The divestment debate: Should we profit from climate-killing corporations?

Investors have long made money -- lots of money -- from corporations that exploit or trade in polluting fossil fuels.  As climate change worsens, calls to halt such investments have grown.  Here, Australian conservationist Wayne Branden outlines the case for divesting from corporations that profit while the planet burns:

“If it’s wrong to wreck the climate, then it’s wrong to profit from that wreckage.”  - Bill McKibben

An Urgent Task Ahead

In an effort to combat harmful climate change, 195 nations have agreed to limit average global temperature increases to no more than 2°C above pre-industrial levels. 

This amount of warming could still possibly cause the Greenland ice sheet to melt, eventually raising sea levels by as much as seven meters.  Beyond that, it is estimated, things would get a lot worse.        

To have just a 50:50 chance of staying within the two-degree limit, it has been estimated that 88 percent of global coal reserves, 52 percent of gas reserves, and 35 percent of oil reserves must be left in the ground.  They must not be burned.  If they are burned, the analyses suggest, it will wreck our climate

And if these fossil fuels cannot be burned, then they will become stranded economic assets. 

Therein lays a serious conundrum -- because we are talking about really serious money.  Recently, Citigroup analysts suggested that stranded assets relating to fossil fuels could total up to US$100 trillion in value. 

Mining corporations don't want to hear any such nonsense.  The corporations intend to continue extracting all economically viable hydrocarbon deposits, regardless of their impact on the climate.  They have already discovered five times more hydrocarbons than can be safely burned without wrecking our climate.  And these corporations continue to spend hundreds of billions of dollars a year -- exploring for more fossil fuels that must not be burned.

Big money, big power

The mining industry wields considerable political power -- notably in Australia and the U.S. -- but also in many other nations. 

Those who oppose big mining do so at their peril.  In Australia in 2010, then-Prime Minister Kevin Rudd proposed a Resources Super Profit Tax on the mining industry -- which at the time was raking in massive profits. 

The miners ran an A$22 million public-relations campaign against the Rudd Government.  In just six weeks, Rudd was out, and the campaign had effectively un-seated a democratically elected Prime Minister

To prevent real action on climate change, corporations fund pseudo-science denialist groups.  They also hire public-relations advisers and lobbyists, and they donate to politicians’ election campaigns.  In this way, they have been able to strongly influence government policy and legislation.  

Do the Right Thing

In the fight against apartheid in South Africa during the 1980s, international divestment and economic embargoes helped to starve that regime of funds and legitimacy.  Divestment became a powerful tool in the battle to do what was right.

Divestment can also reduce the legitimacy of the big carbon-polluting corporations.  The global campaign to divest from fossil fuel industries has been led by an organization known as "350.org".  Founded by Bill McKibben, it derives its name from the level of atmospheric carbon dioxide considered to be safe, 350 ppm. 

More recently, The Guardian newspaper has teamed with 350.org to run its own “Keep it in the Ground” campaign -- an effort to advance the divestment initiative.

Divestment can be undertaken at both personal and institutional levels.  Massive amounts of money are held in personal bank accounts and retirement funds.  In Australia, for example, all of the biggest banks are major investors in coal, oil, and gas projects. 

In Australia, banks are being pressured not to invest in a massive coal-mining project that would double Australia’s coal exports.  Environmental groups have successfully lobbied 12 major international banks not to fund this project.  Recently, Australia’s Commonwealth Bank also withdrew its support -- partly because of environmental pressures and partly because of declining coal prices.

Retirement funds are also invested heavily in fossil fuels.  Globally, around 55 percent of retirement funds are invested in fossil fuel projects, while less than two percent is invested in energy efficiency and renewable energy.  Some larger funds offer low fossil fuel-investment streams, and some smaller funds do not invest in fossil fuels at all.

Interest in fossil fuel divestment is growing, with more and more institutions pledging either partial or full divestment.  These include the Rockefeller Brothers Fund, the Norwegian Sovereign Wealth Fund, the World Council of Churches, the British Medical Association, and the Guardian Media Group.  This is just a sampling -- a full list can be seen here.

Universities Are Getting Smart Too

A growing number of universities -- from the U.S., UK, Australia, New Zealand, and elsewhere -- have also pledged to divest either partially or fully.  But they're catching plenty of heat.

In Australia -- where coal mining is king -- Australian National University dared to adopt a partial divestment policy in October 2014.  The Australian Financial Review subsequently ran 53 articles attacking ANU, twelve of them on its front page. 

The newspaper is owned by Fairfax Media, which includes among its shareholders Gina Rinehart, a mining billionaire. 

Such vigorous attacks suggest the mining industry sees divestment as a significant threat to their political power base.

Running Scared

By itself, divestment might not strongly affect the share prices of wealthy mining corporations.  But its effects could be potent nonetheless. 

It could weaken the moral license of big polluters, reducing their political power.  By stigmatizing the industry, it can limit its ability to do business and exert political influence.  It then becomes easier to convince governments to start doing better in terms of their policies and legislation. 

The divestment wave is growing.  And as it grows, more and more people will realize that coal, oil, and gas are bad investments.  Not just a bad and weakening source of profits, but a morally bad choice for our planet, our children, and our future.

Australian government favors coal mines over environmental protection

Things are getting hot Down Under.  Australian researcher Dr April Reside tells us about the Australian government's scheme to gut key provisions of a vital environmental protections law.  And as if the planet weren't warm enough already, it's all about digging up and selling more coal. 

Abbott fiddles while the world burns

Abbott fiddles while the world burns

The conservative Tony Abbott government in Australia is proposing alarming changes to the country's Environmental Protection and Biodiversity Conservation (EPBC) Act 1999 -- a remarkable move that would prevent environment groups from challenging many damaging development projects.

This has all come to a head over the Carmichael Coal Mine -- a plan to build a massive mine in central Queensland in order to export 60 million of tons of coal to India each year. 

Coal, of course, is the dirtiest of all fossil fuels, and India's plan to burn it by the shipload for electricity is bad news for the planet.

The Abbott government is in a tizzy after after a community organization, the Mackay Conservation Group, challenged the approval of the Carmichael Mine in Australia's Federal Court. 

The community group says Environment Minister Greg Hunt didn’t properly consider the impact the mine would have on two threatened species, the yakka skink and ornamental snake.

The mine site also sustains the largest population of the southern subspecies of the Black-throated Finch, which is endangered. 

The implications of the mega-mine go well beyond a few imperiled species.  If the mine goes ahead, it will be one of the biggest in the world -- and the emissions from burning its mountains of coal would cancel out all gains made from Australia’s current emissions-reduction strategy.

On top of the frightening precedent it would set, the Abbott government appears to be double-dealing. 

There was an agreement among the Environment Minister, the mine's proponent (the Adani Group from India), and the Mackay Conservation Group that the mine's approval should be set aside temporarily, until the conservation issues could be properly considered by the Minister.  The parties agreed that the decision would be reconsidered in six to eight weeks.

But the federal government responded by attacking environmental groups opposed to the mine, calling them “vigilantes”. 

And now, the government wants to wipe out the right of environmental groups to challenge decisions that violate the EPBC law -- despite the fact that less than 0.4% of all resource-development projects have been halted under the EPBC Act. 

All this comes amid increasing calls by Australia's neighboring nations for a moratorium on new coal mines to prevent dangerous climate change.

The mine continues to attract heated controversy.  Building it would require a major upgrade to existing port facilities on the Queensland coast and could have negative impacts on critical wetlands, culturally important indigenous lands, and even the Great Barrier Reef

And despite all the fuss, many believe that the mine won't even be financially viable in the long term because of declining coal prices and India's pledge to halt coal imports in the next few years.

This isn't the first time the Abbott government has attacked environmental groups, and it may not be the last.  It's time to turn up the heat on the coal-loving Abbott government -- by signing this petition -- before it makes the world hotter for all of the rest of us.

China screams about arrest of its illegal loggers

The nation that is provoking more environmental degradation than any other today is very, very upset.

Timber smuggled from Myanmar to China

Timber smuggled from Myanmar to China

Virtually everywhere one looks -- from the Asia-Pacific to Africa, and from Siberia to South and Central America -- China is behind hard-driving schemes to exploit the planet's natural resources. 

China is not only the world's biggest polluter in terms of greenhouse gas emissions, but it is the largest global consumer of timber, construction minerals, iron ores, wildlife, and many other natural resources -- considerable amounts of which are obtained illegally, via corruption or smuggling.  

And through its massive investments in new roads, railroads, mining, dams, and other infrastructure, China is also substantially responsible for opening up many of the world's last remaining wild areas to exploitation.

China is upset because the nation of Myanmar (formerly Burma) has just handed out stiff jail sentences for illegal logging to more than 150 Chinese nationals.  The loggers were arrested in January following a crackdown on illegal forest activities.

Editorials in Chinese state-run media have expressed outrage at the arrests, demanding that those arrested be returned to China. 

For years China has sucked up timber and other natural resources in Myanmar, leading to growing frustration and resentment there.

A court in northern Myanmar -- where illegal logging has been especially rampant -- just handed out 'life' sentences to 153 Chinese loggers.  Such sentences typically run for 20 years in Myanmar. 

Despite the heated Chinese protests, the Myanmar government said it would not interfere in the judicial process. 

While the sentences are certainly severe, they reflect a growing view that Chinese investors, corporations, and workers often display a predatory attitude when working in foreign nations.

China is overwhelmingly the biggest global driver of the illegal wildlife trade, consuming vast quantities of ivory, pelts, bones, shark fins, and hundreds of other wildlife products, including those from a number of endangered species.

No nation consumes more tropical timber than China.  It has been heavily criticized both for failing to support illegal-logging measures internationally and for pursuing mainly raw logs from timber-exporting nations. 

China's addiction to timber

China's addiction to timber

Raw logs, which are unprocessed, provide only minimal employment, industrial development, and income for timber-exporting countries, and thus are the least profitable way for a nation to exploit its forests.

Last April, Myanmar banned the export of raw logs.  But many Chinese loggers have paid little attention to the new law and have been engaged in smuggling rings that have effectively stolen huge quantities of Myanmar's timber.

Timber smuggled into China from 2000 to 2013 was worth nearly US$6 billion, according to Myanmar government estimates.

Unless China reigns in its aggressive tactics, expect more backlash from developing nations that are feeling ripped-off.  No matter how much China screams about it. 

 

Want clean water? Save your forests!

Cities can ensure they have a cheap and abundant supply of clean water by protecting and regenerating forests in their surrounding watersheds, according to a major analysis just undertaken in Malaysia.

Forests are a vital source of clean water -- and important for lots of other reasons too.

Forests are a vital source of clean water -- and important for lots of other reasons too.

Jeffrey Vincent from Duke University, USA and his colleagues have just published the largest cost-benefit analysis ever conducted in the tropics, and they find that pristine and even selectively logged forests are very cost-effective ways to produce clean, drinkable water. 

Vincent and colleagues ran their analyses under a wide range of scenarios.  They used as a baseline the costs of standard water-treatment plants, which are often required to make polluted water safe to drink.

The authors found that the relative advantages of forests depend on local circumstances, with the financial benefits being greater in some situations than others. 

Also, if one factors in profits that can be made by exploiting the forests -- such as by converting them to agriculture -- then the numbers could change. 

The problem, of course, is that waters that drain off of agricultural lands are often polluted by fertilizers, pesticides, and organic wastes, making expensive water-treatment necessary.

The authors argue that, beyond water purification, intact forests have many other financial and non-financial values. 

For instance, they store large stocks of carbon, and thereby reduce greenhouse gas emissions. 

They also can harbor enormous biodiversity while helping to attract substantial income from ecotourism.  Remarkably, it's currently estimated that protected areas across the world attract some 8 billion visits annually, underscoring their financial value for local communities.

Furthermore, via the process of evapotranspiration, forests emit enormous quantities of water vapor.  For example, one-third to one-half all the rainfall that falls on a tropical forest is quickly recycled back to the atmosphere, as water vapor.

This water vapor (plus natural organic aerosols emitted from forests) help to form clouds, which in turn reflect solar radiation back into outer space, thereby reducing global warming. 

Forests are natural cloud-makers.

Forests are natural cloud-makers.

Such clouds also help to produce life-giving rainfall during the dry season -- when forests are most drought-stressed and prone to fires.

Finally, forests are very good at reducing destructive floods.  They tend to act like giant biological sponges, trapping water and releasing it slowly, thereby reducing downstream flooding.  Especially in areas where forests are denuded, flooding can cause billions of dollars in damage and costs thousands of lives each year.

The conclusion: It's increasingly becoming apparent that it's smart to conserve pristine and selectively logged forests -- even when one uses just hard, cold economic logic. 

 

The man who loves global warming

Alan Oxley is a man many people love to hate.  Why? 

Inhale deeply and it'll all be fine...

Inhale deeply and it'll all be fine...

Oxley, a former Australian trade ambassador, is one of the leading hired guns for environmentally damaging industries -- such as big coal miners, rainforest loggers, and oil palm producers. 

Oxley's latest stunt?  He's fighting the efforts of universities and other shareholders to divest from heavily polluting industries, such as massive coal mines and other fossil fuels.

Coal, after all, is just about the worst fuel imaginable from a global-warming perspective, because it has such a high carbon density China's growing reliance on coal -- it's now building an average of one new coal-fired generating plant per week -- is a key reason why it's blasted past the U.S. to become the world's biggest emitter of greenhouse gases.

Thanks to massive coal consumption, China's carbon dioxide emissions have skyrocketed.

Thanks to massive coal consumption, China's carbon dioxide emissions have skyrocketed.

Oxley's latest crusade follows notable divestment initiatives by Stanford University and, most recently, by Australian National University.  That two leading academic institutions are selling off their investments in industries that drive global warming is sending a chill down the spines of those heavy polluters.

The fact that Oxley has joined the fray shows just how nervous the big polluters are becoming.  Rushing to Oxley's aid was the arch-conservative Australian Treasurer, Joe Hockey, who also criticized Australian National University.   

The big polluters are not really worried about losing investments from a few universities.  They are, however, petrified by the thought that this trickle of divestment initiatives could become a flood -- that it could become positively unfashionable to invest in big polluters.

For that reason, the big coal miners are happy to keep lining the pockets of Alan Oxley -- the man who seems to love global warming.