Climate Week presented a two-front push for nations to take action on climate change. The moral case was emphatically made by a record-setting, 400,000-person march through Manhattan. What followed was a similarly unprecedented barrage from investor groups and corporations to convince world leaders that there's also a compelling economic case for taking steps against global warming.
The business presence last week was particularly striking because of its breadth and heft, and because of its extension well beyond the so-called "green bubble" that surrounds companies, investors and advocacy groups who embraced the cause long ago.
Signatories representing $26 trillion in investment funds called on world leaders to enact strong policies, cut fossil fuel subsidies and make polluters pay for the effects of their emissions. There were commitments and pledges from the likes of General Motors, food makers Mars Inc. and Nestle, and consumer products giant Unilever. And a string of corporate CEOs joined early-adopters like Ikea Group in supporting renewable energy and citing proof that companies and countries can tackle climate change and prosper at the same time.
"More and more businesses are coming forward and saying look, we can do this. We can cut energy use, we can become more efficient, and we can provide solutions—and this represents an enormous biz opportunity," said Paul Simpson, chief executive officer of London based CDP, a company that collects corporate climate change data on behalf of shareholders. "That's not a completely new message, but I think there are far more companies on board with saying it, and that's really a fundamental shift."
It took hundreds of millions of years for Earth's fossil fuel deposits to form, but mankind has burned much of it in just a couple centuries—in geologic terms, that amounts to an explosion of carbon emissions.
For as long as scientists and policymakers have been grappling with climate change, they've been up against two critical questions: How much extra carbon has mankind sent into the atmosphere? And how much more can be added before global warming becomes disastrous?
Climate researchers have spent decades tracking and quantifying the complex flows of carbon into and out of the atmosphere, but those questions couldn't be answered convincingly until 2009. That's when a group of European scientists published a groundbreaking and highly credible global carbon budget that filled the information void. Using a comprehensive climate model, the scientists determined the maximum amount of greenhouse gases mankind could send into the atmosphere without triggering catastrophe—and then found that more than a quarter of that budget had been spent by 2006.
A two-year-old number is changing the way governments, companies and investors approach the fight against climate change: $1 trillion.
That is roughly the amount of additional investment needed worldwide each year for the next 36 years to stave off the worst effects of global warming and keep the Earth habitable, according to the International Energy Agency. The Paris-based organization of 29 developed countries calculated the cost in 2012 and raised its estimates this year. Ceres, a Boston-based nonprofit investor group that advocates environmental sustainability, framed it as the "Clean Trillion" in an investment campaign that has become a rallying cry.
While $1 trillion sounds like a lot, knowing the figure is good news, according to climate activists, investment experts and United Nations organizers of the next round of global climate talks. Worldwide, almost $4 trillion a year will need to be invested over that time anyway in electric grids, power plants and energy efficiency, the IEA says. In a global economy of $75 trillion, $1 trillion works out to 1.3 percent of the world's annual output of goods and services, or about $140 a person. The calculation also focuses the discussion on investment—suggesting the potential for returns and profits—rather than on costs for disaster response and losses to rising oceans.
As tensions mount and U.S. lawmakers push for stiffer sanctions on Russia for its role in the Ukraine crisis, oil giant ExxonMobil wants no part of it.
On the contrary, America's second-largest public company recently deepened its ties to Russia and its vast energy deposits with a new natural gas export venture and by providing Russian President Vladimir Putin with enthusiastic—and very public—support.
The incongruity of Exxon's business-as-usual approach in Russia while U.S. officials talk of punishing Putin highlights a reality that politicians and the public tend to overlook: Corporate interests and the needs of the nation can—and do—sometimes diverge. Barring legal prohibitions, Exxon and other public companies are duty-bound to put shareholder interests first.
It's a reality that remains obscured as energy lobbyists and Congressional lawmakers campaign for sweeping policy shifts and controversial projects, such as construction of the Keystone XL oil import pipeline, fast-tracking natural gas export plants and removing limits on domestic oil exports.
Critics of environmentally risky oil projects proposed for deep undersea and Canada's tar sands got new ammunition last week when a report labeled those ventures and others as the industry's most financially questionable pursuits.
The new report, published by the Carbon Tracker Initiative (CTI), identifies a host of drawing-board oil projects that would cost a combined $91 billion over the next decade—and that would lose money if lower demand, carbon restrictions or other factors forced crude prices below $95 a barrel. Many of the projects need oil prices to settle substantially higher than $110 a barrel to break even, CTI said.
It's the latest in a string of offerings from London-based CTI, a non-profit that has been highlighting climate-related risks and costs that they believe are not being addressed by fossil fuel companies or reflected in financial markets. Through a pair of earlier reports, the group helped popularize the notion that fossil fuel companies could end up with valueless "unburnable carbon," or stranded assets, if governments move to limit global warming to 2 degrees Celsius.
By highlighting the financial risk of specific mega-projects in its latest work, CTI hopes to convince more Wall Street analysts and oil company investors to pressure ExxonMobil, BP, Shell and others to justify the expenses or cancel development.
The release last week of possibly improper emails between a utility and the California Public Utilities Commission has caused further damage to the credibility of the state's energy regulator and sparked a renewed push to oust the commission's powerful longtime president.
The mounting crisis of confidence at one of the nation's most influential state utility commissions comes as communities around the country are demanding more transparency and accountability from the regulators who oversee pipelines, oil and gas hydraulic fracturing wells and oil-filled trains.
Pressure on California's utility commission intensified last Monday, when the City of San Bruno—site of a horrific gas pipeline explosion that killed eight people in 2010—released emails and documents that appear to show illegal communications about the ongoing San Bruno case and a pattern of coziness with Pacific Gas & Electric, the utility responsible for the tragedy.
British Columbia's First Nations have fought the proposed Northern Gateway oil sands pipeline that would cross their land for years, and they have no intention of letting up just because the federal government recently approved it. They've ignored the wishes of Canadian Prime Minister Harper, shrugged off oil industry promises of local jobs, and rejected offers of part ownership in what could be a lucrative and long-lived project.
In short, they've been impervious to the kinds of political pressure and financial enticements that routinely succeed in smoothing the way for oil-related projects in the United States. How come?
A big part of the defiance comes from the Coastal First Nations, an alliance of aboriginal groups in British Columbia that has no interest in allowing diluted bitumen from Alberta's oil sands to pass through their territories or get shipped through their fishing grounds. The environment is too important to their culture, to their economy and to a succession of generations to come.
The Obama Administration's proposal Wednesday for making oil-laden railcars safer runs 203 pages and includes a host of new rules for carrying flammable fuels by train—but they come with caveats.
The most important caveat is that they're not final regulations, and it's not uncommon for proposed safety requirements to get weakened and postponed following objections from the industries involved.
What comes next is a 60-day period for accepting comments from the public and the various industries that will be affected by the Department of Transportation's proposed rules. Then the government has to issue the final versions and give the industries time to comply. It could take more than three years to fully halt the shipment of the most flammable liquids in the most dangerous railcars.
The government's "comprehensive rulemaking proposal" also leaves two critical elements unsettled. The DOT offers three different safety standards for making new oil railcars stronger—and asks for public comments on which one should prevail. The agency also offers several variations on rail speed limits, leaving that issue unresolved.
Germany leads the world in harnessing the benefits of energy efficiency, followed by Italy, the European Union, China and France, according to a new ranking of the world's 16 largest economies. The United States was near the bottom, placing 13th.