Climate Change

The eerie quiet of the insurance industry

January 5, 2012

If there’s one industry that ought to be concerned about the threat of global warming, it’s the insurance industry. OK, the ski industry, too, but I digress.

Dave Jones, California’s insurance commissioner, recently put it this way: “Climate change is an obvious physical threat to us all, but increasingly it also poses a serious financial threat to the insurance industry…” When extreme weather causes damage, insurers pay.

So you’d expect insurance companies to be among the most forceful voices in corporate America calling for the regulation greenhouse gas emissions.

Uh, no. They’ve been eerily quiet.

And, at the least, you’d expect them to be proudly steering some of their massive investments to clean energy or energy efficiency projects aimed at reducing emissions of greenhouse gases.

Wrong again.

“It’s surprising, in a sense, because they have so much to lose from climate change,” says Sharlene Leurig, senior manager of the insurance program at Ceres, a nonprofit coalition of investor and environmental groups. But, she notes, insurance is a conservative business. The industry is all about risk, but it doesn’t want to take the risk of speaking out on climate change. [click to continue…]

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Rick Perry, lyin’ and denyin’

September 1, 2011

How can Texas governor and presidential candidate Rick Perry talk so irresponsibly about global warming–and get away with it?

Have we really reached a point where, in order to appeal to the hard core of the Republican Party, candidates have to ignore the fact that the earth is getting warmer, and that human activities are responsible?

Let’s hope not. Because if true, that’s sad and worrisome. Without Republican backing, no serious effort to regulate greenhouse gas emissions can be enacted by the U.S. Congress.

To be sure, Democrats aren’t much better when it comes to straight political talk. Just ask Barack Obama, Harry Reid or Nancy Pelosi how they plan to close the federal deficit. But they are at least operating in a universe that resembles the one in which we live.

Not so Perry, who describes evolution as “a theory that is out there,” who rails against an “idiotic” federal regulation of tractors that does not exist, and who would have us believe that climate crisis is being drummed up by scientists who fudge their data to keep research grants rolling it. [click to continue…]

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Brighten clouds, cool the air, save the planet!

June 12, 2011

John Latham

In 1990, a British cloud physicist named John Latham wrote a letter, [PDF, download] to the journal Nature, in which he suggested that injecting tiny droplets of water into marine clouds to increase their reflectivity might be a way “to inhibit or neutralize global warming.

And then? “Nothing happened for 10 years except for a couple of angry letters saying it was a horrible thing to play God and why didn’t I go knock on the door of the president and tell him to stop burning fossil fuels,” Latham recalls.

But as greenhouse gas emissions kept growing,  Latham’s odd idea gained traction. It spawned a succession of peer-reviewed scientific papers, sparked debate in the scientific community and eventually led to the organization of a loosely-knit group of international scientists who now want to see if brightening marine clouds might actually be a feasible way to slow down or stop global warming.

“We’d like to move towards a limited area field experiment,” Latham says. [click to continue…]

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Dengue fever: coming to a neighborhood near you?

June 9, 2011

Meet the Aedes aegypti mosquito.

Actually, you don’t want to meet this little lady, who bites for blood that she needs to mature her eggs.

The Aedes aegypti spreads dengue fever, which affects about 100 million people a year. Most are in tropical and subtropical regions–South and Central America, southeast Asia and Africa. Dengue fever is rare in the U.S. except along the border with Mexico.

That’s changing–in part because of climate change. [click to continue…]

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The long-range forecast? Stormy weather

June 8, 2011

Commerce, Missouri: April 27, 2011

It’s sometimes said that no individual storm, flood, drought or wildfire can be specifically attributed to climate change.

That may be true but Kevin Trenberth, one of the world’s most prominent climate scientists, says it misses the point.

Sure, we’ve always had extreme weather events. But, he argues, they are more frequent and more intense because of climate impacts. And that’s important.

“The environment in which all storms form has been changed by human activity,” Trenberth says. Thus the storms have been affected, too.

Kevin Trenberth

Trenberth spoke to a group of reporters at National Center for Atmospheric Research (NCAR), where I’m on a fellowship this week. An MIT-trained meteorologist and a native of New Zealand, he was a lead author of the 1995, 2001 and 2007 IPCC reports and he has led NCAR’s Climate Analysis Section since the late 1980s. In other words, he knows his climate science.

Let’s be clear about the claim he is making: Trenberth is not saying that climate change caused this year’s severe Mississippi River flooding, Texas drought, Arizona wildfire, heavy rains in Memphis or tornadoes in Joplin or Tuscaloosa.

He is, however, saying that those extreme weather events — those storms, as well as last year’s floods in India and Pakistan, and a heat wave in Russia — were almost surely made more extreme because of climate change. [click to continue…]

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Can a coal-carrying railroad be green?

June 24, 2010

UNION_PACIFIC_Y2513_20070228Recently, FORTUNE sent me to Omaha to write this story about the Union Pacific, America’s biggest railroad. Impressive company in a fascinating industry without which our lives would be very different. Here’s how the story begins:

The strawberries on your cereal. Your laptop, cell phone, and TV. The coal that’s burned to power them. The car you drive. The roof over your head. We may work in a knowledge economy, but Madonna had it right: We live in a material world.

That’s why the Union Pacific railroad, No. 164 on the Fortune 500, has played a vital role in the U.S. economy since 1862. With $14.1 billion in revenue last year, the UP, which is based in Omaha, is America’s largest railroad. Close behind is its chief rival, the Burlington Northern Santa Fe (BNI) (2009 revenues: $14 billion), headquartered in Fort Worth, which was acquired this year by Warren Buffett’s Berkshire Hathaway (BRK.A) for $26.4 billion. The deal put a spotlight on the often troubled railroad business — in a good way. “It was a vote of confidence in the industry,” says Jim Young, the 53-year-old chairman and CEO of Union Pacific. “He sees the long-term value in the rail franchise — how unique it is in America.”

The story goes on to talk about how Young led a turnaround at the railroad, which suffered from lousy service, not once but twice–in the late 1990s after its merger with the Southern Pacific and again in 2004-2005 when the company cut back too deeply on equipment and staff and wasn’t prepared for a burst of economic growth. As Young told me: “We were the best marketing arm of our competitor.” The UP’s competitors include the Burlington Northern, which also operates in the west, and, interestingly, long-haul trucks.

In its battle for market share with trucks, the railroad industry is touting its environmental advantages. [click to continue…]

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Shame on you, Carly Fiorina.

June 4, 2010

I’ve long believed that we’d be better off if more successful business people entered politics. They tend to be pragmatic and action-oriented, they’re proven leaders, they understand economics and they’re not beholden to special interests. Look, for example, at the job Michael Bloomberg has done in New York City.

fiorinaAnd then there’s Carly Fiorina, the former CEO of Hewlett Packard, who is running for the U.S. Senate in California, hoping to unseat the incumbent Democrat, Barbara Boxer. She is giving business a bad name, notably with a new TV ad about climate which is unfair, stupid and destructive.

In the ad (below), a shrunken image of Boxer says:

One of the very important national security issues we face, frankly, is climate change.

To which Fiorina replies, dismissively:

Terrorism kills—and Barbara Boxer is worried about the weather….I’ll keep you safe.

My goodness. I’m no fan of Boxer (who comes across as perhaps the least appealing character in Eric Pooley’s excellent new book, The Climate War), but she is well within the mainstream in seeing climate change as a national security issue. Others who link climate to national security include so-called green hawks like James Woolsey, the former head of the CIA, and the military and intelligence analysts at the National Defense University, as the New York Time reported last year.

Last fall, the CIA opened a Center on Climate Change and National Security to study

the national security impact of phenomena such as desertification, rising sea levels, population shifts, and heightened competition for natural resources.

So Boxer’s right and Fiorina’s wrong: climate change is, in fact, a national security issue. Indeed, it’s a pretty good bet that climate change will kill more people that terrorists in the next decade or two.

Fiorina’s derisive comment that Boxer is “worried about the weather” is even more objectionable because Fiorina surely knows the difference between weather and climate. Not long ago, she talked up climate change as a serious issue. In 2008, as an advisor to  John McCain during his presidential campaign, Fiorina told Kate Sheppard of Mother Jones:

I think it’s important that when we think about taking on some of the great challenges now as opposed to leaving them to future generations, we have to talk not only about Social Security and medical care, but also about leaving our planet cleaner for the next generation than we found it.

I suspect that’s what she really thinks, but Fiorina is now running hard for the Republican nomination as a conservative and so she appears willing to say anything to get elected–even if it muddies the debate about climate.

Maybe the key difference between Mike Bloomberg and Carly Fiorina is their respective track records. He built a great company from scratch and made a fortune doing it. She worked her way into the job of CEO of Hewlett Packard, did a lousy job running the company (but a good job promoting herself) before she was sent off by the board with an undeserved $21 million severance package. She’s now using some of her wealth (which rightfully belongs to HP shareholders)  to finance ads like this one.

It really is shameful.

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COP15: Everything’s under control

December 13, 2009

bradpitt

He is the most innovative and ambitious housing developer in New Orleans, but c’mon folks, let’s be real.

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COP15: CEOs in Hamlet’s Castle

December 12, 2009

Helsingoer_Kronborg_CastleAs humans, we’re wired to focus on the now. I want a new gadget now. I want a slab of pie now. I’m busy now, so I don’t have time for politics. The consequences—consumer debt, a sagging waistline, a Congress beholden to special interests–all arrive later.

You can think about global warming as a now-and-later problem. Governments need to take unpopular actions now to deal with a problem that will do most of its damage later. Businesses need to look beyond the next quarter to the next quarter century.

This evening in Elsinore, Denmark, top executives from such companies as Coca-Cola, Duke Energy, Goldman Sachs and Google took the long view in a fitting venue: Kronborg Castle, a 15th century castle best known as the setting for Shakespeare’s Hamlet. Sitting in a magnificent castle that’s been preserved for six centuries makes you wonder what impact the goings-on on Copenhagen this week will have on the world in 60 or even 600 years.

In that context, it seems prudent to invest now to insure against a climate catastrophe, no matter how distant–even if the short-term result is  a slight drag on short-term economic growth

As Tracy Wolstencroft, global head of environmental markets for Goldman Sachs, put it: “The economy is a wholly owed subsidiary of the environment, not the other way around.” That is, if we ruin the environment, there’s no economy left. [click to continue…]

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COP15: Morality and money

December 11, 2009

cop15_logo_b_m

If you want to understand why it will be hard to get rich and poor countries to agree on how to deal with climate change, consider the reaction to a remark by Todd Stern, the U.S.’s chief negotiator, when he arrived here in Copenhagen the other day. Stern said:

We absolutely recognize our historic role in putting emissions in the atmosphere up there that are there now. But the sense of guilt or culpability or reparations–I just categorically reject that.

In response, Pablo Solon, Bolivia’s ambassador to the United Nations, said:

Admitting responsibility for the climate crisis without taking necessary actions to address it is like someone burning your house and then refusing to pay for it. Even if the fire was not started on purpose, the industrialized countries, through their inaction, have continued to add fuel to the fire. As a result they have used up two thirds of the atmospheric space, depriving us of the necessary space for our development and provoking a climate crisis of huge proportions.

In Bolivia we are facing a crisis we had no role in causing. Our glaciers dwindle, droughts become ever more common, and water supplies are drying up. Who should address this? To us it seems only right that the polluter should pay, and not the poor.”

We are not assigning guilt, merely responsibility. As they say in the US, if you break it, you buy it.

There you have it. Bolivia happened to speak up, but it could just as easily have been China, India,  Indonesia or Kenya.

The world’s poor countries want to get richer. Producing energy and economic growth in a cleaner way–by using wind or solar power, or nuclear energy, or electric cars–costs more than burning coal or oil. That expense, the poor countries say, should be borne by the U.S., the EU and Japan, which have emitted most of the greenhouse gases now in the atmosphere. Even now, the wealthy countries where 19% of the world’s people live account for 51% of global GHG emissions.

The principle is  simple–polluters should pay because they made the mess. Some people call this climate justice.

But where will the money come from to finance clean technology for China, India and the rest of the world? (Not to mention the money needed by some poor countries to adapt to climate change.) There’s talk in Europe of a global tax on financial transactions.  Island countries, including the Maldives, have called for a global tax on aviation.

Today, EU leaders said that they’d come up with $3 billion for a fund next year and President Obama has said he’ll support limited funding for adaptation and clean energy, but the Euros and dollars don’t add up to what the poor countries want or even what independent experts said will be needed. Besides that, there are big arguments brewing about who would manage the fund.

Much of the debate in Copenhagen will turn on these questions of morality and money.

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