Michael Brune

“We are starting to create the ecological U-turn that David Brower talked about, decades ago. On coal, it’s dramatic. We’ve seen a halt to the coal rush.”

“Primarily because of regulations (from)  the Obama administration, we can now project a future where our oil consumption will decline.”

“It’s not sufficient to address the problem, but it’s a positive trend.”

So says Michael Brune, executive director of the Sierra Club. [David Brower, who was made famous in John McPhee's Encounters with the Archdruid, was one of his predecessors.] Others fret that the environmental movement is on the defensive these days. Mike, an optimistic, sees progress.

Indeed, Mike argues that the effort by Republicans in the House to roll back a slew of environmental regulations as a sign that the enviros are winning.

“Republicans in Congress and their corporate benefactors are worried about the threat to the status quo in the energy industry,” he says. “That’s the reason this is happening. We’re making progress.”

Mike, who is 40, became the top executive at the Sierra Club early last year. Before that, he led the Rainforest Action Network, which I wrote about back in 2004 in FORTUNE. [See The Mosquito in the Tent] Earlier, he worked at Greenpeace, for a time as a door-to-door canvasser — a job that all but requires anyone who does it to see the glass as half full. Mike and I caught up the other day at the Society of Environmental Journalists conference in Miami.

The Sierra Club has nearly 600 staffers, a budget of nearly $100 million, about 625,000 paid members and another 1.4 million supporters. Stopping new coal plants and shutting down existing ones has become the club’s top priority. In a coup, Mayor Michael Bloomberg of New York gave the club a $50-million, four-year grant to support its anti-coal campaign. (See Mike Bloomberg takes on coal.)

Plans for more than 150 new coal plants have been dropped, and a dozen or so more are still being fought, Mike said. In large part, that’s because demand for electricity has slowed, federal pollution rules make upgrading coal plants more expensive and natural gas has become cheaper and more abundant. But environmental opposition to coal has played a key role, too.

The club’s Beyond Coal campaign now aims to lock in the shutdown of about one-third of the coal-generating capacity that’s left by the end of 2015. (Here are details.) Again, federal clean air act rules will force utilities to phase out dirtier coal plants, as will cheaper gas. The activists will work to create  political pressure to replace coal power with clean energy like wind and solar, not just natural gas.

Says Mike:

We’re going as fast as we can to replace coal with clean energy in every state across the country. It’s the top priority for Sierra Club, and the largest project that the Sierra Club has done in 20 years.

Wind and solar power costs are declining, making them good alternatives to coal, he argues. “Iowa’s 20 percent wind now,” he notes.

This campaign won’t solve the climate crisis, as Mike acknowledges, but it’s important for several reasons.

First, coal pollution literally makes people sick. Half of U.S. families live in places where, even today, air quality fails meet EPA standards. “They’re breathing air that’s unsafe to breathe,” Mike says. Coal’s also the major source of mercury, a neurotoxin which is especially dangerous to pregnant women and young children.

Second, the Beyond Coal campaign can generate environmental victories at the state and local level. Cap-and-trade is terribly complicated but “people can see that there’s this smokestack over there and it’s making us sick,” Mike says.

Third, the campaign could become one of the building blocks of a more powerful environmental movement. While most people want clean air and water, and most support action to curb climate change, most remain  passive. “We need people to engage,” Mike says. “We’re going toe to toe with some of the biggest polluters in the country.”

This is why, he says, the Occupy Wall Street protests are encouraging, as is next month’s protest at the White House to stop the Keystone XL pipeline:

Arguably, the biggest challenge in the environment movement is to show people that they’ll get a return on their investment of their time or their energy or their dollars or their passion—to not despair about the future of our country.

Sierra Club's Mike Brune, Rep. Jim Moran and Michael Bloomberg

In a gutsy move, New York Mayor Michael Bloomberg today announced that his Bloomberg Philanthropies has pledged $50 million to the Sierra Club to fight coal plants.

He didn’t do it quietly, either. Bloomberg chartered a boat to take about 100 Sierra Club activists, friends, TV cameras and reporters out onto the Potomac River for a press conference in front of an Alexandria, Va., coal plant that environmentalist have been try shut, so far without success. Fittingly, he came to D.C. on a day when the heat was sweltering and authorities declared a “Code Orange,” an alert meaning that the air is too dirty for kids to play outside.

“The burning of coal does terrible harm to mothers, children and families across the country,” Bloomberg declared, calling coal a “self-inflicted public health risk.”

Bloomberg and Mike Brune, the Sierra Club’s executive director, set an ambitious goal for the group’s “Beyond Coal” campaign: They want to shut down about one-third of the nation’s coal plants and replace them with clean energy as quickly as possible.

“If we succeed, and I believe we will,” Bloomberg said, “we will save millions of lives and we will help millions of children avoid asthma and its debilitating effects.”

For those who care about climate change, air pollution and public health, this is the best news out of Washington, D.C., in some time. It comes in stark contrast to the goings-on on Capitol Hill, where House Republicans are doing everything they can to tame the EPA.

Shutting down 30% of America’s coal-burning capacity with be hard, but the anti-coal campaigners have some winds at their back. Natural gas prices are low, and the EPA wants to require older coal plants to put on expensive, pollution control technology, over  industry objections. And about 10% of the aging fleet of coal plants is already scheduled to close.

Meanwhile, construction of new coal plants have all but come to halt, in part because of opposition from groups like the Sierra Club, which claims to have blocked more than 150 of them.

Brune, who came to Sierra Club after a successful run as leader of the hard-hitting Rainforest Action Network,  said the $50 million, spread over the next four years, will enable the club to expand its Beyond Coal campaign from 15 to 46 states and double the number of people working full-time against coal plants, from 100 to 200. The Sierra Club, which is Ameica’s oldest and largest grass-roots environmental group, has an annual budget of about $80 million and about 1.4 million members.

Mike (Brune) told me that the club has been talking with Bloomberg  since 2007 when his predecessor, Carl Pope, met the mayor during international climate talks in Bali. It’s significant that Bloomberg–who made his fortune in the media and is business-savvy–chose to make the donation to the Sierra Club, as opposed to more mainstream or business-friendly groups like the Environmental Defense Fund.

“He likes to take on big fights,” Mike said. “He took on tobacco. He took on guns.”

Bloomberg chats with Sierra Club volunteers

In his remarks aboard ship, Bloomberg said little about climate change and instead talked about public health, a longtime passion of his. (He’s the major donor to the Johns Hopkins Bloomberg School of Public Health.)

Banning smoking in New York City’s bars and restaurants was controversial, he recalled, but protecting people from second-hand smoke turned out to be popular.

Coal, he said, may appear to be a source of cheap electricity but “the real price tag is hidden” in medical costs. Coal pollution, he said, causes $100 billion in annual health costs.It’s also responsible for mining deaths and water pollution caused by mountaintop mining.

“This is about the air we breathe, the water we drink, our health, today,” Bloomberg said.

Still, while climate wasn’t on his mind today, his Bloomberg Philanthropies has become a leading backer of the C40 Cities Climate Leadership Group (C40), which attempts to drive action to curb global warming at the local level. In New York, meanwhile, he has promoted a range of environmental initiatives in New York City, ranging from bike lanes to solar power at city landfills to his failed effort to impose a congestion tax on private cars entering Manhattan.

This being Washington, Bloomberg’s appearance set off some chatter about a third-party presidential bid. There’s a whole lot to like about him besides his record on environmental and public-health issues: his business experience and success as an innovator and job-creator,  his determined effort to improve New York City’s schools and the fact that he has effectively managed a big bureaucracy. On the other hand, as a vertically-challenged New Yorker and a Jew who supports gay marriage, well, let’s just say that Bloomberg is not conventional presidential timber.

The Sierra Club probably has a better chance of shutting down a third of the nation’s coal plants than Bloomberg does of reaching the White House, and that task won’t be easy. Bruce Nilles, who led the Beyond Coal campaign before turning it over to West Virginia activist Mary Anne Hitt last year, said the campaign will use the courts to enforce existing environmental laws against older plants and  campaign in state legislatures for renewable energy mandates that typically require utilities to replace fossil fuel plants with wind or solar power.  He’s also counting on help from EPA, where administrator Lisa Jackson is pushing rules to regulate emissions of toxic chemicals like mercury from coal plants. “She is our favorite federal official,” Nilles told me.

In response, the American Coalition for Clean Electricity–yes, that’s what this utility and coal industry group is called, believe it or not– said on its website that “the ‘Beyond Coal’ campaign actually would move America beyond jobs. Mayor Bloomberg’s millions will be spent on a plan that would result in higher electricity rates for millions of Americans, fewer jobs, and less competitive American businesses.”

Well, yes, replacing dirty coal plants with wind or solar power will modestly increase electricity prices, while delivering public health and climate benefits. But as we should all know by now, there’s no such thing as a free lunch.

If you like the BP oil spill…

you’re going to love carbon capture and storage.

Carbon capture and storage, or CCS, is the technology that offers the best hope of generating electricity from coal in a way that doesn’t further heat up the planet. When people talk about “clean coal” – a phrase that deserves quotes because coal is never entirely clean — they’re often talking about CCS.

CCS technologies, which can be applied before or after the coal is burned, are designed to capture carbon dioxide, transport it to a secure location, typically deep under the ground, and then sequester it safely for a long, long time, with little or no risk that it will ever escape.

Get the connection? Just as the oil industry assures that they can safely drill for oil a mile under the ocean, the coal companies and utility industry are very confident that can bury CO2 deep under the ground, with little or no risk that it will ever escape.

Do you want to take them at their word?

I asked Mike Brune, the executive director of the Sierra Club and a leading anti-coal activist, about BP and CCS. He replied by email:

The BP deep water oil disaster is an example of how seeking out new and riskier ways of feeding our addiction to fossil fuels leads to new and more catastrophic problems….If there’s a lesson in this, it’s that relying on unproven and complicated methods to sustain our dependence on oil and coal has disastrous consequences.

You may be surprised to learn that CCS isn’t favored just by the coal guys or the utilities. Some environmental groups like the technology, too. David Hawkins, the estimable head of the climate program at the Natural Resources Defense Council, which strongly opposes conventional coal plants, says it’s essential that we figure out CCS. Here’s his very thoughtful argument on behalf of CCS, from NRDC’s Switchboard blog:

As a community, we have achieved great success in blocking new coal plants one by one but we need a comprehensive coal policy as well.  Showing CCS is an available tool helps us to convince policymakers that they should oppose construction of coal plants that do not capture their carbon.  Is such a policy as attractive to many in our community as a law that says no more coal plants, period? No.  But we need to ask ourselves — what are the realistic odds of getting Congress or any significant coal-using state to adopt a “no new coal, period” policy in the next handful of years?   I have fought the coal industry for 40 years and in my judgment the odds of a total ban on new coal plants are not large.

The Obama administration is also an enthusiastic supporter of CCS on a grand scale, in the form of a controversial, costly project known as Future Gen. Just a week ago, even as oil was spewing into the gulf, Obama’s DOE  announced that it would spend up to $612 million in recovery act money (to be matched by $368 million in private funding) to demonstrate large-scale CCS from industrial sources (not power plants, although the technology is similar).

One project will store CO2 in a “deep saline formation,” as part of a corn ethanol project. Two others will use the CO2 in “enhanced oil recovery” in the Gulf, believe it or not. Such well-connected companies as Archer Daniels Midland and GE are among the beneficiaries. From the DOE announcement:

·         Leucadia Energy, LLC (Lake Charles, LA)—Leucadia and Denbury Onshore LLC will capture and sequester 4.5 million tons of CO2 per year from a new methanol plant in Lake Charles, LA. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield, starting in April 2014. The project team includes Leucadia Energy, Denbury, General Electric, Haldor Topsoe, Black & Veatch, Turner Industries, and the University of Texas Bureau of Economic Geology.  (DOE share: $260 million)

·         Air Products & Chemicals, Inc. (Port Arthur, TX)—Air Products will partner with Denbury Onshore LLC to capture and sequester one million tons of CO2 per year from existing steam-methane reformers in Port Arthur, Texas, starting in November 2012. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield. The project team includes Air Products & Chemicals, Denbury Onshore LLC, the University of Texas Bureau of Economic Geology, and Valero Energy Corporation.  (DOE share: $253 million)

·         Archer Daniels Midland Corporation (Decatur, Ill.)—The project will capture and sequester one million tons of CO2 per year from an existing ethanol plant in Illinois, starting in August 2012. The CO2 will be sequestered in the Mt. Simon Sandstone, a well-characterized saline reservoir located about one mile from the plant. The project team includes Archer Daniels Midland, Schlumberger Carbon Services, and the Illinois State Geological Survey. (DOE share: $99 million)

Unfortunately, these subsidies don’t appear to be linked to actual tons of carbon sequestered. They support demonstration projects. Still to be determined are such issues as who “owns” the store CO2, who will be responsible, financially, if it escapes, etc.  To be fair, CO2 has been stored underground for years as part of enhanced oil recovery, but we’ve also been doing deepwater drilling for a long time.

Interestingly, the connection between the BP disaster and CCS was suggested to me,  not by an environmentalist, but by a very sophisticated investor in clean technology. This investor—who asked not to be identified, because he works closely with big companies like GE and with the Obama team—has placed bets on solar power, energy storage and efficiency, so he’s no fan of coal, but he’s also driven by a personal passion around the climate crisis.

Since I can’t quote the investor, I’ll give the last work to the Sierra Club’s Mike Brune:

Relying on carbon capture and storage is like a heroin addict finding a new vein to shoot. It’s not a solution, it’s simply a new way to perpetuate the problem. The Sierra Club has no objection to using private, corporate resources to fund CCS research to see if CCS can ever be done safely, cheaply, and without requiring massive amounts of energy. In the meantime, we shouldn’t be seeking out more expensive and dangerous ways to feed our dependence on oil or coal. Instead, we should be putting our innovation and resources to work in the service of clean energy that will create jobs and keep our coasts, wild places, and communities healthy and intact.

Photo links/credits: duck (Audubon Society of Florida)  coal plant (wikimedia)

PNC, a big regional bank (annual revenues: $16 billion) based in Pittsburgh, has become the bank that environmental activists love to hate because of its support for mountaintop removal mining.

The bank was identified as the worst of the worst in Grading the Banks: A Mountaintop Removal Scorecard, a new ranking compiled by the Rainforest Action Network and the Sierra Club.

According to the report, the bank has made loans to six companies engaged in mountaintop removal mining: Massey Energy, Patriot Coal, Alpha Natural Resources, International Coal Group, Arch Coal and Consol Energy.

PNC, by the way, was a recipient of TARP funds (since paid back) so these loans were, at least in a small way, your tax dollars at work.

I emailed PNC to ask for their comment and got a prompt reply from Fred Solomon, vice president, corporate communications:

PNC’s practice is not to comment on analyst or other research reports, and in general, our credit policies are proprietary information.

Interesting. We’ll see how long that no-comment approach lasts, if any of the enviro groups decide to bring pressure directly on PNC, a major consumer bank in the mid-Atlantic region. Transparency, evidently, is not for now part of the PNC culture.

I’m returning to the topic of banks and coal after just a couple of weeks (See J.P. Morgan Chase’s Coal Problem) because of a couple of significant new developments. The first is the RAN/Sierra club report card–a tactic that, in the argot of the corporate campaigns, is known as “rank ‘em and spank ‘em”. The second is a new policy from by JP Morgan Chase, released just before the bank’s annual meeting, which was held today.

In the report card, RAN and Sierra Club looked at nine financial institutions, and gave them letter grades from A to F, based on their MTR lending policies and publicly-known practices. Companies ranked, from top to bottom, were Credit Suisse (A-), Wells Fargo (B+), Bank of America (C), Morgan Stanley (C), Citi (C-), JP Morgan Chase (F), GE Capital (F), PNC (F) and UBS (F).

About PNC, the report said:

PNC does not appear to have a robust environmental policy and has not responded to our communication. A review of their website shows no evidence of a CSR or environmental staff team covering their commercial lending and investment banking business.

UBS, the big Swiss bank, also has no specific policy on MTR.

Amanda Starbuck of RAN told me: “They (PNC and UBS) both seem to be picking up business from coal clients that others won’t touch.” She said that, to the best of her knowledge, neither RAN nor Sierra Club has plans to target PNC, but she noted that the Earth Quaker Action Team (cool name!),  a new group of “Friends and friends of Friends” based in the Delaware Valley around Philadelphia, has begun a campaign of nonviolent direct action aimed at PNC. The group staged a silent vigil last month outside a PNC brank in Philly to mourn the deaths of 29 miners in the Upper Big Branch mine owned by Massey Energy. (Massey, by the way, held its annual meeting today, too, attracting hundreds of protestors and shareholder opposition to the re-election of three directors.)

Earth Quaker Action Team says this about PNC:

PNC is the fifth-largest bank in the U.S. in terms of deposits, and makes money from its involvement with mountain-top removal coal companies.  PNC also portrays itself as a “green bank” because of its building practices.

This is one of those places where climate change meets economic justice, where the profitable exploitation of people and nature hurts locally and globally, by pushing more carbon into the atmosphere.  PNC Bank can choose a different kind of escalation.  Instead of supporting the war against people and nature represented by mountain-top removal, it can escalate its own commitment to green practices, going beyond vegetated roofs on its local branches to cleansing itself from financial dealings with coal companies.

Meanwhile, JP Morgan Chase published its first policy on MTR in its 2009 corporate responsibility report (available for download) released this week. Several paragraphs are devoted to MTR, saying, among other things that the bank does an “enhanced review of all proposed banking transactions for companies engaged in MTR,” that the bank supports the Obama administration’s review of MTR rules and that

As the public record reflects, in 2009, JPMorgan Chase did no financing for any company with significant MTR operations.

RAN’s Amanda Starbuck calls this a step forward, although the overall policy (like those of most banks, as I reported here) is “quite fuzzy, quite woolly.” She’d probably raise the bank’s grade from F to D, she told me.

Interestingly, without saying so directly, JP Morgan Chase appears to have backed away from financing Massey Energy. It was the lead manager, with UBS, when Massey borrowed money in 2008, but did not participate (although UBS did) when Massey returned to the market in March.

“It is very clear they have dropped Massey as a client,” Starbuck says.

Is there a business case for banks to avoid lending to coal companies? While public opposition to both MTR and new coal plants appears to be growing, Americans will be burning coal to make electricity for a long time. Coal-fired power plants currently account for about 50% of our electricity. To put this in personal terms, roughly half of the 1,000 words in this blogpost are coal-powered, maybe more depending on what my local utility, PEPCO, is doing today.

But if the reputational costs of burning coal and financing MTR or new coal plants continue to grow, that will help persuade banks and utilities to invest in cleaner forms of energy–natural gas, nuclear power, wind and solar.

That’s what RAN and the Sierra Club hope to accomplish, and they appear to be gaining ground.

Mountain photo courtesy of flickr.com/photos/sierraclub/2825430279/

Billboard photo courtesy of flickr.com/photos/quinnanya/3392446245/

Activists target Chase

Do we really want to keep blasting the tops off mountains, destroying forests and dumping the rubble into waterways, in order to extract and burn coal that is messing up the climate?

For now, the answer to that question is yes, despite vigorous efforts by environmentalists and activists in Appalachia to stop mountaintop removal mining. Some are behind a bill in Congress sponsored by Lamar Alexander, a Republican, to end the practice. Others are calling on big banks–in particular JP Morgan Chase–to stop financing mountaintop mining.

The pressure on JP Morgan Chase is coming from activist groups including the Sierra Club, the Rainforest Action Network and an Appalachian group called Climate Ground Zero which calls itself an “ongoing campaign of nonviolent civil disobedience in southern West Virginia to address mountaintop removal coal mining.” All are stepping up their efforts in advance of JP Morgan Chase’s annual shareholder meeting on May 18. They plan to release a list of the worst funders of MTR mining before then, and chances are Chase will be at or near the top.

What’s wrong with mountaintop removal mining? Lots. Here’s an overview from a coalition of anti-mining groups. This article from Science magazine (payment required) takes a more dispassionate view and concludes that it is difficult, if not impossible, to mitigate the damage caused by clearing forests, exploding the tops of mountains and choking streams with rocks and dirt. The scientists say:

current attempts to regulate MTM/VF [“mountaintop removal mining with valley fills”] practices are inadequate. Mining permits are being issued despite the preponderance of scientific evidence that impacts are pervasive and irreversible and that mitigation cannot compensate for losses.

This is not an activist group speaking. This is a publication of the American Association for the Advancement of Science.

JP Morgan Chase says all the right things when it comes to the environment. For example:

Our goal is to make a positive contribution to sustainability by integrating environmental principles into our business model.

And

JPMorgan Chase will assume a leadership role in the financial services industry by helping to reduce greenhouse gas emissions in our value chain

But the record does not support this overblown rhetoric. According to the many activists (see this and this and this), who cite data from Bloomberg, JP Morgan Chase has  been a major financier of MTR mining, as recently in 2008 and 2009. In 2008, JP Morgan acted as lead manager (with UBS) on a $690 million bond offering and $234 million stock offering by the now-notorious Massey Energy, the largest MTR producer of coal and a company with a terrible environmental and safety record. Massey, of course, operates the Upper Big Branch deep mine in West Virginia where 29 miners died last month in the worst U.S. mine disaster in decades.

In 2009, JP Morgan helped Arch Coal, the second-biggest coal company in the U.S., raise $600 million, according to JP Morgan’s War on Nature, an article in Mother Jones by Andy Kroll. Arch Coal, the article says, “mined 4.7 million tons of coal using MTR” in 2009 alone and has for a decade been trying to develop an MTR operation called Spruce that, as originally planned, would have been the largest ever. (Currently, less than 10% of Arch’s coal production comes from Appalachia.) Merrill Lynch, Citigroup and Morgan Stanley also participated in the deal with Arch, according to an industry source who asked not to be identified.

I spoke last week to Mike Roselle, who helped start the Rainforest Action Network and now leads Climate Ground Zero, which is based in West Virginia coal country. The group has organized more than a dozen nonviolent protests at coal mines, at the U.S. EPA and at the offices of West Virginia environmental regulators. (Or should I say “regulators”?) Mike and his allies have been arrested, they have served jail time and they have been condemned  as “domestic terrorists” by Massey. Ken Ward, the outstanding environmental reporter at the Charleston Gazette, has written extensively about the protests at his Coal Tattoo blog.

Climate Ground Zero has just launched an online campaign called Mountains Rule, asking supporters to close their Chase bank account, take video of the experience, promote the campaign on social media and spread the word by wearing this campaign badge.

“Ultimately, we have to go after their customer base–the people who have accounts in their bank and the people who use Chase credit cards,” Roselle told me. “This is something that our allies can do in their neighborhoods, without having to come down to West Virginia.”

Chase, he said, should be worried about potential damage to its brand. “One thing that’s important to them is their potential to grow and increase market share,” he said.

Because there’s no single metric against which to measure the banks, it’s hard to determine which bears most responsibility for mountaintop removal mining.

The Mother Jones story says:

Wells Fargo has cut ties with coal giant Massey Energy. And a Credit Suisse official says the bank has a “global mining policy” that ensures “we explicitly do not finance the extraction of coal in a mountaintop removal setting.” [Note: I couldn't find any reference to this on the Credit Suisse website.]

In 2008, after being targeted by activists, Bank of America published a coal policy (PDF) that says the bank will phase out financing for companies whose “predominant method of extracting coal is through mountain top removal” mining. This is less sweeping than it sounds because of the word “predominant.” Most coal companies get most of their coal from underground mining, so under the policy, BofA could theoretically finance a lot of MTR.

Just last week, Citi reported on its mountaintop removal policy, which was released last August. The bank said that it screened three MTR transactions in 2009 for their environmental risks, with two being approved and one turned down. Citing Bloomberg records, RAN’s Amanda Starbuck says Citi financed Teco Energy and Consol Energy. The bank won’t say which deals it approved or turned down, citing client confidentiality.

I asked JP Morgan Chase’s James Fuschetti, who is managing director of the office of environmental affairs, to respond on the record to the activists’ campaign. He declined but in a letter to a Chase client obtained by RAN, he wrote:

JPMorgan Chase has made a substantial effort to better inform itself about the environmental and social impacts of mountaintop removal coal mining in Appalachia. As a result of our own analysis and benefiting from information and perspectives provided by others, our senior management’s awareness of these impacts has increased significantly. Consequently, early in 2009 we took concrete action to ensure appropriate assessment and review procedures are in place to evaluate these impacts when considering working with companies engaged in MTR. We also began including our Reputation Risk Committee when examining transactions for companies engaged in MTR.

In that same letter, Fuschetti wrote that JP Morgan “has not arranged or underwritten a capital markets transaction for Massey Energy since August 2008.” Interestingly, Massey raised another $425 million this past March, aided by UBS and other banks but not JP Morgan Chase. What we don’t know is whether JP Morgan Chase turned down the opportunity to be part of that deal.

Fuschetti also said that finding a solution to the MTR controversy is “the proper role of representative government, not NGOs with their own agendas or banks with their business interests.” This last point is questionable. People who feel a moral obligation to agitate for change–think of the civil rights activists of the 1950s–can’t be expected to write polite letters to Congress and hope for the best.

JP Morgan Chase may have more to say at its annual meeting. One sign that it is listening to critics: Boston Common Asset Management, an institutional investor and activist shareholder, withdrew a shareholder resolution about the company’s coal lending practices, after engaging in discussions with the company.

Down in coal country, Mike Roselle is confident that JP Morgan Chase will stop financing MTR mining.

“I know we’ll win this campaign,” he says. “It’s just a question of how long it’s going to take and how many mountains get blown up before we do.”

[Disclosures: I was paid to speak at a JP Morgan Chase event in 2005 and more recently consulted with Citi as the bank developed an idea that it is calling responsible finance.]

The Sierra Club and American Electric Power, the nation’s largest coal-burning utility, don’t agree on much, but there is this:

Money does grow on trees.

Along with other big environmental groups and such businesses as Duke Energy and El Paso Corp., they are part of a coalition that wants to use markets to protect the world’s forests and curb climate change.

Jeff Horowitz

The coalition—called Avoided Deforestation Partners, a name that will never win a branding contest—is the brainchild of Jeff Horowitz, a 58-year-old architect and newcomer to the environmental movement who has quietly become an influential player as climate change legislation inches its way through a divided Congress.

Protecting forests “is our single most important strategy, with respect to solving the climate crisis,” Horowitz says. “If we don’t tackle forestry immediately, we can’t buy enough time to get at the technological advances we need and scale them.”

I met Jeff in December at the UN climate talks in Copenhagen, and visited him last week at his office in a lovely, hilly neighborhood of Berkeley. A mechanism to protect forests by steering millions of dollars from the developed world to poor countries, known as REDD (Reducing Emissions from Deforestation and Forest Degradation), was endorsed by governments in Copenhagen, so Horowitz felt good about the climate talks. “As far as we’re concerned, Copenhagen was a tremendous victory,” he told me.

Now he wants to make sure that forestry offsets are part of a U.S. climate bill. That will enable regulated polluters in the U.S. to offset their carbon emissions by paying to protect forests elsewhere. Protecting forests is a cheaper and quicker way to curb emissions than by switching from coal or natural gas to low-carbon energy sources like nuclear, wind or solar power.

While offsets are controversial, no one doubts is that protecting forests matters: Scientists estimate that nearly 20% of the world’s greenhouse gas emissions come from deforestation, as trees are slashed and burned to make way for agriculture. Standing forests also act as carbon sinks by absorbing CO2. Environmentalists and governments from Norway to Brazil have for decades tried to stop deforestation, but they  have made limited headway.

Neither afforestation (planting trees) nor avoided deforestation (stopping trees from getting cut down) were part of the Kyoto climate agreement, largely because of opposition from enviros. They argued that forest protection could not be reliably monitored and verified and that offsets would allow polluters to avoid mending their ways.

Critics of forestry offsets worry about arcane concepts known as “leakage” (paying to save one forest only to have another one nearby cut down) and “additionality” (how do you know the forests would not have been saved anyway?). They’re right that if mismanaged, offsets could do more harm than good.

Brent Blackwelder, president of Friends of the Earth, which released a 28-page report attacking offsets last fall, said: “Offsetting does not lead to promised additional emissions cuts in developing countries while it delays essential structural change in the U.S. economy.”

But the politics of offsets have shifted in the last year or two, in part because of Horowitz’s persistent behind the scenes efforts. Early on, he enlisted the support of Nobel Peace prize winner Wangari Matthai, the founder of the Green Belt Movement, which planted trees across Africa. Her fellow Nobel laureates Al Gore and Oscar Arias came around as well. A key turning point, in retrospect, came when Carter Roberts, the president and CEO of  the World Wildlife Fund U.S., spoke in favor of market mechanisms at an ADP event. The WWF had previously opposed offsets.

Last year, Horowitz and ADP — other members include Conservation International, Environmental Defense, NRDC, The Nature Conservancy among green groups, and PG&E, Marriott, Starbucks and Walt Disney among companies–developed “consensus principles” on forest offsets. They call for both public and private money to be steered to forestry protection.

Horowitz argues that the best way to overcome objections to offsets is to regulate forestry projects to insure that they are real, verifiable and long-lasting. Besides lobbying in Washington, ADP is developing a protocol to help poor communities seek financing to protect and monitor forests. “This allows indigenous groups to team up with NGOs, without hiring expensive lawyers they can’t afford,” he says.

Meanwhile, he explains, there are three categories of companies that can profit from forestry offsets.

If climate legislation passes, regulated utilities and their customers will save money by using offsets rather than shutting down coal or natural gas plants.

Branded consumer companies like Marriott, Disney and Dell, whose emissions are not regulated, use offsets to establish their green cred and burnish their reputations. (See my blogpost about Marriott and this press release from Disney, Conservation International, The Nature Conservancy and The Conservation Fund.)

Finally, a entire industry of project developers, carbon traders, verifiers and regulators has emerged to create and manage offsets. “There is profit all along that food chain,” Horowitz says, “and in my view that’s good.”

A native New Yorker, Horowitz designed large-scale projects around the world as an architect and became concerned about deforestation. He previously founded a nonprofit called Urbanists International, which provides design  and land planning services to developing countries, and was vice chair of Equator International, a forest carbon firm. He and his wife, Lynn,  own Rio Lago Ranch and Vineyard, which produces cabernet sauvignon grapes for the Clos du Bois Winery of Sonoma.

But his energies now are focused on forestry, with the goal of making it more profitable to preserve forests than it is to cut them down.

Thereby proving that your parents were wrong.

–

Disclosure: I was paid in Copenhagen by the Coalition for Rainforest Nations to host a celebration of REDD.

So the verdict is in on the UN climate negotiations that just wrapped in Copenhagen and it’s all but unanimous:

Carl Pope, Sierra Club: The world’s nations have concluded a historic–if incomplete–agreement to begin tackling global warming.  Tonight’s announcement is but a first step and much work remains to be done.

Frances Beinecke, Natural Resources Defense Council: We have taken a vital first step toward curbing climate change for the sake of our planet, our country and our children…. There’s still more work to be done.

Fred Krupp, Environmental Defense Fund: A lot of hard work remains, but a lot of hard work is finished. The new positive steps taken here…president the U.S Senate and President Obama with a n historic opportunity.

Jonathan Lash, World Resources Institute: “Much more is needed, but today marks a foundation for a global effort to fight climate change.

Elliot Diringer, Pew Center for Global Climate Change: The Copenhagen Accord is an important step forward in the international climate effort…it lays the foundation for a system to hold countries accountable. …Much remains to be negotiated.

Hmm..  I thought the 1992 Earth Summit in Rio or the 1997 Kyoto Protocol or the 2007 Bali Roadmap were first steps. Shouldn’t we be taking the second, third or fourth steps by now? Or, if you prefer the foundation metaphor, shouldn’t we hurry up and build the house, before sea levels rise and storms intensify?

This isn’t to suggest that the 15,000 or 20,000 people who descended on Copenhagen during the last two weeks wasted their time. What is being called the Copenhagen Accord sets a target of limiting global warming to a maximum 2 degrees Celsius over pre-industrial times. It promises billions of dollars of aid for poor countries. It points the way towards a resolution of the fundamental conflict between U.S. and China over their so-called “common but differentiated” responsibilities to deal with global warming. That’s important–when it comes to climate and the global economy, the G-2 of the U.S. and China tower over the rest of the world. The leaders of Europe, Japan and other countries at the summit were largely left to rubber-stamp the deal, as The Washington Post reported.

The trouble is, none of this is good enough. Nations can now set own emission reduction targets. (Earlier versions of a political agreement being discussed in Copenhagen had called for specific reductions by 2020 and 2050.) It does not set a deadline for signing and binding treaty. (Until fairly recently, that deadline was supposed to be now.) Sure, aid is promised to poor countries, but aside from some token amounts, no one can be sure where the money will come from.

This isn’t a strong deal. It isn’t  a weak deal. It’s not a deal at all.

It’s a disaster waiting to happen.

Having said that, I understand the thinking behind the first-step-much-work-needs-to-be-done analysis coming from the inside the Beltway environmental groups. With the climate debate now shifting from Copenhagen to the U.S. Senate, they need to tread carefully. They can’t be overly critical of President Obama or undecided senators; they need to suggest that something real was accomplished in Copenhagen, to help persuade legislators that the U.S. can enact strong climate regulation without giving a competitive edge to China or India. Carl Pope of the Sierra Club made this argument explicitly, saying: “Now that the rest of the world–including countries like China and India–has made clear that it is willing to take action, the Senate must pass domestic legislation…”

But, again, the rest of the world has not committed to anything.

For a reality check on where we stand, let me refer you to the Climate Scoreboard put together by scientists at MIT, the Sustainability Institute and Ventana Partners, with the support of Nike, Citigroup, Fidelity Investments and others, which uses computer simulations to  model the long-term climate impacts of decisions being undertaken today. Please see the Climate Interactive blog for more detail.

Put simply, we’re not going where we need to go.

A big part of the problem here, as Bill McKibben has written eloquently, is that the world’s governments treat climate change as just another political problem–and it’s not.

Think about the health-care agreement reached this weekend. It’s the product of a series of compromises, some of them quite ugly, but it has the support of President Obama and Democrats in Congress because they believe it’s the best they can do, for now. Maybe they’ll come back to “reform” health care again in a few years. It’s a step, even a big step, in the right direction.

This is how politics usually works. It’s incremental. Even on great moral issues like civil rights, governments move piece by piece–first the military was desegregated, then came schools, then  voting rights, finally housing and employment bias were barred, if I remember my history right. This approach gives people time to get used to change. It’s the mindset behind first-step-much-work-needs-to-be-done.

But incrementalism isn’t going to do the job when it comes to climate change. Every day that goes by when we emit more global warming pollutants into the atmosphere than nature can take out, the job gets harder to do. So a small but inadequate step, even one in the right direction, can actually leave us worse off than before.

One metaphor that helped me understand this is a bathtub: The faucet (industry, transportation, deforestation) is pouring more water in to the tub than the drain (nature’s ability to absorb CO2) can take away, and there’s no way to make the drain any bigger. Just turning down the faucet a little doesn’t help; the water level in the tub can keep rising, albeit not as fast as before. The longer the faucet pours in more water than the drain can take away, the more radically we have to turn it down to stop the tub from overflowing.

McKibben explains it this way:

Physics has set an immutable bottom line on life as we know it on this planet. For two years now, we’ve been aware of just what that bottom line is: the NASA team headed by James Hansen gave it to us first. Any value for carbon dioxide (CO2) in the atmosphere greater than 350 parts per million is not compatible “with the planet on which civilization developed and to which life on earth is adapted.”  That bottom line won’t change: above 350 and, sooner or later, the ice caps melt, sea levels rise, hydrological cycles are thrown off kilter, and so on.

And here’s the thing: physics doesn’t just impose a bottom line, it imposes a time limit. This is like no other challenge we face because every year we don’t deal with it, it gets much, much worse, and then, at a certain point, it becomes insoluble—because, for instance, thawing permafrost in the Arctic releases so much methane into the atmosphere that we’re never able to get back into the safe zone. Even if, at that point, the U.S. Congress and the Chinese Communist Party’s Central Committee were to ban all cars and power plants, it would be too late.

Oh, and the current level of CO2 in the atmosphere is already at 390 parts per million, even as the amount of methane in the atmosphere has been spiking in the last two years. In other words, we’re over the edge already.  We’re no longer capable of “preventing” global warming, only (maybe) preventing it on such a large scale that it takes down all our civilizations.

There’s the argument for Flopenhagen.

As for Hopenhagen, well, I saw a lot of things to get excited about during my week in Copenhagen.

Denmark itself, for one: The nation gets 20% of its energy from wind, it’s rolling out a national system for charging all-electric cars and roughly 55% of the people of Copenhagen ride a bike every day, most to go to work. You won’t be surprised to hear that they are thinner as a group than those of us in the U.S.

Speaking of wind, Tulsi Tanti, the founder of Suzlon Energy, told me that China is the world’s biggest and fastest growing market for win energy. His company is manufacturing turbines in China, and he says the government there is committed in a serious way to clean energy — even if it doesn’t want to be held to absolute limits on emissions.

Finally, the kids. There were thousands of them in Copenhagen. They are committed to organizing to stop climate change, they are smart, they are idealistic, they are not pragmatic and they are not fans of the first-step-much-work-needs-to-done approach. For more, check out 350.org or Avaaz or the Youth Climate Movement.

You know how people say we need to save the earth for our kids? I’m starting to think that it’s the other way round, that they are going to have to save it for us.

As the battle over climate change legislation heats up, several Big Green groups–the Environmental Defense Fund, the Natural Resources Defense Council and the Sierra Club–are rolling out TV and Internet ads designed to persuade voters that regulating greenhouse gas emissions will create green jobs. David Yarnold, the president of EDF’s Action Fund, sums up the message in an email: “Carbon Caps = Hard Hats.” Clever. Here’s an ad from EDF’s campaign, launched in partnership with the United Steelworkers union and the Blue Green alliance, a group of enviromental groups and unions.
Think of this ad, and the one below, as the “Harry and Louise” ads of the campaign to pass global warming legislation. You remember Harry and Louise, right? They were the couple who turned a devilishly complicated issue, health care reform, into a soundbite (“If we let the government choose, we lose”) and helped kill the 1994 Clinton health plan. These ads take what may be an even more devilishly complicated issue, climate change regulation, and use images of brawny construction workers to turn it into an even shorter soundbite: “Green jobs.” Take a look at this spot from The Blue Green Alliance:

Maybe I missed it, but did you hear an environmental message in either of those ads?

Of course, there’s research to support the claims about green jobs. In the interests of full disclosure, I need to say here that I’ve been doing some freelance work for EDF and NRDC—organizations I admire a great deal. But these claims about green jobs deserve greater scrutiny.

Last June, for example, the Blue Green Alliance, Sierra Club, NRDC and the steelworkers issued a green jobs report from the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst. It said:

…millions of U.S. workers—across a wide range of familiar occupations, states, and income and skill levels—will benefit from the project of defeating global warming and transforming the United States into a green economy.

A second report from PERI, issued last September under the auspices of the Center for American Progress, got more granular. In my home state of Maryland, for example, the authors project that a $100 billion green economic recovery program would create 36,739 jobs. They would be created in such industries as building retrofitting, mass transit and freight rail, smart grid, wind power, solar power and advanced biofuels.

It sounds great, doesn’t it?

Not according to the four lawyers and economists who produced “7 Myths About Green Jobs,” a 97-page report published by the University of Illinois College of Law.  They argue that “the green jobs literature is rife with internal contradictions, vague terminology, dubious science, and ignorance of basic economic principles.” Studies by conservative think tanks go further, claiming that climate legislation will destroy millions of jobs. A 2008 Heritage Foundation study claimed that passage of last year’s Lieberman-Warner bill would create “extraordinary perils for the American economy” and cause annual job losses of between 500,000 and 1,000,000 after a few years of job gains. (This report was pretty thoroughly discredited by NRDC.) The best thing I’ve read about this debate (and one of the most balanced) is this fine Slate article by Eric Pooley, my former editor at FORTUNE, who finds that there’s an emerging economic consensus that the costs of dealing with climate change are significant but manageable–and that given the risks, those costs are likely worth paying.

My point here is not that economists disagree. My point is that the climate change debate shouldn’t be about green jobs. It’s intellectually dishonest to pretend that we can forecast, with any degree of accuracy, the impact of a complicated government policy on a dynamic global economy decades into the future. Both sides know that their projections are based on a host of assumptions which may or may not come true. What if we decide as a nation to turn to nuclear energy as a source of low-carbon power? That probably won’t create many long-term jobs. What if there’s a breakthrough in the solar PV business in China? That may not bring green jobs here. Are farmers who grow corn for ethanol doing green jobs? That hasn’t turned out so well.

Let’s get real: We can’t predict oil prices 12 months out. Last spring, virtually no one anticipated the global financial crisis of last fall. And we are projecting the number of green jobs that will be created or lost on a state-by-state basis by a law that won’t take effect until 2012? Who are we kidding?

I called Russ Roberts, an economist at George Mason University who hosts the fine EconTalk podcast, for some guidance on how to think about green jobs and the economics of climate regulation.  “Creating green jobs is easy,” he told me. “We could employ millions of people picking up litter, and we could make them very good-paying jobs if we want. But of course that would make us poorer as a nation. There’s a cost to providing those jobs that would have to be borne by other people in the economy.”

It’s not just the cost of higher taxes that needs to be factored into the equation, he noted. To the degree that the government makes policy that favors, say, vast construction of wind turbines throughout the upper Midwest, the people doing those jobs will be drawn from somewhere else, maybe even from more productive work. If policy leads to the hiring of  thousands of contractors to do energy efficiency, the cost of building a new home or renovating your basement may go up because many of the good construction workers are busy.

“As voters and citizens and readers, what we want to think about is the big picture—are we moving in the right direction when it comes to environmental policy?” Roberts says. Put another way, are we spending enough money today to head off the threat of global warming in the future? Because if anyone tells you that we can deal with climate change at no cost, they probably shouldn’t be trusted.

Maybe that’s what bothers me about the green jobs ads. They’re like political campaign ads. They promise something for nothing. They treat the voters like children. They’re emotional and not educational. And they’re not helping to build a movement around climate change.

Other than that, they’re fine.

And I do hope they work.

The debate over clean coal has come to Washington in a big way. Specifically, you can see it in Metro Center, D.C.’s busiest subway stop, where millions of people, including those headed to town for President-elect Obama’s inauguration, will see walls of posters and banners saying that “clean coal” is a myth.

The ad campaign comes courtesy of a coalition called This is Reality. Behind it are enviros including the Alliance for Climate Protection (Al Gore’s group), the Sierra Club, League of Conservation Voters, Natural Resources Defense Council (disclosure: they’re a client for whom I do some writing) and the National Wildlife Federation. The “reality” coalition says

In reality, there is no such thing as “clean” coal in America today. Coal cannot be called ‘clean’ until its CO2 emissions are captured and stored safely.

Let’s be clear: there are no US homes, factories, shopping centers or churches powered by coal plants that capture and store their global warming pollution.

Today, coal power plants emit carbon dioxide (CO2), the pollutant causing the climate crisis. A third of the America’s carbon pollution now comes from about 600 coal-fired power plants. And of the more than 70 proposed new coal power plants, barely a handful have plans to capture and store their CO2 emissions. If these dirty plants are allowed to be built, this will mean an additional 200 million tons of global warming pollution will be emitted in America each year. Until coal power plants no longer release CO2 to the atmosphere, coal will remain a major contributor to the climate crisis.

This is, in part, a response to a costly campaign created by a coal industry group called the American Coalition for Clean Coal Electricity (ACCCE), a group which says:

As you might have guess, we are pro-coal and proud of it. Not only does coal keep America’s lights on, it keeps everything else that needs electricity running.

ACCCE believes that the robust utilization of coal – America’s most abundant energy resource – is essential to providing affordable, reliable electricity for millions of U.S. consumers and a growing domestic economy. Further, ACCCE is committed to continued and enhanced U.S. leadership in developing and deploying new, advanced clean coal technologies that protect and improve the environment.

The truth is, both the anti-coal and pro-coal forces have a point.

There is, today, no such thing as clean coal—not even close. And there is, today, no way to power the slumping U.S. economy without coal. If you hate coal, then turn off your TV, iPod, refrigerator, air conditioning, etc, for 12 out of every 24 hours – because half of America’s electricity comes from coal.

The reason that the debate is getting so heated is that coal, and clean coal, will be at the center of the debate over greenhouse gas regulation in Congress this year. Environmental groups, scientists and some big companies will argue for a rapid reduction in greenhouse gas pollution—saying that a tight cap will be the only way to stimulate innovation, including the technology breakthroughs needed to capture and store the C02 created when coal is burned. Coal-industry types and utilities will argue that the regulation can’t get too far ahead of clean coal technology or it will wreck the economy by driving up electricity costs.

This morning, the U.S. Climate Action Partnership, a coalition of environmental groups and big companies, will unveil it latest climate change proposals. Here’s a preview from the WSJ’s Environmental Capital Blog.

Six weeks from now, coal will again make headlines. As Bill McKibben writes in Grist, environmentalists are planning a day of protest and civil disobedience at the coal-fired plant that powers the Congress. He writes:

There are moments in a nation’s — and a planet’s — history when it may be necessary for some to break the law in order to bear witness to an evil, bring it to wider attention, and push for its correction.

So those posters in the metro are just the opening shots in the coal wars.

Only a mindless anti-business zealot (and unfortunately there are still too many of those) would argue that environmental groups should not cooperate with big business when they have shared interests. Even activist groups like Rainforest Action Network and Greenpeace work closely with big companies like Citigroup and Coca-Cola, to help them make their operations more efficient or their strategy more environmentally friendly.

But there’s lots of debate about whether NGOs should accept money from their corporate partners. Does it compromise their independence? Threaten their credibility? Or enable them to bring in more money, and therefore have a bigger impact? That’s the topic of today’s Sustainability column.

By coincidence, I spent the day at the Net Impact conference in Philadelphia where corporate-NGO partnerships were one topic on the agenda. (Net Impact is an organization of business students and young business people who are committed to using business to make the world a better place. Some 2,400 people attended the very impressive event at Wharton.) I moderated a conversation about a corporate-NGO alliance with John Brock, CEO of Coca-Cola Enterprises and Carter Roberts, CEO of the World Wildlife Fund, and then listened to another where Ken Mehlman of private-equity firm KKR and Elizabeth Seeger of Environmental Defense Fund talked about their work together. CCE’s Brock and KKR’s Mehlman both said their firms got real value out of the partnerships—in terms of advice on how to better manage their operations, and from the public-relations value of the association with a green group. ”If we’re going to save the plant, we’re going to do it by making a profit,” says Mehlman. “That is the only way tit will be truly sustainable.” (When private equity firms, which are notoriously unsentimental, get serious about “going green,’ then you know the business case has become truly compelling.)

Interestingly, CCE and its sister company, Coca Cola, pay the WWF for its advice, and make donations to the group to help restore rivers and streams. But no money changes hands between KKR and EDF.

There are good arguments for both models, and you can read them in the column. My belief is that the NGOs, at a minimum, need to be transparent about their dealings with business. That is, they need to disclose how much money they are taking from their corporate partner over what period of time, and what services they are providing in return. One controversial partnership, a deal between the Sierra Club and Clorox, fails to meet this test. Here’s how the column begins:

Some environmentalists attack bottled water. Not Conservation International, a Virginia-based nonprofit that aims to protect the earth’s biodiversity.

When Fiji Water announced a sustainability initiative last spring to help protect forests on the remote Pacific Island of Fiji, Conservation International Peter Seligmann praised the move.

“We applaud Fiji Water for offsetting the climate impact of its products, reducing the impact of its operations, and funding crucial conservation efforts that support local communities and protect some of the last remaining forests in the South Pacific,” he said in a Fiji Water press release.

The endorsement didn’t surprise anyone who understands the relationships between Fiji Water and Conservation International. The privately-owned bottled water company pays Conservation International – neither party would say how much – to finance the work they do together. Stewart Resnick, who owns Fiji Water with his wife, Lynda, sits on Conservation International’s board and donates to the group.

Such cozy arrangements are increasingly common as big companies work side-by-side with big NGOs (non-government organizations). Clorox secured the endorsement of the Sierra Club – and the use of its logo — for a line of eco-friendly cleaning products, called GreenWorks that the company introduced late last year. Neither will disclose how much cash is involved.

You can read the rest here.