Was Climate Week a good week?

climate_summit_2014A reporter’s job is sometimes fun and glamorous, often not. My trip to New York for “Climate Week” was not. It was, in fact, a bit of a fiasco. I had hoped to cover a Climate Group event on Monday but was told that I had to be there by 10 a.m., without luggage, for security reasons. This was all but impossible since I was coming up from DC that morning. So I watched a live stream of the event, which froze and skipped during an interview with Apple CEO Time Cook.

Meanwhile, I twice tried to pick up my UN credentials and both times found lines winding up 45th Street, with estimated wait times of about two hours. Crazy, no? The UN knows how many credentials, roughly, it will have to give out because they all required advance approval, and still it can’t staff its desks properly. These are the people want to oversee a global regulatory scheme to manage greenhouse gas emissions. Good luck with that.

I say this not to complain–I have a great job, mostly–but to explain that my less-than-sunny mood during the week might have affected my coverage. (I hope not but we’re all human.) I wrote two stories for Guardian Sustainable Business, one pegged to Tim Cook’s interview, which eventually found its way online, and another looking at the yawning gap between the rhetoric at Climate Week events and the reality that the world is losing the battle, such as it is, to curb climate change.

Needless to say, I don’t think it’s time to give up. I’d like to do some more reporting before coming to any conclusions but it seems increasingly possible that the US and China can lead the way to global GHG reductions, outside of the UN process, with support from the EU and Japan. Getting a dozen so-called major emitters to work on the problem might prove more fruitful hat another confab of 190 countries at COP-20-something-but-who’s-counting.

Later, I was heartened to read about an agreement announced this week called the New York declaration on forests under which governments and global companies agreed to bring a halt to deforestation by 2030. Again, I need to do some more reporting on this. but the commitments from such big firms as Cargill and Asia Pulp and Paper are signs that we may actually be winning the battle to slow or stop deforestation. A big deal, if true.

In any event, here’s how my story on Tim Cook and the Climate Group event begins:

Tim Cook is the CEO of Apple, possibly the world’s most innovative company and inarguably its most valuable – just ahead of fossil-fuel giant ExxonMobil. So his appearance at the opening of Climate Week 2014 on Monday lent a little celebrity buzz to a day which otherwise had a been-there-done-that feeling about it.

The climate change issue, Cook told a gathering of business and political leaders in New York, resonates with Apple’s workers and with its customers, which is why the company has moved from environmental laggard to green leader in recent years, winning plaudits even from Greenpeace.

“The long-term consequences of not addressing climate are huge,” he said. “I don’t think anyone can overstate that.”

You can read the rest here.

My broader look at Climate Week begins this way, and later references a new study on how the world is building coal plants faster than it is dismantling them:

Covering UN meetings is not a job for the faint of heart, and this week’s climate summit in New York has been no exception. Two-hour waits for credentials are common. Staffers are plentiful, polite and ineffectual. Barricades, private security forces and squadrons of New York’s finest protect the UN compound on Manhattan’s Upper East Side from unwanted incursions from the world beyond.

The summit itself consists of a series of carefully-scripted speeches from business and political leaders. They mix dire warnings with calls to action. Invariably, we are told, no country, company or NGO can solve the problem on its own; we must all work together. Partnerships are key. Climate is the defining issue of our time. The problem is urgent. The time to act is now. The future depends on us.

It is all depressingly familiar to anyone who has been to Durban, Cancun or Copenhagen for summits past.

“You can make history or be vilified by it,” says the newly appointed UN Messenger of Peace on Climate Change, as the official proceedings began on Tuesday. Why, it’s Leonardo DiCaprio of Titanic fame, who knows a disaster in the making when he sees one.

You can read the rest here.

Patagonia’s CEO, marching for climate action

6a00d8341d07fd53ef01b7c6e24a7d970b-500wiRecently, I had lunch with Mary Wenzel, a senior vice president at Wells Fargo who directs the bank’s environmental projects. The bank’s efforts are laudable–it intends to provide $30 billion of financing by 2020 to business opportunities that protect the environment, it’s making its offices more efficient, it’s a big-time supporter of a nonprofit called Grid Alternatives that delivers solar power to low-income people, etc. But when I asked Mary whether Wells Fargo has declared itself to be in favor of  a carbon tax or a cap on carbon dioxide emissions, she told me that, no, that’s a step the bank has not yet been willing to take.

In that regard, Wells Fargo is typical of most big companies in the US. None of the big Wall Street banks–Bank of America, JPMorgan Chase or Citi–has taken a strong political position on the climate issue, as best as I can tell. And although a dozen or so big companies, including an oil company (Shell), utilities (NRG Energy, Duke Energy) and GE joined together back in 2008 to form the U.S. Climate Action Partnership to call for regulation of greenhouse gases, their efforts are now dormant.

With the exception of the work being done by the BICEP group around its Climate Declaration (weakly-worded as it is), America’s corporate leaders have largely been missing in action when it comes to the climate issue.

I thought about all that when I heard today that Patagonia, the outdoor clothing company, is closing its New York stores this Sunday until 3 p.m. so that its employees can join the People’s Climate March. Rose Marcario, Patagonia’s CEO, will join the march. Patagonia has also taken out a full-page ad in today’s New York Times about the march.

In a blog post, Marcario writes about her great-grandfather, an immigrant laborer who with others worked to build on the city’s streets because “they wanted to create a better future for their children and grandchildren.” That’s what this march is about, she writes:

It is the work of this generation to make clear we reject the status quo—a race toward the destruction of our planet and the wild places we play in and love. We cannot sit idly by while large special interests destroy the planet for profit without regard for our children and grandchildren.

We have to keep the pressure on. That means being loud and visible in the streets, in town halls and our capitals, and most important, in our elections—voting for candidates who understand we are facing a climate crisis.

Meantime, Patagonia has launched a crowd-sourced art campaign called Vote the Environment that is designed to inspire voters – especially young people – to support candidates who will act on behalf of the future and the climate in the upcoming midterm election.

Now–I understand that Patagonia is a private company, and a relatively small one, that markets itself to consumers who love the outdoors. It’s a low-risk proposition for Patagonia and Marcario to join a climate march. Cynics will suspect that Patagonia is inviting marchers to gather in its Central Park West store for coffee and bagels on Sunday morning in the hope that they will come back later to buy its pricey gear.

But, even acknowledging that Patagonia is sui generis, I’m struck by the fact that the distance between Patagonia (and a handful of other forward-thinking companies) and mainstream corporate America is so vast. Imagine the CEOs of the big banks or GE or Walmart marching for climate action. It’s inconceivable.

What is conceivable — and what’s fair — is to ask those CEOs to follow the lead of Rose Marcario and a handful of other business leaders (like the Risky Business trio of Hank Paulsen, Michael Bloomberg and Tom Steyer)  by engaging, in a serious way, in the climate debate. That means putting climate regulation at the top of their companies’ Washington agendas, and refusing to support political candidates who don’t have a plan to deal with the climate crisis. If not now, when?

Tax avoidance, and corporate responsibility

uncle-sam-pay-your-taxes1Would you consider Apple, Coca-Cola, General Electric, Google, Microsoft, Nike and PepsiCo good corporate citizens? Certainly they position themselves that way, and they deserve credit for their leadership around human rights (Apple, Nike), climate change (GE), water (Coca-Cola), renewable energy (Google, Microsoft) and sustainable agriculture (PepsiCo).

But when it comes to paying corporate income taxes, they have some explaining to do.

That, at least, is the conclusion that I came to after reading an excellent report on tax avoidance titled Offshore Shell Games, and published last month by Citizens for Tax Justice and US PIRG.

Corporate taxation is all over the news these days as US firms move their headquarters overseas for tax reasons, in a process known as inversion. But aggressive maneuvering to avoid taxes is nothing new, as I wrote today in a story for Guardian Sustainable Business.

Here’s how the story begins:

America’s a great country. That’s why people from all over the world — including, lately and tragically, thousands of poor children from Central America — clamor to get in. So why are some of America’s wealthiest companies trying to get out?

It’s simple, really — they don’t want to pay US taxes.

You’ve probably heard about Walgreen’s, your neighborhood pharmacy that is contemplating moving its headquarters to Switzerland to reduce its tax bill. Medtronic, the big medical device company based in Minneapolis, Minnesota, has plans to move to Ireland, for tax-avoidance purposes. Then there’s Mylan, a maker of generic drugs based near Pittsburgh, Pennsylavia, which intends to incorporate in the Netherlands, where the tax rate is lower. Mylan’s CEO, as it happens, is Heather Bresch — the daughter of US Senator Joe Manchin, a West Virginia Democrat — and she says she has no choice but to go.

Other companies aren’t going so far as to relocate their headquarters, a process known as inversion that often requires them to acquire a company based elsewhere. Instead, to avoid US taxes, they are parking their earnings offshore, often in tax havens like Bermuda and the Cayman Islands that levy no corporate income taxes. That tactic, which like the inversions is legal, is being employed by companies that position themselves as good corporate citizens — among them Apple, Coca-Cola, General Electric, Google, Microsoft, Nike and PepsiCo.

Exploiting loopholes in the tax laws may or may not be legal–the IRS is hopelessly outgunned by big corporate tax departments–but it’s unethical.

The report from Citizens for Tax Justice and US PIRG, which makes for surprisingly compelling reading, details a number of questionable tax avoidance strategies that allow companies to shift earnings, purely for tax purposes, from high-tax jurisdictions like the US to tax havens. Here are my favorite fun facts from the report:

The report found that subsidiaries of US companies reported earning $94bn in Bermuda, which has a gross domestic product of just $6bn. That doesn’t compute. US firms reported earning another $51bn in the Cayman Islands, where GDP is about $3bn.

This is outrageous, and please don’t tell me that the way to fix the problem is to reduce the admittedly high US corporate income tax rate. The US cannot compete with places where the tax rate is zero.

All of these companies, of course, benefit enormously from government services–public education, police, the rule of law, highways, etc. Those companies that don’t pay their fair share shift the burden to others–small businesses that can’t afford high-priced accountants, companies that don’t have overseas operations and therefore can’t take advantage of the opportunity engage in tax-avoiding shenanigans and, of course, the rest of us.

You can read the rest of my story here.

A murmur, not a message

800px-US_Capitol_SouthOne reason why it has been so hard for President Obama and environmentalists to persuade Congress to enact climate-change legislation is strong opposition from much of corporate America. The U.S. Chamber of Commerce, the National Association of Manufacturers and the editorial page of the Wall Street Journal, which is seen as the voice of business, all, when it comes down to it,  oppose a carbon tax or an economy-wide scheme to cap greenhouse gas emissions.

They’ve got some sound reasons for doing so: Climate regulation by the US, if it is not followed by regulation in China and India and the rest of the world, will do little to curb global warming, but it will disadvantage the US economy and cost consumers money by raising energy prices. The thing is, China and India and the rest of the world are unlikely to price carbon unless the US leads the way. And right now it’s “free” for fossil fuel companies and utilities and the rest of us to pollute the air with CO2, and so we do so with impunity.

Thankfully, the chamber, NAM and the Journal don’t speak for all of business. That’s why a business coalition known as BICEP (it stands for Business for Climate and Energy Policy) needs to grow in numbers and in political clout. BICEP favors climate regulation, and its members include such well-known companies as eBay, Gap, Levi Strauss, Mars, Nike and Starbucks. But BICEP, pardon the bad pun, doesn’t carry much weight in your nation’s capital, and it’s fairly easy to understand why.

For the US fossil fuel industry, most of which opposes carbon regulation, the climate issue is a matter of the utmost importance. Environmentalists  who worry about the climate crisis increasingly argue that much of the world’s reserves of coal and oil must be left in the ground, unless and until  engineers come up with practical and cost-effective way to capture CO2 from power plants or from the air.  If that argument that we need to burn dramatically less coal and oil prevails, the stock-market value of the fossil fuel industry would collapse. This is the so-called carbon bubble, and it is an existential threat to the fossil fuel companies.

By contrast, climate change is an important issue Mars, Nike, Starbucks and the other companies in BICEP,  but it’s by no means their biggest issue. They are to be commended for stepping out, but so far they have not thrown the full weight of their Washington operations (or, for that matter, their marketing departments)  behind their position.

That was evident last week when BICEP organized a lobbying day on Capitol Hill. I covered the event for Guardian Sustainable Business. Here is how my story begins:

It is not often that big business comes to Washington to seek regulation. But a group of companies including IKEA, Jones Lang LaSalle, Mars, Sprint, and VF Corp did so this week, asking Congress to take steps to prevent catastrophic climate change.

Executives organized by the business coalition BICEP (Business for Innovative Climate and Energy Policy), testified before a Senate and House task force on climate change, telling lawmakers about their own corporate commitments to reduce carbon pollution. Then they fanned out across the Capitol to lobby on behalf of a clean-energy financing bill.

They did so on the first anniversary of the release of the Climate Declaration, a corporate call-to-action that has been signed by more than 750 companies. It was a reminder to legislators that the US Chamber of Commerce, the coal industry and the Wall Street Journal editorial page do not speak for all of corporate America when they oppose government action to regulate carbon pollution.

“Business is not a monolith,” said Anne Kelley, who coordinates BICEP’s lobbying efforts. “That’s been the message of BICEP since the beginning.”

But if BICEP has shown that hundreds of companies favor political action on climate, its efforts so far have been drowned out in Washington by those of the US Chamber and its allies, a US Senator told the group.

Senator Sheldon Whitehouse, a Rhode Island Democrat and a strong advocate of climate action who convened the hearing, said BICEP’s voice is “a murmur and not a message”, and he urged companies to spend more of their political and reputational capital on the climate issue.

Whitehouse, as the story goes on to explain, urges the BICEP companies to be more forceful. Until more companies understand that the threat of climate change, and the costs of adapting to extreme weather such as heat waves and drought, is a core issue for them, the debate in Washington will be dominated by the likes of the US chamber. And that’s a problem for all of us.

Mike Biddle, libertarian environmentalist

biddle-6307Can a libertarian be an environmentalist?

Mike Biddle would say yes. Like many corporate executives, Biddle is politically conservative. He believes in small government, personal freedom and the power of markets to solve problems. “My Bible is Ayn Rand,” he once said.

But Biddle, who is the founder and longtime CEO of a pioneering plastics reprocessing company called MBA Polymers, would like the US government to regulate his industry—plastic waste. He also accepted government grants to finance the basic research that led to the company’s cutting-edge technology.

Does this make him a hypocrite? Not in my view, and here’s why.

MBA Polymers has built three factories to recycle mixed plastics—one in the UK, one in Austria and one in China. It got started with a pilot plant in Richmond, CA, but shut that down because the company could not get access to a steady supply of plastic waste in the US. Yes, that’s right: Americans generate more waste per capita (“We’re No 1!) than other nations, but most of it winds up either in landfills or shipped to poor countries where it is disassembled under unsafe conditions. Biddle’s company, meanwhile, can  turn mixed plastic waste streams, from discarded electronics and junked automobile, into plastic pellets that are as good a new materials extracted from oil.

When Mike and I met last week, he told me that he’d  like the US government to require companies that manufacture electronics to take responsibility for them at the end of their lives. He’d also like the government to regulate exports of waste. Governments in the EU and Japan have done that, and as a result they have created robust systems for collecting and reprocessing waste that save energy, reduce carbon emissions, reduce the demand for oil and help keep plastics out of the oceans. Not incidentally, these laws also protect the health of poor people in Asia and Africa who sort through electronic waste under hazardous conditions.

Mike argues that this kind of government regulation promotes fair competition and a market solution to the plastic-waste problem. Recycling generates positive externalities—that is, it does good even for those who aren’t involved—while trashing valuable plastics harms workers and the environment. To be sure, the government is favoring one industry (recycling) over another (waste dumping, here or abroad). But you also could argue that all it is doing is requiring companies (electronics manufacturers) and consumers to be responsible for properly disposing of the products that they make and we use.

As Mike told me when we talked: “”We need care about how we unmake our stuff as much as we do about it’s made.”

It’s a close call, but it strikes me as a proper role for government.

I wrote about Mike Biddle the other day for Guardian Sustainable Business. Here’s how my story begins:

This month, Mike Biddle, the founder and longtime CEO of a pioneering plastics-recycling company called MBA Polymers, stepped down as an executive at the firm, ending more than two decades of unrelenting effort to reduce plastic waste.

Biddle’s story is one of great success, as well as ongoing frustration. He sat down with me last week at the 2014 GreenBiz Forum in Phoenix to talk about MBA Polymers, the potential of the so-called circular economy, and why, despite all we know, the vast majority of plastics discarded in the US still wind up in incinerators, landfills or, worse, the ocean.

Plastics, he says, remains “the last frontier of recycling.”

Biddle, who is 58 and has a PhD in chemical engineering from Case Western and an MBA from Stanford, left a good job at Dow Chemical in 1992 in the hope of solving the difficult puzzle of plastics recycling. During the next seven years, he attracted about $7m in grants and loans from the state of California, the Environmental Protection Agency and a plastics industry trade group.

You can read the rest here. I should add that Mike’s enviromental cred is solid. He went hiking in Nepal for his honeymoon, spents lots of time outdoors with his kids and is devoting some of his time now to a nonprofit to protect oceans. Mike will also be speaking at the Fortune Brainstorm Green conference (which I co-chair) in May.

The long journey to “sustainable travel”

tr-travel-smart-ff-miles-608Global travel is a huge business. A billion tourists traveled the world during 2012, and the industry generated more than $2 trillion in direct global contribution to GDP from business and leisure trips, according to the World Travel & Tourism Council (WTTC).

So it’s unfortunate that the travel industry–which depends, more than others, on a healthy planet–is just beginning to get serious about measuring and reducing its environment impact. That, at least, is my conclusion after surveying leading US-based hotel, airline and rental car companies. What’s more, as I’ve thought about the travel business, it’s hard to envision what a truly sustainable travel industry would look like. To dramatically reduce the environmental impact of travel will require the widespread adoption of low carbon fuels, the decarbonization of the electricity sector and radically “greener” buildings, all of which appear to be many years away.

I wrote about the travel industry and sustainability for the current issue of a trade magazine called Global Business Travel Magazine. The industry is clearly moving in the right direction. The question is, at what pace and scale?  In my story on hotels, I wrote:

Every major hotelier—Starwood Marriott, Hilton, Hyatt, IHC, and the rest—has invested in energy and water efficiency, reported its carbon footprint online, reduced waste, organized “green teams” of engaged employees, and embraced social programs ranging from recycling soap and toiletries to teaching employees to recognize and report human sex trafficking. That’s all well and good, but these efforts are not yet comprehensive or comparable in a way that would allow corporate travel buyers and managers (or, for that matter, leisure travelers) to measure one hotel chain against another. Nor are there reliable, broad-based, third-party standards, ratings, or rankings that reward industry leaders and shame laggards, as there are in other business categories, ranging from seafood and forestry to cell phones and appliances.

Essentially, hotel owners and operators have focused on efficiency–a relatively easy win-win because it saves hotel operators money and earns them green credibility. But efficiency can take the industry only so far (pun intended).

My story identifies Marriott as the industry leader but goes on to say that

Marriott—like all of its rivals—is still struggling to balance the goal of sustainability with the need to grow its business. Despite putting a wide range of efficiency measures into place, the company has added rooms in recent years, and as a result its greenhouse gas emissions have grown from 3.19 million metric tons in 2007 to 3.55 million metric tons in 2012—an increase of 11 percent. Scientists say that businesses and individuals have to reduce their absolute carbon emissions dramatically to limit the risks of catastrophic climate impacts.

Can the hotel industry grow while reducing its environmental footprint in absolute terms? It’s hard to see how, at least in the short run. The environmentally responsible thing to do is to travel less. For business travelers, that means meeting via teleconferences and eliminating some trips; many companies are doing that, of course. As for leisure travel, staycations, reading National Geographic or watching the Travel Channel can’t substitute for the real things. And there’s an obvious downside to traveling less: About 101 million people around the world earn a living from the travel biz, according to the WCCT, and some of those jobs will disappear if the industry shrinks.

Airlines are, if anything, in even more of a pickle that hotels. Yes, newer planes are far more efficient than older ones, but the best way to sharply reduce carbon emissions from air travel is by substituting biofuels for petroleum-based fuels. The trouble is, biofuels today are very costly. A carbon tax would encourage airlines and airplane manufacturers to invest more in low-carbon fuels, but the US airline industry has lobbied hard against the EU’s attempts to impose a carbon tax on international air travel because it would raise the cost of plane tickets. Meantime, comfort and efficiency are often at odds. Planes configured to carry more people are good for the planet but not so good for the traveler in the middle seat of row 42.

All of this is a reminder that big environmental problems like climate change simple can’t be solved by individual companies or industries. They require radical system change. This is why it’s so important for responsible businesses to make themselves heard in the public policy arena. The travel industry ought to be a loud voice for a carbon tax and for government support of research into clean technology. That’s the best strategy to bring about a low-carbon economy, and to protect the beautiful places that people like to visit.

You can read my travel industry story here.

Big business loves marriage equality

A tweet from Gap Inc after the Supreme Court overturned DOMA

A tweet from Gap Inc after the Supreme Court overturned DOMA

At Target’s annual shareholder meeting in 2011, Gregg Steinhafel, the company’s chief executive, was asked whether Target would take a stand on a constitutional amendment being proposed in Minnesota to ban gay marriage.

His reply:

“Our position at this particular time is that we are going to be neutral on that particular issue, as we would be on other social issues that have polarizing points of view.”

You can almost feel him squirming, can’t you?

Steinhafel ducked the issue of gay-marriage even thought Target has a reputation as a gay-friendly employer. The company gets a top score of 100 percent and the distinction of “Best Places to Work for LGBT Equality” in the Human Rights Campaign’s Corporate Equality Index. This was a time when most companies ran away from the gay-marriage debate, figuring that no matter what they said, they’d annoy someone.

That has changed, dramatically, in just a couple of years, as I wrote a story posted yesterday at Guardian Sustainable Business:

Last year, when the supreme court pondered the fate of the Defense of Marriage Act (DOMA), which barred same-sex couples from receiving federal marriage benefits, a friend-of-the-court brief urging the repeal of Doma was signed by nearly 300 employers, including such big brands as Apple, CBS, Citigroup, eBay, Facebook, Google, Marriott, Mars, Nike, Starbucks and Walt Disney. Goldman Sachs flew an equality flag outside its downtown New York headquarters when the court overturned DOMA.

Now, as the battleground shifts backs to the states, businesses have allied themselves with supporters of gay marriage in Oregon and Indiana. In Oregon, a liberal-leaning state, you might expect a youth-oriented company like Nike to back marriage equality, and it has – with a $280,000 donation to the cause. The Portland Trail Blazers, meantime, became the first NBA team to back gay marriage.

More surprising is the role of two big companies in Indiana, a Republican stronghold. Cummins, the world’s largest manufacturer of diesel engines, and Eli Lilly, the big US maker of insulin products, each gave $100,000 to Freedom Indiana, a coalition of businesses, community groups and faith leaders trying to keep a constitutional amendment to ban gay marriage off the ballot this fall.

What’s more, as I go on to write, the executives at Cummins and Eli Lilly were very direct in their support of marriage equality. They said it was good for business and good for Indiana, and that the state does not need a divisive and emotional debate over gay marriage. You can read the rest of the story here.

I’ve followed the debate over LGBT equality in the corporate world since 2006 when I wrote a long story for Fortune headlined Queer Inc. In light of the fact that we are either stuck or moving backwards on some other important issues — climate change and economic mobility, to name just two — it’s heartening to see the progress being made by people who are working for gay, lesbian, bisexual and trans* equal rights.

By the way, Minnesotans eventually enacted legislation supporting marriage equality. It was signed into law by Gov. Mark Dayton, the great-grandson of George Dayton, the founder of Dayton’s – the department store that later became Target.

The future

9780300176483The bet between the biologist Paul Ehrlich and the economist Julian Simon, which was described as  “the scholarly wager of the decade” by the Chronicle of Higher Education, was settled without drama–or graciousness. As Paul Sabin writes in The Bet: Paul Ehrlich, Julian Simon and Our Gamble over Earth’s Future:

One day in October 1990, Julian Simon picked up his mail at his house in suburban Chevy Chase, Maryland. In a small envelope sent from Palo Alto, California, Simon found a sheet of metal prices along with a check from Paul Ehrlich for $576.07. There was no note.

It was a victory not just for Simon but for optimists everywhere, and so a fitting way to start the year of 2014. The two men–who did not like one another–had in 1980, at Simon’s urging, placed a $1,000 bet on the price of five metals ten years hence. Ehrlich, whose book The Population Bomb warning of a coming global catastrophe had made him a celebrity, as well as one of the most influential environmentalists of all time, believed that food, energy and commodities would all grow scarce, and thus more expensive over the decade. Simon, a free-market economist, had enormous faith in the power of markets, prices and innovation to solve problems. (Before the bet, Simon was best known as the inventor of the auction system used by airlines to pay passengers not to take overbooked flights.) Between 1980 and 1990, the prices of the five minerals–chromium, copper, nickel, tin and tungsten–had fallen by an average of almost 50 percent.

Simon was lucky as well as smart. A global recession in the early 1980s depressed the prices of metals, and they never recovered. As Sabin reports in his first-rate and very readable book, economists who ran simulations of the bet during every 10-year period between 1900 and 2008 found that Ehrlich would have won the bet 63 percent of the time. Yet the history of the past 45 years, since Ehrlich published The Population Bomb, weighs heavily in favor of Simon’s worldview. Market signals, human ingenuity and technological progress have solved problems that Ehrlich said would doom us all. [click to continue...]

A libertarian joins The Nature Conservancy

Lynn Scarlett

Lynn Scarlett

Can conservatives be brought back into the conservation movement? That’s the question facing Lynn Scarlett, the new director of public policy at The Nature Conservancy, who joined the environmental NGO after working as president of the Reason Foundation and in the interior department of the Bush II administration.

As I wrote today at the Guardian Sustainable Business, Scarlett is taking on a big and important job:

Fortunately, she’s not alone. Bob Inglis, a former Republican congressman from South Carolina, leads the Energy and Enterprise Initiative at George Mason University, which aims to “unleash the power of free enterprise to deliver the fuels of the future”. A group called the Conservation Leadership Council, which is led by Gale Norton and Ed Schafer, who were interior and agriculture secretaries during the George W Bush administration, is “encouraging conservative voices to join the conversation about the environment”.

Furthermore, prominent business leaders, including John Faraci, the CEO of International Paper, and Jim Connaughton, a vice-president at Constellation Energy and a former White House official, also belong to the council.

“There are solutions to environmental problems that are consistent with conservative principles,” Scarlett told me last week at The Nature Conservancy headquarters in Arlington, Virginia. The business-friendly NGO works across party lines and has branches in all 50 states (and in 35 countries).

The story goes on to say that no major environmental law has been enacted by Congress without bipartisan support. But, for reasons that have mostly but not entirely to do with the climate-change debate, Republicans and conservatives have broken away from the environmental movement since the 2008 presidential election.

Bringing Republicans and conservatives back into a climate movement will be tough. Some in the Tea Party wing are anti-science; they simply reject the notion that man-made greenhouse gas emissions are warming the earth. Many climate-change solutions are big and complicated, and similar in that sense to Obamacare, which has united Republicans like no other issue. And the big business lobbies that could help bring back conservatives are dominated by fossil fuel interests.

Still, there’s something fundamentally conservative about the idea that people and companies should clean up after themselves and be responsible for the messes they make–even if the mess, in this case, is CO2, the colorless and odorless gas that drives climate change.

You can read the rest of my story here.

Will solar power disrupt regulated utilities?

Applications_ResidentialOne of the business megatrends of my lifetime has been decentralization. Mainframe computers gave way to laptops and PCs. The AT&T monopoly exploded, and landlines led to a proliferation of cell phones. Airlines were deregulated, creating space for startups like Southwest  and JetBlue. Newspapers have been rattled by the Internet, where anyone and everyone has a voice.

Could distributed power–specifically, rooftop solar–nowbe poised to disrupt regulated utilities?

That’s the topic of my latest contribution to the YaleEnvironment360 website. Some utilities evidently feel threatened, so they are pushing back against subsidies for solar.

Here’s how the story begins:

Issues of electricity regulation typically play out in drab government hearing rooms. That has not been the case this summer in Arizona, where a noisy argument – featuring TV attack ads and dueling websites – has broken out between regulated utilities and the rooftop solar industry.

An Internet web video attacks the California startup companies that sell rooftop solar systems as the “new Solyndras,” which are spending “hard-earned tax dollars to subsidize their wealthy customers.” Meantime, solar companies accuse Arizona Public Service, the state’s biggest utility, of wanting to “extinguish the independent rooftop solar market in Arizona to protect its monopoly.”

Similar battles about how rooftop solar should be regulated have flared in California, Colorado, Idaho, and Louisana. And the outcome of these power struggles could have a major impact on the future of solar in the U.S.

The politics of this debate are unusual, as the story goes on to explain. Please read the rest here.

A couple of thoughts. First, it’s important to keep some perspective here. Solar is growing fast but off a very, very small base. It generates less than 1 percent of the electricity in the US. Some coverage of this issue–notably a long story in Business Week with the absurd headline, Why the U.S. Power Grid’s Days are Numbered — conveniently overlooks that context. Regulated utilities are not going away anytime soon and if the grid’s days are, in fact, numbered, it’s a really really big number.

Having said that, a regulatory system that tilts heavily towards solar–by allowing solar customers to sell their excess power back into the grid at inflated rates, for example–will create problems for the utilities, as well as inequities for other customers. While the regulatory debate has become politicized in places like Arizona–the Koch brothers make a cameo appearance at the end of my story–what’s needed is fair treatment for solar customers and the utilities.

What’s fair, you ask? That’s why we have regulators.