Michael Keller's articles

Financiers and venture capitalists are joining California environmentalists in an unlikely alliance ahead of a major climate change referendum on November’s ballot. The dispute is a new phase in the climate change fight that is increasingly being framed as old economy versus new, and may forecast what lies ahead.

Proposition 23 is a referendum that seeks to indefinitely halt AB 32, California’s Global Warming Solutions Act of 2006, which is aimed at slashing greenhouse gas emissions, until unemployment levels drop to 5.5 percent for four successive quarters.

Not surprisingly, the Sierra Club, the NRDC, CREDO Action and the Environmental Defense Fund, among other green groups, are opposing Prop. 23. What’s new is that they’ve been joined by major investors and speculators drawn by a market in clean technologies and alternative energies that has grown into its adolescence. They’re using the power of market instruments to back environmental change—whether that’s their intention or not.

Within the first two weeks of April’s Deepwater Horizon oil disaster, $36 billion of BP's market capitalization evaporated when its stock took a plunge into the deep. Investors were jolted by the unfolding catastrophe, uncertain about when and how the oil, and the financial damage, could be capped.

The same kind of catastrophic failure is a risk for a number of BP’s competitors, an industry research firm said this week, as it unveiled assessments of the world’s oil and gas companies and their exposure to risks that are only now becoming part of prudent investment decisions.

“We think BP is not an outlier—it’s a systemic issue,” said Yulia Reuter, the head of oil and gas research at MSCI. “All of these companies are taking on more risk to recover oil from the frontier and delivering it to market. What it comes down to is who are the best companies who can mitigate that risk.”

The firm found that many of the traditional international players fell to the bottom of their ratings list. Chevron, BP, Occidental, Exxon Mobil, Petrochina and Murphy Oil all scored poorly in the analysis.

International financial services heavyweight Deutsche Bank has taken aim at climate change skepticism in a just-released report that catalogs and counters the arguments denying man-made global warming.

The report, titled Climate Change: Addressing the Major Skeptic Arguments, was commissioned by the bank and written by scientists at Columbia University’s Earth Institute.

It lists 12 common claims used to argue against global warming and refutes each of them, pointing readers to corroborating sources. Its point is definitive.

“The paper’s clear conclusion is that the primary claims of the skeptics do not undermine the assertion that human-made climate change is already happening and is a serious long-term threat,” wrote Mark Fulton, the bank’s head of climate change research. 

Deutsche Bank is one of the most deeply invested financial institutions in the world in climate change, with more than $5 billion being managed in climate-related funds.