My Greenpeace conundrum

climate-change-pol_1203588cGreenpeace USA wants me to renew my annual membership. I’m ambivalent.

A letter signed by Phil Radford, who leads Greenpeace USA, paints a dire picture of the state of the environment:

We all see polluters poisoning our air, water and land; killing innocent wildlife, destroying our forests, pillaging aquatic life, increasing global warming and endangering human health–particularly the health of our children.

This is, alas, mostly true. US air quality is improving, although 40 percent of Americans live in counties that sometimes have unhealthy levels of air pollution, according to the American Lung Association. Water quality in most American streams and river is poor, the most recent report from EPA says. The amount of forest land in the US has been more or less stable for about a century, says the USDA’s Forest Service, but just this week, it was revealed that valuable forest land is being destroyed to supply “green” wood for burning in Europe. As for global warming–yes, there’s lots to worry about, and Greenpeace’s activism around the climate issue has been one reason why I’ve supported the organization for years. [click to continue…]

Biotech crops are winning over farmers

Bill Gates with farmers in India

The debate over biotech crops has become predictable.

In his 2012 annual letter from the Gates Foundation, Bill Gates, who has a near-religious faith in technology and innovation, argues that an “extremely important revolution” in plant science, i.e., genetically-engineered crops, can help farmers in poor countries by giving them access to new varieties of crops that will better resist disease and adapt to climate change.

Days later, the Center for Food Safety, a Washington watchdog group and persistent critic of Big Ag, pushed back, saying that biotech crops had failed to deliver on their promise to alleviate hunger, and that Gates would do better to support low-cost “agroecological techniques” that don’t depend on patented, genetically-engineered seeds.

The conflicting claims and supporting data are hard to sift through. Will disease-resistant biotech cassava answer the prayers of Christina Mwinjipe, a farmer in Tanzania, whose crops are threatened by diseases, as Gates writes? Or will patented genetically engineered crops prove disastrous for the 1.4 billion farmers in  the global south who now save seeds from one season to the next, as Andrew Kimbrell, executive director for the Center for Food Safety, argues?

The voices of farmers are rarely heard in these debates. (They’re probably working too hard.) But data released this week indicates  farmers, through their actions, are voting for biotech crops.

Last year, farmers planted an additional 12 million hectares of biotech crops, an increase of 8 percent over 2010, according to the annual biotech crop report of the ISAAA (International Service for the Acquisition of Agri-biotech Applications).

Most of that growth — 8.2 million hectares — came from the developing world, lead by Brazil and  India, the report says. The growth rate for biotech crops in developing countries was 11 percent, twice as fast and twice as large as industrial countries at 5 percent or 3.8 million hectares.

“Unprecedented adoption rates are testimony to overwhelming trust and confidence in biotech crops by millions of farmers worldwide,” said Clive James, the report’s author, in a statement. It must be said that James is an unabashed supporter of biotech crops but as best I can tell, his numbers haven’t been challenged. [click to continue…]

Japan’s nuclear crisis makes it harder to prevent climate instability

The short-term human and economic costs of the Japanese earthquake and tsunami are staggering.

The long-term repercussions could be worse.

That’s because, even if the situation does not deteriorate any further, the fires, explosions, radiation leaks at the Fukushima Daiichi nuclear plant will  lead to greater scrutiny–and higher costs–for new nuclear plants.

That will make it harder to develop low carbon energy to replace fossil fuels and avert potentially catastrophic climate change. [click to continue…]

Social funds: BP, the 1960s, and greed

Recently, after posting a column about BP and socially responsible mutual funds (See Social Funds and BP: How embarrassing!)  I heard from Adam Kanzer, who is managing director and general counsel at Domini Social Investments. While Domini has never owned shares of BP, Adam and I began a conversation about the role  of socially-responsible mutual funds. Adam, who has been in the fund business for twelve years, is a smart and committed executive, but we don’t always agree, so we decided to engage in a dialog about social funds.

Adam Kanzer
Adam Kanzer

Marc: Adam, let’s start with BP. Why did Domini exclude the company? Do you hold any other oil or coal companies?

Adam: Domini has consistently excluded BP from our portfolios because of our concerns about their safety record. Our initial review followed the Texas City explosion in 2005, but our decision was quickly reinforced by the Prudhoe Bay spill the following year.  We met with BP to discuss these and related issues with them. And each time we revisited BP, we found more violations.

We’re looking to identify the key sustainability challenges each company faces. For the oil and gas industries, worker safety and environmental compliance are among a handful of core issues we consider.  I should also note that we have consistently excluded Transocean and Halliburton, both of whom played a role in the Deepwater Horizon project. In addition we have also consistently excluded Massey Energy, the other current poster-child for disaster, as well as Toyota for substantial safety, employee relations and human rights concerns.  We discuss these decisions on our website. And yes, we do hold other oil and gas companies, although we set a high bar for entry. We do not invest in companies whose core business is coal mining.

Marc: Any thoughts on why BP was so widely held by other socially-responsible funds?

Adam: As CEO of BP, Lord Browne made very important statements about the reality of climate change at a time when others in his industry were denying its existence. That was important. In addition, BP has been committed to transparency on its social and environmental performance. I can’t speak for other firms, but I can see how those factors may have led some to hold BP. We felt that the safety and environmental issues outweighed these positives.

If a fund’s benchmark is heavily weighted towards oil, then an SRI manager will need to consider that. This tyranny of the benchmark certainly led many to hold BP and other oil companies that in a perfect world they would have preferred to avoid.

Which brings me to the important question that I have not heard – why did all of the so-called ‘mainstream’ investors buy BP? Why did investors allow this company to become one of the largest in the world by market capitalization? At least social investors weighed these issues and came to a decision. The rest of the market acted as if there was no problem.

Marc: That’s an excellent point, and it makes me wonder why people pay mutual fund managers such high fees. They missed the housing and Wall Street bubbles, and didn’t see or care about the safety issues at BP. Clearly most  funds aren’t very good at managing risk.

Turning to another topic, many SRI funds have their roots in the anti-war movement of the 1960s and 1970s as well as in faith-based investing. So funds like Domini exclude companies that make weapons, alcohol, tobacco and nuclear power. My question is, why? Let’s start with weapons. Don’t we need companies that make weapons in the post 9/11 era?

Adam:   First, it is important to understand that we divide those industries into two general categories – companies that provide addictive products and services, and companies whose products contribute to geopolitical instability. We place military weapons manufacturers and nuclear power in the latter category. We do not consider investments in addiction and global instability to be productive uses of capital.

National defense is too important to be placed in the hands of the same system that brought us the financial crisis. When Eisenhower issued his warnings about the growth of the military-industrial complex, he wasn’t questioning our need for a strong national defense. Yes, we need weapons, but do we need publicly traded companies manufacturing weapons? Are the capital markets an appropriate mechanism for providing these goods, or have the markets distorted our national priorities? That’s a critical debate our nation needs to have.

There are also categories of weapons that violate international humanitarian law because they cannot distinguish between military and civilian targets. These include landmines, clusterbombs and nuclear weapons. These ‘products’ make the world more dangerous, and landmines have caused incalculable misery to innocent civilians – including children – around the world. As investors, we have a responsibility to choose wisely. Our Funds’ shareholders choose not to profit from these violations, so we exclude these manufacturers and companies that manufacture nuclear weapons delivery systems.

Marc: What about nuclear power? Some environmentalists, notably Stewart Brand, say we need to seriously consider nukes in light of the climate crisis? [click to continue…]

Is geoengineering inevitable?

Geoengineering, says scientist David Keith, “is like chemotherapy. It’s something nobody should like.”

But if you can’t avoid cancer, chemotherapy may be your best option. And, if it becomes evident that the earth can’t avoid the catastrophic impacts of climate change, it is not merely possible that governments will turn to geoengineering.

Some people believe that it is all but certain.

Geoengineering, as you probably know, is the deliberate large-scale manipulation of the planet to counter global warming. It can take a number of forms, as the graphic below shows, some perhaps still to be discovered. Long a taboo subject, geoengineering is being talked about openly these days by scientists, environmentalists and policy thinkers.


The National Academy of Sciences held a workshop on geoengineering in June. Influential books including SuperFreakonomics and Whole Earth Discipline, by longtime environmentalist Stewart Brand, argue that it’s time to take geoengineering seriously. A congressional subcommittee held its second hearing on geoengineering just last week.

Among those testifying was Keith, who directs the energy and environmental systems group at the University of Calgary and, interestingly, also leads a team of engineers who are developing a technology to capture CO2 from ambient air. I heard him speak a week ago during a six-hour workshop on geoengineering organized by the Environmental Defense Fund, a nonprofit known for its pragmatism. EDF invited me to attend, on the condition that I seek permission from the scientists before quoting them. [click to continue…]

Why Stewart Brand’s new book is a must-read

Many books shaped my thinking about business, economics and the environment during 2009. Last year was the year that I discovered Nassim Nicholas Taleb and The Black Swan, to my great delight, as well as the year that I began to explore behavioral economics by reading Daniel Ariely’s Predictably Irrational and Nudge by Cass Sunstein and Richard Thaler. I enjoyed my friend Russell Roberts’ libertarian romance (yep) The Invisible Heart, and I learned a lot from The Myth of the Rational Market, a timely and readable history of the economics of markets by my ex-Fortune colleague Justin Fox.  The Good Soldiers by David Finkel is a searing up-close look at the surge in Iraq that should be read by any American citizen who wants to better understand the human costs of the wars being waged by our government.

SBjpg-filteredBut the book that I most want to recommend to readers of this blog is Whole Earth Discipline: An Ecopragmatist Manifesto by Stewart Brand. It’s brilliant, controversial, unconventional and lively. Nothing I read in 2009 changed my thinking more.

I’m not alone in my admiration for Stewart’s book. Paul Hawken calls it “likely one of the most original and important books of the century.…” Edward O. Wilson says it is “ominous and exhilirating.” Larry Brilliant says it is “an absolutely seminal work, extraordinarily well written, a tour de force of so many interconnected worlds and lives and studies.” Nice blurbs, no?

The praise is all the more remarkable because Whole Earth Discipline argues that we need nuclear power to combat global warming, that we need biotechnology to feed the world and that we need to take  geo-engineering seriously — ideas that are anathema to much, though not all, of the environmental movement that Stewart helped create roughly 40 years ago.

For those of you (younger readers) who aren’t familiar with his work, Stewart, who is a vigorous 72-year-old, is best known as the editor of Whole Earth Catalog, an influential compendium of all things countercultural, published in the late 1960s and 1970s, with a photo of the earth seen from space on its cover. After an LSD-induced experience that got him thinking about the curve of the earth, Stewart campaigned to have NASA release the picture. Later, he wrote:

It is no accident of history that the first Earth Day, in April 1970, came so soon after color photographs of the whole earth from space were made by homesick astronauts on the Apollo 8 mission to the moon in December 1968. Those riveting Earth photos reframed everything. For the first time humanity saw itself from outside… Humanity’s habitat looked tiny, fragile and rare. Suddenly humans had a planet to tend to.

Since then, Stewart has been a writer, a speaker, an organizer, a pioneer of online communities as a founder of the WELL (the “Whole Eart ‘Lectronic Link,” where I first discovered the power of the Internet), a consultant to companies and the owner of a tugboat in San Francisco where he lives with his wife, Ryan Phelan. He writes: [click to continue…]

NRDC’s Frances Beinecke: Act now on climate!

FGB Book Portrait Wood (IMG_8241_1)Just last week, Frances Beinecke, the president of the Natural Resources Defense Council, gave a speech to a Chicago business audience and the first question went something like this: I read the Wall Street Journal, I still don’t believe in climate science and I want to hear the full  story.

Beinecke’s new book, Clean Energy Common Sense: An American Call to Action on Global Climate Change (Rowan & Littlefield, $9.95), is aimed at those who are skeptical–or at least curious–about the climate change debate. It’s a slim (106 pages), straightforward, easy-to-read argument that  that attempts to connect the climate issue to everyday concerns like jobs, the economy and national security.

“When you go out to Gary, Indiana, Cleveland or Chicago, people are still uncertain,” Beinecke said, as she unveiled the book at the National Press Club in Washington.” They’re not clear on what the science is, what the solutions are, what the threats are, what the impacts are.”

And so Beinecke, as you’d expect, makes the case that the problem is dire, the solutions affordable and the benefits tangible–new jobs, less reliance on imported oil and a livable planet.

To her credit, though, she’s willing to go beyond the what’s-in-it-for-you argument and describe the climate crisis as what it is–the overarching moral issue of the moment, and one requiring immediate action:

Global climate change is the single greatest environmental challenge of our time. And yet, it is far more than that. It is a humanitarian challenge. It is an economic challenge. It is a national security challenge. It is the great moral challenge of our time.

If only more political leaders would frame the issue that way, instead of appealing only to the narrow self interest of voters. [click to continue…]