How green are green bonds?

corp-bondSome $34 billion in bonds labeled as green have been sold so far in 2014, three times as much as last year. Some experts predicting that as much as $100 billion of green bonds will be sold in 2015. These bonds — issued by governments, companies and international financial institutions like the World Bank — will help to finance solar and wind energy, hybrid cars, efficient buildings, cleaner waterways.

This sounds like unalloyed good news–and it may be. It’s just hard to know.

Today, the YaleEnvironment360 website posted my story about green bonds, headlined with a question: Can Green Bonds Bankroll A Clean Energy Revolution? Again, the answer is maybe. That unsatisfying, perhaps, but that’s the way it is.

That’s because, for the moment, a green bond is any bond that an issuer decides to label as green. Big banks and NGOs are working to set stricter standards, but they will take a while to arrive. So, for example, corn ethanol, nuclear power and methane capture while fracking could all be deemed green.

The bigger question, though, is whether green bonds are financing projects that, without them, would not get done. Again, that’s hard to say. But if all we are getting with green bonds are labels on bonds that would have been issued anyway, we’re wasting our time.

That said, there’s potential here–at heart, the potential to attract new money to finance low-carbon infrastructure. So the boom is green bonds is worth watching.

Here’s how my story begins:

Looked at from one angle, climate change is an infrastructure problem. To limit global warming to 2 degrees C and avoid the worst effects of climate change, about $44 trillion will need to be invested in low-carbon projects like wind farms, solar panels, nuclear power, carbon capture, and smart buildings by 2050, the International Energy Agency estimates. That’s more than $1 trillion a year — roughly a four-fold jump from current investment levels.

Where’s the money going to come from? Maybe from green bonds, say bankers and environmentalists alike. Green bonds, which are also known as climate bonds, are fixed-income investments that are designed to finance environmentally friendly projects. Pioneered by international development banks — the European Investment Bank issued the first climate bond in 2007, followed a year later by the World Bank — they are today issued by state and local governments (Massachusetts, Hawaii, New York, and the cities of Stockholm and Spokane, Washington, among others) and by big companies (Bank of America, Unilever, and the French utility GDF Suez).

Uses of the bond proceeds are varied. The World Bank sold green bonds to raise funds for geothermal energy in Indonesia and free compact fluorescent bulbs for the poor in Mexico. Massachusetts raised money to clean up a superfund site. Energy company EDF’s green bond financedwind farms in France, and Toyota used the proceeds from a green bond to make loans to American consumers who buy hybrid cars.

The story goes on to explain why “green bonds may not be all they’re cracked up to be.” You can read the rest here.

If electric cars are the answer, what’s the question?

An eVgo charging station
An eVgo charging station

Like many environmentalists, I’d love to see lots of people driving electric cars. If  broadly adopted, electric cars will go some way towards limiting air pollution, reducing greenhouse gas emissions and undermining the power of oil oligarchs in the Arab world and elsewhere. Electric cars produce what economists call “positive externalities,” that is, consequences that benefit people other than their owners.

But what problem to do they solve for electric-car owners? That question has been on my mind since my recent visit to Israel, when I drove a Better Place car and experienced, first-hand, one of the obvious drawbacks of electric vehicles: They don’t go very far without refueling. [See my January blogpost, Better Place is alive but not well.] This is a problem not just for Better Place, but for other sellers of pure electric cars, like the Nissan Leaf and the Tesla Model S.

Today, I took a closer look at Better Place in a story for the YaleEnvironment360 website. Here’s how it begins:

If you want to sell electric cars, Israel looks like a great place to start. It’s a small country, with most people clustered around Tel Aviv and Jerusalem. Gasoline costs more than $7.50 a gallon, and oil revenues help support Israel’s Arab foes. So it’s easy to understand why Shai Agassi, an entrepreneur who was born in Israel and made a fortune in Silicon Valley, chose to launch his Better Place electric-car company in Israel, while preparing plans to expand in Europe, Australia, Japan, China, and the U.S.

What’s harder to understand is why things have gone so badly. Better Place, which staked out its position in the electric car market with an innovative battery-swapping technology, has sold only about 750 cars in Israel, while piling up losses of more than $500 million. Agassi was forced out of Better Place in October, his successor as CEO quit in January, and the company has put its global rollout on hold. Better Place needs to raise more money this year, and that won’t be easy, insiders say.

Start-ups often stumble, of course, but Better Place’s woes raise questions that matter to anyone who cares about electric cars and their future in a low-carbon economy. Has Better Place sputtered because of its own mistakes, or are the company’s difficulties a sign of the broader challenges facing electric cars?

As part of my reporting (much of which didn’t make its way into the story) I spoke to executives at General Motors, Nissan, the charging network eVgo and others, to see how electric cars are faring here in the U.S. Last year, Americans bought 52,000 all-electric cars or plug-in hybrids–vehicles, that is, designed to run primarily on electricity, like the Leaf,  the Chevy Volt and the Tesla. That’s about 0.35% of U.S. car sales, which topped 14.5 million in 2012. By comparison, the best-selling passenger car, the Toyota Camry, sold 405,000 units, without, incidentally, the benefit of the billions of dollars in government loans, grants and tax credits that have flowed to the electric car industry. EVs have attracted lots of attention but they have been slow to penetrate the mainstream. [click to continue…]

My beef with beef

Should environmentalists just say no to eating meat?

That was the headline over my latest story for the YaleEnvironment360 website. The story looked at the Global Roundtable for Sustainable Beef, a collaboration between environmental groups  and industry to improve the way beef is produced. The roundtable was put together by Jason Clay, a top executive at  the WWF, and includes such companies as McDonald’s, Cargill and Walmart. The roundtable will try to measure the environmental footprint of beef production methods, and spread best practices. If people are going to keep eating beef — and they are — the roundtable’s work should be valuable. While I’d feel better about the effort if it were not predominantly financed by industry, Clay and his colleagues are well-intentioned, in my view.

Having said that…I can’t help but wonder why environmental groups aren’t more vocal about asking their supporters to eat less beef–and especially to avoid beef from factory farms (or, if you prefer, Concentrated Animal Feeding Operations, or CAFOs).

As I wrote in the YaleE360 story, beef

…has twice the greenhouse gas emissions of pork, nearly four times more than chicken, and more than 13 times as much as vegetable proteins such as beans, lentils and tofu, according to the Environmental Working Group. Eating less meat is the most important thing an individual can do to curb climate change, some scientists say. If Americans were to reduce their meat consumption by a mere 20 percent, it would be as if we all switched from a standard sedan — a Camry, say — to the ultra-efficient Prius, according to Gidon Eshel, a research professor at the Bard Center for Environmental Policy, and Pamela A. Martin, an assistant professor of geophysics at the University of Chicago.

And yet:

… green groups that readily fight coal plants or suburban sprawl have for the most part shown little desire to do battle with meat. The Meatless Monday campaign was started not by environmentalists but by the school of public health at Johns Hopkins. The Mayo Clinic has more to say about meat than The Nature Conservancy, although TNC’s chief executive, Mark Tercek, is a vegetarian. Another vegetarian, Danielle Nierenberg, who directs the Nourishing the Planet program at the Worldwatch Institute, explains: “Most environmental groups don’t want to tell people what to eat or what not to eat. It’s a personal issue that’s tied to your culture, to your history, to what your mom fed you when you were five years old.”

Danielle is correct–no one likes to be nagged about eating, or not eating, their dinner–but I think there’s more to it than that. The big environmental NGOs are generally reluctant to tackle the issue of overconsumption. Americans, as a group, drive big cars, live in big houses, buy too much stuff and throw too much of it away. None of this makes us, as a group, much happier, research indicates. But environmental groups don’t talk about this as much as they should, perhaps because they don’t want to alienate their well-to-do donors. [click to continue…]

Endless shrimp? Alas, no…


Americans love shrimp. We eat about four pounds of the little pink crustaceans per person, per year, three times as much as we ate back in the 1970s and more than any other species of seafood. (Canned tuna used to be No. 1.)  The trouble is, our appetites can’t be satisfied by wild-caught shrimp: Wild-shrimp stocks are fully fished or overexploited in much of the world. So aquaculture–shrimp farming–has stepped in to fill the gap.

This is good news for shrimp lovers. Restaurant chains like Darden’s Red Lobster promote Endless Shrimp® specials, and wholesalers sell imported shrimp for less than $4 a pound, NOAA reports. In poor countries like Vietnam, Thailand and Ecuador, shrimp farming has created tens of thousands of much-needed jobs as well as export income. But the impacts of  shrimp farming on the environment are serious. They range from the destruction of mangrove groves to the depletion of ocean stocks of small  forage fish that are caught and made into fish meal to feed the shrimp on farms.

Today, on the Yale Environment 360 website, I write about efforts to fix shrimp aquaculture. A nonprofit coalition called the Aquaculture Stewardship Council has developed standards for shrimp farms, as well as other forms of aquaculture, that are designed to guide buying decisions by big companies like Darden and Walmart as well as individual consumers.

Here’s how the story begins:

Carlos Perez, a well-to-do businessman, has been farming shrimp in Ecuador since 1979. He has seen the industry boom: Ecuador exported about $1.2 billion worth of shrimp last year, and its shrimp farmers employ about 102,000 people. He has also watched as shrimp farms have played a major role in the destruction of two-thirds of the country’s mangrove swamps — rich ecosystems that serve as buffers against storms, store carbon, and support fish, birds, and small mammals.

There’s got to be a better way, Perez says, and so he is working closely with a global alliance called the Aquaculture Stewardship Council to develop, test, and deploy new standards for shrimp aquaculture. The Aquaculture Stewardship Council, or ASC, hopes to do for fish farming what its sister organization, the Marine Stewardship Council, or MSC, has done for ocean fishing: Reward the most responsible producers. “It is the most demanding standard that has ever been produced for shrimp and fish,” Perez says.

But, as the story goes on to say, these efforts are complicated by existing aquaculture standards that are less stringent. You can read the rest of the story here.

One thing the story does not address is whether consumers can be persuaded to eat differently. Much journalism about food and the environment assumes that current consumption habits and patterns will continue; in particular, the assumption is that as another billion or two people enter the middle class, they will consume more meat and fish.

This need not be so, of course. Americans’ tastes are constantly shifting — away from canned tuna to shrimp, for example. They can shift again, ideally towards seafood that is lower on the food chain and therefore more sustainable. (Or better yet towards a plant-based diet.) Fast-growing fish that don’t require as much feed, or those that rely on vegetable-based feed in place of fish meal, have a lower environmental impact. The technical term for this is “feed fish efficiency ratio,” or FFER, and it’s much higher for salmon, say, than for shrimp. Some of the most innovative work going on in aquaculture focuses on species that are more sustainable, albeit not as popular as shrimp, salmon or tuna. Later this week I’ll report on plans for a mussels farm off the coast of California.

Meanwhile, in the UK, as Mallen Baker reports, supermarkets say that sales aof more sustainable fish, such as tilapia and pangasius, are growing. Retailers are promoting the alternatives, as are food writers. Maybe instead of promoting “endless shrimp” the folks at Red Lobster should be talking about endless mussels or tilapia.