
But what all these climate numbers make painfully, usefully clear is that the
planet does indeed have an enemy – one far more committed to action than
governments or individuals. Given this hard math, we need to view the
fossil-fuel industry in a new light. It has become a rogue industry, reckless
like no other force on Earth. It is Public Enemy Number One to the survival of
our planetary civilization. “Lots of companies do rotten things in the course of
their business – pay terrible wages, make people work in sweatshops – and we
pressure them to change those practices,” says veteran anti-corporate leader
Naomi Klein, who is at work on a book about the climate crisis. “But these
numbers make clear that with the fossil-fuel industry, wrecking the planet is
their business model. It’s what they do.”
According to the Carbon Tracker report, if Exxon burns its current reserves,
it would use up more than seven percent of the available atmospheric space
between us and the risk of two degrees. BP is just behind, followed by the
Russian firm Gazprom, then Chevron, ConocoPhillips and Shell, each of which
would fill between three and four percent. Taken together, just these six firms,
of the 200 listed in the Carbon Tracker report, would use up more than a quarter
of the remaining two-degree budget. Severstal, the Russian mining giant, leads
the list of coal companies, followed by firms like BHP Billiton and Peabody. The
numbers are simply staggering – this industry, and this industry alone, holds
the power to change the physics and chemistry of our planet, and they’re
planning to use it.
They’re clearly cognizant of global warming – they employ some of the world’s
best scientists, after all, and they’re bidding on all those oil leases made
possible by the staggering melt of Arctic ice. And yet they relentlessly search
for more hydrocarbons – in early March, Exxon CEO Rex Tillerson told Wall Street
analysts that the company plans to spend $37 billion a year through 2016 (about
$100 million a day) searching for yet more oil and gas.
There’s not a more reckless man on the planet than Tillerson. Late last
month, on the same day the Colorado fires reached their height, he told a New
York audience that global warming is real, but dismissed it as an “engineering
problem” that has “engineering solutions.” Such as? “Changes to weather patterns
that move crop-production areas around – we’ll adapt to that.” This in a week
when Kentucky farmers were reporting that corn kernels were “aborting” in record
heat, threatening a spike in global food prices. “The fear factor that people
want to throw out there to say, ‘We just have to stop this,’ I do not accept,”
Tillerson said. Of course not – if he did accept it, he’d have to keep his
reserves in the ground. Which would cost him money. It’s not an engineering
problem, in other words – it’s a greed problem.
You could argue that this is simply in the nature of these companies – that
having found a profitable vein, they’re compelled to keep mining it, more like
efficient automatons than people with free will. But as the Supreme Court has
made clear, they are people of a sort. In fact, thanks to the size of its
bankroll, the fossil-fuel industry has far more free will than the rest of us.
These companies don’t simply exist in a world whose hungers they fulfill – they
help create the boundaries of that world.
Left to our own devices, citizens might decide to regulate carbon and stop
short of the brink; according to a recent poll, nearly two-thirds of Americans
would back an international agreement that cut carbon emissions 90 percent by
2050. But we aren’t left to our own devices. The Koch brothers, for instance,
have a combined wealth of $50 billion, meaning they trail only Bill Gates on the
list of richest Americans. They’ve made most of their money in hydrocarbons,
they know any system to regulate carbon would cut those profits, and they
reportedly plan to lavish as much as $200 million on this year’s elections.
In
2009, for the first time, the U.S. Chamber of Commerce surpassed both the
Republican and Democratic National Committees on political spending; the
following year, more than 90 percent of the Chamber’s cash went to GOP
candidates, many of whom deny the existence of global warming. Not long ago, the
Chamber even filed a brief with the EPA urging the agency not to regulate carbon
– should the world’s scientists turn out to be right and the planet heats up,
the Chamber advised, “populations can acclimatize to warmer climates via a range
of behavioral, physiological and technological adaptations.” As radical goes,
demanding that we change our physiology seems right up there.
Environmentalists, understandably, have been loath to make the fossil-fuel
industry their enemy, respecting its political power and hoping instead to
convince these giants that they should turn away from coal, oil and gas and
transform themselves more broadly into “energy companies.” Sometimes that
strategy appeared to be working – emphasis on appeared. Around the turn of the
century, for instance, BP made a brief attempt to restyle itself as “Beyond
Petroleum,” adapting a logo that looked like the sun and sticking solar panels
on some of its gas stations. But its investments in alternative energy were
never more than a tiny fraction of its budget for hydrocarbon exploration, and
after a few years, many of those were wound down as new CEOs insisted on
returning to the company’s “core business.” In December, BP finally closed its
solar division. Shell shut down its solar and wind efforts in 2009. The five
biggest oil companies have made more than $1 trillion in profits since the
millennium – there’s simply too much money to be made on oil and gas and coal to
go chasing after zephyrs and sunbeams.
Much of that profit stems from a single historical accident: Alone among
businesses, the fossil-fuel industry is allowed to dump its main waste, carbon
dioxide, for free. Nobody else gets that break – if you own a restaurant, you
have to pay someone to cart away your trash, since piling it in the street would
breed rats. But the fossil-fuel industry is different, and for sound historical
reasons: Until a quarter-century ago, almost no one knew that CO2 was dangerous.
But now that we understand that carbon is heating the planet and acidifying the
oceans, its price becomes the central issue.
If you put a price on carbon, through a direct tax or other methods, it would
enlist markets in the fight against global warming. Once Exxon has to pay for
the damage its carbon is doing to the atmosphere, the price of its products
would rise. Consumers would get a strong signal to use less fossil fuel – every
time they stopped at the pump, they’d be reminded that you don’t need a
semimilitary vehicle to go to the grocery store. The economic playing field
would now be a level one for nonpolluting energy sources. And you could do it
all without bankrupting citizens – a so-called “fee-and-dividend” scheme would
put a hefty tax on coal and gas and oil, then simply divide up the proceeds,
sending everyone in the country a check each month for their share of the added
costs of carbon. By switching to cleaner energy sources, most people would
actually come out ahead.
There’s only one problem: Putting a price on carbon would reduce the
profitability of the fossil-fuel industry. After all, the answer to the question
“How high should the price of carbon be?” is “High enough to keep those carbon
reserves that would take us past two degrees safely in the ground.” The higher
the price on carbon, the more of those reserves would be worthless. The fight,
in the end, is about whether the industry will succeed in its fight to keep its
special pollution break alive past the point of climate catastrophe, or whether,
in the economists’ parlance, we’ll make them internalize those
externalities.
It’s
not clear, of course, that the power of the fossil-fuel industry can be broken.
The U.K. analysts who wrote the Carbon Tracker report and drew attention to
these numbers had a relatively modest goal – they simply wanted to remind
investors that climate change poses a very real risk to the stock prices of
energy companies. Say something so big finally happens (a giant hurricane swamps
Manhattan, a megadrought wipes out Midwest agriculture) that even the political
power of the industry is inadequate to restrain legislators, who manage to
regulate carbon. Suddenly those Chevron reserves would be a lot less valuable,
and the stock would tank. Given that risk, the Carbon Tracker report warned
investors to lessen their exposure, hedge it with some big plays in alternative
energy.
“The regular process of economic evolution is that businesses are left with
stranded assets all the time,” says Nick Robins, who runs HSBC’s Climate Change
Centre. “Think of film cameras, or typewriters. The question is not whether this
will happen. It will. Pension systems have been hit by the dot-com and credit
crunch. They’ll be hit by this.” Still, it hasn’t been easy to convince
investors, who have shared in the oil industry’s record profits. “The reason you
get bubbles,” sighs Leaton, “is that everyone thinks they’re the best analyst –
that they’ll go to the edge of the cliff and then jump back when everyone else
goes over.”
So pure self-interest probably won’t spark a transformative challenge to
fossil fuel. But moral outrage just might – and that’s the real meaning of this
new math. It could, plausibly, give rise to a real movement.
Once, in recent corporate history, anger forced an industry to make basic
changes. That was the campaign in the 1980s demanding divestment from companies
doing business in South Africa. It rose first on college campuses and then
spread to municipal and state governments; 155 campuses eventually divested, and
by the end of the decade, more than 80 cities, 25 states and 19 counties had
taken some form of binding economic action against companies connected to the
apartheid regime. “The end of apartheid stands as one of the crowning
accomplishments of the past century,” as Archbishop Desmond Tutu put it, “but we
would not have succeeded without the help of international pressure,” especially
from “the divestment movement of the 1980s.”
The fossil-fuel industry is obviously a tougher opponent, and even if you
could force the hand of particular companies, you’d still have to figure out a
strategy for dealing with all the sovereign nations that, in effect, act as
fossil-fuel companies. But the link for college students is even more obvious in
this case. If their college’s endowment portfolio has fossil-fuel stock, then
their educations are being subsidized by investments that guarantee they won’t
have much of a planet on which to make use of their degree. (The same logic
applies to the world’s largest investors, pension funds, which are also
theoretically interested in the future – that’s when their members will “enjoy
their retirement.”) “Given the severity of the climate crisis, a comparable
demand that our institutions dump stock from companies that are destroying the
planet would not only be appropriate but effective,” says Bob Massie, a former
anti-apartheid activist who helped found the Investor Network on Climate Risk.
“The message is simple: We have had enough. We must sever the ties with those
who profit from climate change – now.”
Movements rarely have predictable outcomes. But any campaign that weakens the
fossil-fuel industry’s political standing clearly increases the chances of
retiring its special breaks. Consider President Obama’s signal achievement in
the climate fight, the large increase he won in mileage requirements for cars.
Scientists, environmentalists and engineers had advocated such policies for
decades, but until Detroit came under severe financial pressure, it was
politically powerful enough to fend them off. If people come to understand the
cold, mathematical truth – that the fossil-fuel industry is systematically
undermining the planet’s physical systems – it might weaken it enough to matter
politically. Exxon and their ilk might drop their opposition to a
fee-and-dividend solution; they might even decide to become true energy
companies, this time for real.
Even if such a campaign is possible, however, we may have waited too long to
start it. To make a real difference – to keep us under a temperature increase of
two degrees – you’d need to change carbon pricing in Washington, and then use
that victory to leverage similar shifts around the world. At this point, what
happens in the U.S. is most important for how it will influence China and India,
where emissions are growing fastest. (In early June, researchers concluded that
China has probably under-reported its emissions by up to 20 percent.) The three
numbers I’ve described are daunting – they may define an essentially impossible
future. But at least they provide intellectual clarity about the greatest
challenge humans have ever faced. We know how much we can burn, and we know
who’s planning to burn more. Climate change operates on a geological scale and
time frame, but it’s not an impersonal force of nature; the more carefully you
do the math, the more thoroughly you realize that this is, at bottom, a moral
issue; we have met the enemy and they is Shell.
Meanwhile the tide of numbers continues. The week after the Rio conference
limped to its conclusion, Arctic sea ice hit the lowest level ever recorded for
that date. Last month, on a single weekend, Tropical Storm Debby dumped more
than 20 inches of rain on Florida – the earliest the season’s fourth-named
cyclone has ever arrived. At the same time, the largest fire in New Mexico
history burned on, and the most destructive fire in Colorado’s annals claimed
346 homes in Colorado Springs – breaking a record set the week before in Fort
Collins. This month, scientists issued a new study concluding that global
warming has dramatically increased the likelihood of severe heat and drought –
days after a heat wave across the Plains and Midwest broke records that had
stood since the Dust Bowl, threatening this year’s harvest. You want a big
number? In the course of this month, a quadrillion kernels of corn need to
pollinate across the grain belt, something they can’t do if temperatures remain
off the charts. Just like us, our crops are adapted to the Holocene, the
11,000-year period of climatic stability we’re now leaving… in the dust.
Source: August 2nd, 2012 issue of Rolling Stone.
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If the pictures of those towering wildfires in Colorado haven’t convinced you, or the size of your AC bill this summer, here are some hard numbers about climate change: June broke or tied 3,215 high-temperature records across the United States. That followed the warmest May on record for the Northern Hemisphere – the 327th consecutive month in which the temperature of the entire globe exceeded the 20th-century average, the odds of which occurring by simple chance were 3.7 x 10-99, a number considerably larger than the number of stars in the universe.
