Category: Economics

Matters of money

Divestment campaign successes

From an excellent Rolling Stone article by Bill McKibben:

We even had some early victories. Three colleges – Unity in Maine, Hampshire in Massachusetts and Sterling College in Vermont – purged their portfolios of fossil fuel stocks. Three days before Christmas, Seattle mayor Mike McGinn announced city funds would no longer be invested in fossil fuel companies, and asked the heads of the city’s pension fund to follow his lead. Citing the rising sea levels that threatened city’s neighborhoods, he said, “I believe that Seattle ought to discourage these companies from extracting that fossil fuel, and divesting the pension fund from these companies is one way we can do that.”

Toronto350.org is looking for volunteers to help run our divestment campaign.

Climate and the second Obama administration

From Barack Obama’s second inaugural address:

We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries — we must claim its promise. That is how we will maintain our economic vitality and our national treasure — our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.

We will see what kind of action the second term brings.

Previously:

Lisa Jackson and Keystone XL

U.S Environmental Protection Agency (EPA) administrator Lisa Jackson is leaving the Obama cabinet, apparently at least partly because of her opposition to the Keystone XL pipeline.

It’s worrisome that this one effort at controlling the growing North American fossil fuel industry – by blocking Keystone XL – has produced so much opposition. Meanwhile, there has been huge expansion in unconventional oil and gas production, including both fracking and the continued growth of the oil sands.

What we are doing now, continuing to invest the lion’s share in fossil fuel energy, is both environmentally destructive and economically wasteful. This infrastructure just isn’t compatible with what we are going to need in the future, once we finally start taking climate change seriously. Once we eventually find ourselves shutting down coal, oil, and gas infrastructure only partway into its economic lifetime we won’t be asking why Keystone XL was not approved, but why so many other misguided projects got built during these years.

Climate change and democratic legitimacy

I have finished my final assignment for the term, the essay for my Global Environmental Politics course. It is about climate change and democratic legitimacy:

Many of these ideas are likely to find their way into my PhD thesis, so I would definitely appreciate feedback.

American unconventional oil and the economic viability of the oil sands

Hydraulic fracturing (“fracking”) of tight and shale oil in the United States may be the biggest economic force determining the future of Canada’s bitumen sands. The Globe and Mail recently printed an interesting article on how the development of unconventional oil in the United States could undermine the business model of the oil sands: “a belief in unfettered access to an insatiably oil-hungry U.S. market has been a central underlying assumption of the great energy expansion under way in Alberta.” If the U.S. can satisfy domestic oil demand with their own unconventional sources, the huge investment that has been made in Canada’s oil sands may never produce a reasonable economic return.

This is one more risk that should be borne in mind when making energy investment decisions. Unfortunately, the climate system doesn’t care about the source of greenhouse gas emissions. America’s newfound bounty of unconventional oil and gas will probably make it even harder to avoid catastrophic climate change.

Related:

IEA: We can only burn 1/3 of the remaining fossil fuel

The International Energy Agency is now mirroring the claim made by Bill McKibben, James Hansen, and others: we cannot burn all the world’s fossil fuels. In their World Energy Outlook 2012, they claim:

“No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal, unless carbon capture and storage (CCS) technology is widely deployed”

Carbon capture and storage is arguably more of a rhetorical device which allows companies and governments to assume fossil fuel use than a real technology capable of reducing emissions. As such, it seems fair to say that we face a stark choice between dangerous climate change and abandoning fossil fuels.

Given that the value of fossil fuel companies is based on the assumption that they will be able to dig up and sell all the reserves they own, now might be an especially appropriate time to start divesting from fossil fuels.