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.

Why do more farmers every year plant biotech crops? Critics of genetically-modified crops will say they are tricked into it by marketing or lack of knowledge or short-termism, and it’s certainly true that the popularity of a product is not a reliable indicator of its value. (ABBA sold more records than the Rolling Stones. People smoke cigarettes.) But if biotech crops didn’t make farmers more productive, or save them time or money, would they spread around the world as consistently as they have?

James writes: “There is one principal and overwhelming reason that underpins the trust and confidence of risk-averse farmers in biotechnology – biotech crops deliver substantial, and sustainable, socio-economic and environmental benefits.”

The top five countries that have embraced biotech crops–the US, Brazil, Argentina, India and Canada–each planted more than 10 million hectares of the crops. Of the 16.7 million farmers who grew biotech crops, about 14 million were small, resource-poor farmers in China and India, most of them planting pest-resistant Bt cotton. In Africa, three countries–South Africa, Burkina Faso and Egypt–have commercialized biotech crops, and others, including drought-tolerant maize, are being tested.

In his letter, Gates argues that not nearly enough agricultural research is being done:

Given the central role that food plays in human welfare and national stability, it is shocking—not to mention short-sighted and potentially dangerous—how little money is spent on agricultural research. In total, only $3 billion per year is spent on researching the seven most important crops…Very little of the country and private spending goes toward the priorities of small farmers in Africa or South Asia.

Andrew Kimbrell

But critics like Andrew Kimbrell says the biotech industry has failed to deliver on its promise to feed the world:

The biotech industry has exploited the image of the world’s poor and hungry to advance a form of agriculture that is expensive, input-intensive, and of little or no relevance to developing country farmers.

The debate will rage on. Meanwhile, a campaign is underway to require the FDA to label genetically engineered foods. Supporters of labeling, most prominently Gary Hirshberg of Stonyfield Farms, say we have a right to know what’s in our food: “Without a requirement to label foods containing these ingredients, we are forced to be guinea pigs in a giant experiment involving our health and the environment.”

By contrast, in his book Whole Earth Discipline: An Ecopragmatist Manifesto, the veteran environmentalist Stewart Brand wrote:

I daresay the environmental movement has done more harm with its opposition to genetic engineering than with any other thing we’ve been wrong about. We’ve starved people, hindered science, hurt the natural environment and denied our own practitioners a crucial tool.

Your thoughts?

[Disclosure: I'm paid to moderate the annual policy conference of Croplife America, a trade association of big agricultural firms, which sell biotech seeds.]

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.

I say this although I believe we should try to avoid a rush to judgment.

It’s hard to know what’s worse: the opportunism of anti-nuclear activists like Ed Markey, the Massachusetts congressman who only hours after the troubles began declared that

what is happening in Japan right now shows that a severe accident at a nuclear power plant can happen here

or the no-need-to-panic defense of industry backers like William Tucker who wrote in the Wall Street Journal on Monday that

If a meltdown does occur in Japan, it will be a disaster for the Tokyo Electric Power Company but not for the general public.

Oh really?

What I hope to do here is provide a little context–about the costs of  nuclear power and the alternatives.

Let’s begin with the alternatives. Thanks to the website oilprice.com, here are a few widgets that show where our energy is coming from, around the world and here in the U.S.:

While I understand that we can’t project a future based on past trends, what jumps out at me from these charts is how thoroughly the global and U.S. energy markets are dominated by fossil fuels. Note that the numbers for solar, wind and geothermal are expressed in mBTU. You have to lop off the last three digits to compare them to the figures for oil, coal, natural gas and nuclear.

Given today’s low natural gas prices, and the abundant supply of coal in the U.S. and China, which are the world’s two biggest energy consumers, as you’ll see below, and the absence of a price on carbon, there’s little doubt that a pullback from nuclear will mean more burning of fossil fuels.

The costs of nuclear plants, meanwhile, are already steep and bound to get steeper. Just last month, the Union of Concerned Scientists published a sobering 146-page report called Nuclear Power: Still Not Viable Without Subsidies. [PDF, download]

“Since its inception more than 50 years ago, the nuclear power industry has benefited—and continues to benefit—from a vast array of preferential government subsidies,” writes Doug Koplow, a Harvard MBA who has written about natural-resource subsidies for years. Virtually every segment of the nuclear business, from the mining of uranium to the construction of power plants to the under-pricing of cooling water, gets favorable government treatment, the report says.

The most important subsidies are not cash, but policies that shift construction and operating risks from the plant owners to taxpayers.  The report says:

Reactor owners, therefore, have never been economically responsible for the full costs and risks of their operations. Instead, the public faces the prospect of severe losses in the event of any number of potential adverse scenarios, while private investors reap the rewards if nuclear plants are economically successful. For all practical purposes, nuclear power’s economic gains are privatized,  while its risks are socialized.

That sounds terribly familiar, doesn’t it?

Particularly relevant in the context of Japan is the Price-Anderson Act, which limits total industry liability in the event of an accident.

You can be sure that the debate about the safety of existing and proposed U.S. plants, which is already underway–see, for example, Can U.S. Nuclear Plants Handle a Major Natural Disaster at ProPublica–will either increase the regulatory costs of developing new plants or impose more redundant (in a good sense) safety measures as part of plant construction, or both.

Today, Kevin Book, the top-notch energy analyst with ClearView Energy Partners, wrote today [PDF, download] :

Fear factor. Yesterday, German Chancellor Angela Merkel suspended electricity production at seven nuclear plants built before 1980, pending a three-month review. … The political response goes well beyond Germany. On Monday, Switzerland froze construction of three already-approved new plants. Austria’s environment minister and the U.K. energy secretary have initiated their own safety investigations. Although U.S. reactions may not be as dramatic, prospective construction faced headwinds from the high absolute costs of nuclear plants and high relative costs vis-à-vis other conventional sources, and we would not be surprised to see lukewarm Congressional nukes supporters cooling to them fast.

None of this is good news for anyone who worries about global warming. Over the past few years, as I’ve spoken to a range of people–Stewart Brand, David Keith and Ken Caldeira, among others–I’ve grown more concerned about the climate crisis and more inclined to support nuclear power as a low-carbon solution, particularly given that all forms of energy production create risks and require tradeoffs.

But the nuclear options looks a whole lot less attractive today than it did a week ago. And that’s a problem.

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

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?

Adam: Before nuclear power can be seriously considered to be an effective answer to climate change, we need to solve the nuclear waste problem and we need to address the link between nuclear power and nuclear weapons proliferation. To date there is no way to distinguish between the uranium enrichment process that is necessary to fuel a nuclear power plant and the enrichment of uranium for use in a nuclear bomb.This is an issue that Amory Lovins raised decades ago, and it has only increased in importance since then. The risks and the upfront costs of nuclear power are still, in our view, far too high. I believe this is still the ‘mainstream’ view among environmentalists.

Marc: So you don’t like nukes or coal. Do you invest in any companies that provide the baseload power we need to run our lives (including this blog!)?

Adam: Yes. We do invest in energy companies, such as AGL (Australia), EOG and Noble.. We have also approved utilities, such as National Grid, but evaluate the source of the energy. We review each industry and subindustry against a set of corresponding key indicators. For example, we would look at a water utility differently than a company involved in natural gas distribution and transmission, or a nuclear or coal-based utility. And, of course, we’re looking for companies with significant commitments to renewable energy such as wind and solar power generation.

Marc: You mentioned addictive products–do you exclude Starbucks? Coffee’s addictive, right?

Adam: We’ve consistently approved Starbucks. We do not place caffeine addiction on the same level as alcohol, gambling or tobacco addiction in terms of harm to society. It doesn’t distort your decision-making and impair your daily functions in nearly the same way.

Marc: Let’s talk about performance now. Many of us want to invest in ways that are consistent with our values. That’s why I’m a shareholder in the Domini Social Equity Fund. But we also want to maximize our returns.

Generally speaking, SRI funds have tracked broader market indexes, running slightly ahead during some time periods and behind during others. Domini Social Equity, for example, has averaged a –1.02% annual return over the five years ended on June 30, 2010, compared to –0.79% annual return for the S&P500, meaning that an investor would have done slightly better with an index fund.

If I’m not mistaken, you and I share the belief that companies that are socially and environmentally responsible will provide superior shareholder value in long run.So I’m wondering–why haven’t social funds, as a group, outperformed?

Adam: First, if you want an apples to apples comparison, you might want to look at the S&P 500 Index versus the FTSE KLD 400 Social Index, which now has a 20-year track record. From May 1, 1990 through July 31, 2010, the S&P had an annualized return of 8.39% and the KLD 400 an annualized return of 9.14%..

Whether this outperformance on an index-to-index basis will continue is anyone’s guess, but there’s absolutely nothing wrong with simply tracking broader market averages, without outperforming. That means you can do just as well by investing responsibly, and that’s certainly good news.

We have never made any claims that SRI will always outperform. There are times when greed, dishonesty and environmental destruction pays. The market does not consistently reward responsibility, or punish irresponsibility. I think Gap is doing a great job addressing labor conditions in its supply chain, for example, but that doesn’t necessarily mean that the next style they introduce will be well received. Compare BP to Shell. A decision to avoid BP was only rewarded after disaster struck. Meanwhile, the New York Times reports that Shell has had the equivalent of an Exxon-Valdez oil spill in Nigeria every year for the past fifty years. That doesn’t seem to be reflected in Shell’s stock price. Incidentally, we have also never approved Shell for the Domini funds.

We need to be very careful on two fronts here. First, we must never overstate the potential for long-term performance of SRI funds – or any investment strategy for that matter. There are many factors that can affect a fund’s performance over time, including the fund manager’s expertise. When SRI funds underperform in a particular time period, they often do so for the same reasons many actively managed funds underperform. We do believe that social and environmental factors are financially material and can help us to identify better long-term investments, but the market is not always going to reward these particular characteristics.

Second, we need to begin a more important conversation about what it means to earn a ‘responsible’ rate of return. What are the appropriate benchmarks? Why do I need to demonstrate that I can outperform a benchmark dominated by polluters and human rights violators?

What do you mean when you say we wish to ‘maximize’ our returns? Certainly not at any cost? If I could guarantee you a 1,000% return on a direct investment in genocide, I’m sure you wouldn’t have any problem passing up that opportunity. Profit ‘maximization’ is another one of those myths that needs to be exposed. Nobody is truly seeking to ‘maximize’ returns. I would prefer to see a national discussion on the ends we wish to achieve through our investments, rather than this rather narrow discussion of whether SRI can perform. Yes, it can. That’s only the beginning of the story.

The definition of success in investing as outperforming a benchmark is ultimately weak and incomplete. Surely investing has something to do with creating real value—a stable, equitable society moving toward ideals of justice and sustainability. If we define success in investing simply as beating your neighbor, even if the market as a whole or society as a whole is suffering significant losses, I think we have drained the activity of all intrinsic value.

Marc: Interesting points. Of course no one wants to maximize returns at any social and environmental cost. But I don’t agree that there’s a tension between doing the right thing and doing well as a business, at least in the long run. if you don’t believe that over time, companies that are most socially and environmentally responsible will outperform their peers, then we are both fighting a losing battle when it comes to changing the way business is done.

I’ve always longed for an SRI fund that would do deep research and select 20 to 30 leading  companies—companies with strong values and solid businesses—with the belief that those companies would, in fact, outperform the market as a whole. I wrote about companies like Starbucks, Southwest Airlines, Timberland, UPS and Domini in my book, Faith and Fortune, and they were all top performers in every sense. (I picked HP, too, which hasn’t turned out so well.) What do you think of a focused SRI fund that selects a small number of the best companies?

Finally, you write that “we must never overstate the potential for the long-term performance o SRI funds,” but don’t you find it strange that the SRI funds are about the only mutual funds out there that don’t claim to be the best way to invest?

Adam: You’ve packed a number of important points into that question, so let me try to take them one at a time.

First, I’m glad you agree that no one wants to maximize returns at any social or environmental cost. But I see very little evidence of that thinking outside of a relatively small group of investors. BP and Massey are the latest examples – investors were quite happy to own their stock despite their miserable safety records.  PetroChina’s connections to genocide have not led to a mass exodus by investors.

So let me rephrase my statement slightly. When I say nobody really seeks to maximize return, I mean that virtually everyone places some limitation on that quest for profit. We all impose some sort of limit on that “profit maximization” objective. Milton Friedman would say profit “within the rules of the game”, but didn’t define what those rules were. Social investors, and most ordinary rational human beings, would say “without harming others.”

It’s a fairly simple concept that is still largely absent in  mainstream investment circles. Financial theory has established financial risk as the only meaningful limit on profit maximization. It is an inherently amoral, and therefore inhuman system. Thankfully, this attitude appears to be changing. I would strongly disagree that we’re fighting a losing battle. To me, the evidence suggests that we’re winning.

I think it is also important not to get caught in the trap of measuring performance solely in financial terms. Some companies provide greater social and environmental benefits to society than others. Markets may recognize that fact at some times and fail to recognize it at others. But we at Domini invest to achieve a combination of the two—both the social/environmental benefits and the financial return.

Domini does believe that companies with stronger social and environmental profiles should perform better in the long term, and that the use of social and environmental factors can help manage certain types of investment risk. We do believe it is a better way to invest, as well as a more rational, civilized, humane and ultimately beneficial way to invest.

If we sell SRI purely on this concept of ‘outperformance’ we will lose investors the moment the markets turn. SRI is not the latest get rich quick scheme. Social investors tend to stick around, rather than pursue the latest performance fad, because they understand this is a systemic answer to global problems.

Your idea for a focused ‘good guy’ fund is an interesting way to hold out exemplars of good corporate behavior, but it largely ignores the crux of the problem. We can’t simply ignore mid-cap and-large cap companies because they don’t currently meet our definition of purity. Unless you’re willing to say that it is inherently irresponsible to invest in large companies, then large cap investors need responsible options as well. Investors should not have to give up the opportunity to invest as responsibly as possible in well-diversified portfolios of large-cap companies, and they certainly should not give up the opportunity to engage with those companies and move them towards more sustainable business models.

Is SRI the ‘best’ way to invest? That depends on your definition of ‘best’ and the benchmarks you use to make that determination. Once you recognize that our investment decisions have an impact on the world, however, you come to accept that it is not appropriate to ‘outperform’ while destroying ecosystems and harming people. And in that sense, SRI becomes the only way to invest.

Marc: Adam, thank you. Maybe I’m asking too much, but I think it’s desirable–and possible–for a fund to deliver superior financial, social and environmental value. In the meantime, best of luck with your good work at Domini.

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.

Geoengineering is not a new idea — it was mentioned in a 1965 report on the environment delivered to President Lyndon Johnson. But until recently, environmentalists have avoided talking about it because they worry that a focus on geoengineering will divert attention and resources from their attempts to get governments and business to curb carbon emissions–attempts which, it must be said, have had limited success so far.

Nor is geoengineering entirely unproven. Experts say solar radiation management (SRM), the form of geoengineering that has drawn the most attention lately, can be achieved by adding light-scattering aerosols to the upper atmosphere or increasing the reflectivity of clouds below.

What makes scientists think it will work? When the Mount Pinatubo volcano in the Philippines erupted in 1991, spewing fine particles of sulfur dioxide into the stratosphere, enough sunlight was reflected back into space that the earth was cooled by about 0.5 degrees C, at least for a time.

The trouble is, solar radiation management surely will have  other consequences as well. Some are known—less precipitation and less evaporation, which is bound to affect agriculture—and others are not.

“The concerns, really, are the unknown unknowns,” says Keith.

The EDF workshop was itself a sign that geoengineering is moving closer to the mainstream. It was organized for EDF’s  trustees and senior staff during a board meeting at Cavallo Point in Sausalito, Ca.; the organization hasn’t decided yet whether to support further research into geoengineering but, to its credit, it is open-minded about the idea. Listening to the presentations, I found myself appalled at times and thrilled at others. This is a fascinating subject, one that raises many more questions than there are answers.

One useful way to think about geoengineering in general and SRM  in particular is to compare them to mitigation, the current approach to climate change. Mitigation means reducing carbon emissions, most importantly by replacing the burning of fossil fuels (coal and oil) with low-carbon energy sources such as wind, solar, nuclear power, so-called cleaner coal and biofuels–on a vast scale. Mitigation requires enormous expenditures of capital and takes a very long time to work because CO2 emitted today persists in the atmosphere for decades. Even if we could arrange for an international agreement to curb emissions, which we cannot, it will take decades to reverse the rising concentrations of carbon in the atmosphere.

David Keith

By contrast, solar radiation management is arguably “fast, cheap and imperfect,” said Keith–particularly if it is done crudely and without proper governance, oversight and testing. As little as $5 to $10 billion a year could pay for a short-term program, scientists estimate. By email, Keith put it this way: “The raw cost of implementation is less than 10% and probably less than 1% of the cost of cutting emissions when you average costs over 100 years.” Most of the technology required is within reach.

“It’s pretty clear that you could do it if you wanted to, and you could do it now,” Keith said. “If we put a lot of reflective aerosols in the upper atmosphere, it gets colder and it gets colder quickly.”

What the best way to block the sun’s rays? That’s to be determined. Keith explained that high-flying planes could scatter sulfate particles in the stratosphere, although little is known about how the aerosols would be formed into particles and therefore how long they would stay in the air.  Stephen Salter, an emeritus professor of engineering design at the University of Edinburgh, said a fleet of about 500 self-driven sailing ships could be designed to spray salt water into the air that would increase the reflexivity of clouds, thereby blocking sunlight.

SuperFreakonomics, meanwhile. put a spotlight on Intellectual Ventures Lab, a Seattle-based company led by former Microsoft chief technology officer Nathan Myrhvold that is researching geoengineering. Here’s a four-minute video about an Intellectual Ventures’ invention called the StratoShield, essentially a giant hose held up by helium ballo0ns that would inject  a fine mist of aerosolized sulfur dioxide 18 miles above the earth.

You can be sure that if research money is made available to study geoengineering, new ideas for tinkering with the earth on a global scale will arise. Two years ago, I wrote a cnnmoney.com column about a startup called Climos that is exploring techniques for removing carbon dioxide from the air by sprinkling iron dust on oceans. (For what it’s worth, the scientists at EDF’s event told me that will never work.)

In any event, the very fact the crude geoengineering can be done inexpensively and easily is one reason why it’s worrisome. “It is cheap enough so that small countries could act alone,” Keith said. In theory, a wealthy island nation that felt threatened by rising sea levels could try geoengineering. Countries have done dumb things before.

Surprisingly little research has been done on geoengineering. A article by David Victor et al called The Geoengineering Option, published last spring in Foreign Affairs, said:

Nearly the entire community of geoengineering scientists could fit comfortably in a single university seminar room, and the entire scientific literature on the subject could be read during the course of a transatlantic flight.

Nor is it clear how geoengineering can be tested, and how useful any tests would be. Writing in the Jan. 29 issue of Science, Alan Robock et al tackles this subject and says that “stratospheric geoengineering cannot be tested in the atmosphere without full-scale deployment.” (Here’s a link to their story and here’s one to Keith’s work.)

David Victor, a professor at the University of California, San Diego, and an author of the Foreign Affairs article, told the EDF gathering:  “The odds of deploying a bad geoengineering system are greater today than the odds of responsible nations coming together and deploying something that is well-designed.”

This is why it’s not just the science of geoengineering that demands further study; policy and governance issues are equally important, if not more so. Imagine, for example, a scenario in which injecting aerosols into the atmosphere would cool the earth and slow down a rise in sea levels that threatened one country, while reducing the amount of rainfall in a neighboring country that was struggling to feed its people.

As Alan Robock, an environmental scientist at Rutgers, put it:

What temperature do we want the planet to be? Whose hand is going to be on the thermostat? What if Russia and Canada decide it’s fine to get a little warmer, but India wants it cooler?

Stewart Brand

There’s lots more to say about all this, obviously. I’m going to devote a future blogpost to the ideas of Scott Barrett, an economist who has an interesting analysis of the economic incentives that drive both climate change mitigation and geoengineering. If you want to know why Stewart Brand supports geoengineering research, you can sign up for a free webinar on February 18 at The Energy Collective where I’ll be talking with Stewart. I’m also going to try to organize a conversation about geoengineering at Brainstorm Green, FORTUNE’s conference on business and the environment, that will be held April 12-14 in Laguna Beach, CA.

A final thought on why the chemotherapy analogy is imperfect. With cancer, you can reduce but not eliminate your risk of getting the disease. By contrast, we know what to do to curb global warming.

So the question is, can we summon the collective will to stop burning fossil fuels? If you ask me, the alternatives–including geoengineering–are pretty darn scary.

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.

But 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:

Because I’m an ecologist by training, a futurist by profession and a hacker (lazy engineer) at heart, my bent is scientific rigor, geoeconomic perspective, and an engineer’s bias, which sees everything in terms of solving design problems.

Fun fact about Stewart: He owns the table where Otis Redding reportedly wrote “Dock of the Bay.”

I’m not going to try to summarize Stewart’s arguments about nukes, GMOs or geo-engineering here, but let me try to give you a flavor of his thinking and writing.

On nukes, he says, given the urgency of the climate crisis,  it’s a little nutty to worry about how to dispose of radioactive waste hundreds or even thousands of years from now since we can’t predict technological progress between now and then (although we can sure there will be lots of it). And, as he notes:

Nuclear waste is minuscule in size—on Coke can’s worth per person-lifetime of electricity if it was all nuclear…Coal waste is massive—68 tons of solid stuff and 77 tons of carbon dioxide per person-lifetime of strictly coal electricity.

France, which built a fleet of 56 reactors in about 20 years because of an efficient licensing process, now has

the cleanest air in Europe, the lowest electrical bills and a $4 billion export business selling energy to all its neighbors, including Green Germany and nuclear Britain (2 gigawatts a year flows west under the English Channel). France shut down its last coal-fired plant in 20094. It emits 70 percent less carbon dioxide per capita than the United States.

I didn’t know that. Did you?

On biotech food, Stewart is characteristically blunt:

I daresay the environmental movement has done more harm with its opposition to genetic engineering than with any other thing we’ve been wrong about. We’ve starved people, hindered science, hurt the natural environment and denied our own practitioners a crucial tool.

He has a great rant about “natural food” (see page 133) as well as a fascinating account of the debate over genetic engineering inside the environmental movement in the 1970s which, among other things, led the scientists Lewis Thomas and Paul Ehrlich to part ways with Friends of the Earth. Since the mid-1990s, as Stewart notes, we (meaning earthlings) have conducted “the most massive dietary experiment in history” with most everyone in North America eating biotech foods and most everyone in Europe doing without them. The results are in, and no difference can be detected between the test and the control group. He goes on to write about what he calls a “GE-inclusive organic agriculture” as well as the potential of foods engineered to produce health benefits.

There’s much more to recommend in Whole Earth Discipline. It turns out that Stewart is a fan of urbanization, having abandoned what he calls his “Gandhiesque romanticism about villages.” Slums in the global south, he says, are hotbeds of innovation and cooperation, they cure overpopulation and they are better for people and the planet than the subsistence farms seen by many as “soulful and organic.”

I’ll save Stewart’s ideas about geo-engineering for another blogpost. Meanwhile, read this book. And, if you can, join us at FORTUNE’s Brainstorm Green conference about business and the environment, where I’m delighted that Stewart Brand will be one of the featured speakers.

Whole Earth Catalog, 1968

Whole Earth Discipline, 2009

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.

And, while Americans don’t like to hear it, she also goes straight at the issue of climate justice, writing:

The United States and other high-income nations produced, on average, 15 tones of greenhouse gases per person in 2005, according to World Bank calculations. That’s more than seven times the per-capita rate in low-income countries. And yet, it is low-income people who bear the sharpest risk and most immediate consequence of global climate change.

If that’s not unjust, then I don’t know the meaning of the word.

Beinecke has worked for NRDC for 35 years, since graduating from Yale with one of the first classes of women to do so and earning a master’s degree from the Yale School of Forestry. (Yes, for Yale alums reading this blog, she comes from the family that gave its money and its name to the Beinecke Rare Book and Manuscript Library and she’s a former member of the Yale Corporation, which governs the university.) She has been president of NRDC since 2006, and has devoted herself passionately to the climate change issue for about a decade.

Her book does a couple of things well. First, it makes clear that the science of climate change, while uncertain in many respects, is unequivocal when it comes to the question of whether burning fossil fuels is warming the earth. While temperatures have leveled off for about a decade, she reminds us that “the 15 hottest years on record have all occurred since 1991.” That’s no accident. It should be a big worry. Then there’s this: “Artic ice is essential to the world as we know it, and the fact is it’s melting at an alarming rate.”

Second, the book makes clear that the cost of mitigating carbon emissions is manageable:

Clean energy legislation would cost the average American household $160 a day in 2020, according to the CBO [Congressional Budget Office], or right at 44 cents a day. The EPA estimates the average per-house cost at between $80 and $111 per year–or 30 cents, on the high side, per day. And the DOE has set the cost of this kind of legislation at $83 a year by 2030, or 23 cents a day.

Not a big price to pay for, oh, preserving civilization as we know it.

The book isn’t as specific about solutions. Beinecke writes that we need to do three things: Reduce global warming pollution (duh), promote alternatives to fossil fuels (OK, but which ones?) and help our country make a smooth transition to the clean energy future we need (well, yes, but how?).  NRDC supports a cap-and-trade system, which, in theory, would leave  specifics to the market, but legislation now making its way through Congress is laden with subsidies and prescriptive measures, ranging from efficiency standards for appliances and buildings to big bets with your tax dollars on so-called clean coal. Bipartisan negotiations among Sens. Kerry, Graham and Lieberman (who makes it tripartisan) bring such options as nuclear energy and offshore drilling into play.

I asked Beinecke whether nuclear power was part of the climate solution. She was a little vague, saying “it will continue to play a role.” Well, sure, but should environmentalists be pressing for more nukes? She replied:

…there are several issues that we care a lot about, like waste and security and proliferation, that we think still need to be addressed.  But the overall issue for nuclear has and continues to be cost.

Later, she told me:

We are not in favor of additional subsidies to the nuclear industry. They’ve been subsidized for the last 50 years. It’s a mature industry….Let it compete, on its own, without subsidies.

That’s not a bad answer, except that NRDC and other enviros favor subsidies for cleaner coal (which, to be sure, is newer), wind and solar (which have been around a lot longer). I’m reading Stewart Brand’s fascinating new book, Whole Earth Discipline, and will return to the nuclear issue soon. Ideally, since no one knows for sure which solution is best, and subsidizing all of the above is a cop-out, as well as expensive, we’d wipe out subsidies, put a steep price on carbon and let the market decide–which was the whole idea behind cap-and-trade before the bills in Congress grew past the 1,000-page mark.

If you’ve followed the climate debate, you need not read Clean Energy Common Sense. Read Stewart’s book instead, or Al Gore’s new tome. But if you have a friend or relative who is open-minded or disengaged, buy the book as a gift. As Beinecke says: “This is the time for people to pay attention.” And to act.

Two final notes. I’m delighted that Frances has agreed to speak at FORTUNE’s third Brainstorm Green conference, about business and the environment, which will be held April 12-14 in Laguna Niguel, CA. And here’s a shout out to my Bethesda neighbor Bob Deans, the former White House reporter for Cox Newspapers, who joined NRDC last summer (after writing this lovely farewell), just in time to help Frances write the book.

Frances Beinecke, president, NRDC