America the Possible

I recently read Gus Speth's new book, America the Possible: Manifesto for a New Economy. It's a good, fresh read on where we are in terms of achieving sustainability -- the massive challenges that remain, and the kinds of transformations that are needed to get there.

Many in the sustainability field will recognize the references and concepts explored, but I certainly picked up some new insights, as well as new authors, books, organizations to check out. The explicit focus on the US and the current challenges give the book strong direction. After running through the big challenges (with good coverage of the social dimensions of sustainability, not just environmental) and the possible solutions, Speth lays out the transformations that need to take place to achieve sustainability - transforming communities, corporations, consumption, measurements of well-being, finance and foreign affairs.

Like his previous book, The Bridge at the End of the World, this one calls for dramatic changes to our economic system and ways of thinking. It wrestles with how to get ourselves out of the growth trap, so we can increasing value and well-being without constantly needing to produce and consume more energy and materials. It also spends quite a bit of time on important technical changes that need to be made to the economy, like better ways of measuring success than GDP. As the subtitle suggests, much of the book is focused on creating the new economy, which I think is probably the most critical leverage point for achieving sustainability.

But Speth recognizes that these types of changes to the economic system, will require deep social and political change. The book wraps up with chapters on realizing democracy (from campaign finance reform to increasing participation in voting and other aspects of civic life); and the need for a more coordinated, broad movement, where groups historically focused on specific issues (e.g. 'environment' or 'tax reform' or 'equity' or 'trade') align efforts to create a prosperous sustainable future. Addressing the need for these changes up front, he states early on: "the prospects for systemic change will depend mightily on the health of our democracy and the power of the social and political movement that is built." 

He notes (as many have, particularly in the past few years), that "we environmentalists have been too wonkish and too focused on technical fixes. We have not developed the capacity to speak in a language that aims straight at the American heart, resonates with both core moral values and common aspirations, and projects a positive and compelling vision... Now we need to hear more from the preachers, the poets, the psychologies, and the philosophers." 

A strategic approach to sustainability is built around building compelling visions, and the belief that a positive "pull" towards something desirable is more effective in making big changes over the long term than negative "push" away from something scary or bad.

All in all, well worth the read. I recommend checking it out.

Stay going.

Divestment 3: Hip Hop & Push Back

I bumped into the endowment manager of a small liberal arts college at a holiday party. I asked about the practical concerns some have expressed about the feasibility of divesting from fossil fuels, when endowments allocate assets to various management funds who invest in co-mingled funds, and the like. His response was straightforward: "no problem, I could get us out of fossil fuels next week, and if the investment committee tells me to do it, I will, doesn't matter to me."

I'm not sure if that perspective would be universal among endowments managers, but it may put that aspect of the conversation to bed.

Although I'm not sure that's good news for the divestment movement.  The more I look at this, the more convinced I become that the best thing for the goals of the campaign would be if most endowments continue to refuse to divest.

As this post by Carol Pierson points out, negative SRI screens have had little impact on curbing things like guns and tobacco over their long history. As I pointed out in this previous post, it's unlikely that if all endowments sold their fossil fuel stocks, the markets or fossil fuel companies would notice.

What fossil fuel companies, the markets, and the general public will likely notice is millions of students raising hell. And if endowments continue to stand their ground, that could happen. The campaign has now spread to 192 campuses.

The divestment movement also got a boost from skeptics with a WSJ opinion piece by Robert Bryce (subscription required). Divestment proponents were quick to point out Bryce's financial ties to the fossil fuel industry and provide rebuttals to his argument.

Fox News also acknowledged the campaign (and tried to dismiss it as childish).

The campaign is also getting wisely leveraging the arts to get people involved -- too often sustainability efforts focus on science, dire warnings, and restricting behavior.  I'm convinced the only way to really engage people in leading the kinds of changes needed to create a sustainable society is through the arts. Here's one example with the official divestment music video:

Stay going.
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ARTSTRIKE: Don't know how we'll make it

Today is ARTSTRIKE -- an effort spearheaded by Rebuild the Dream which describes it this way:

We're using culture as a tool to change people's hearts and minds, in a way that only art can.

Artstrike aims to "expose" the fiscal cliff, as a "fiscal bluff" and using it to highlight the growing, and dangerous levels of inequality in America today.

Systematically increasing levels of inequality undermine the strength of our social fabric, and undermine people's capacity to meet their needs. That's unsustainable, and is bad for all of us, rich or poor.

Art and culture are great ways -- maybe the only ways -- to bring about the kinds of transformational cultural shifts needed to lead a peaceful and relatively smooth shift to sustainability.

Here's a video of one of today's art works that I thought was particularly powerful:


Stay going.
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Divestment 2: Does the Math Add Up?

As I noted in my first divestment post, the “climate math” behind the divestment movement stems from the Carbon Tracker Initiative’s report “Unburnable Carbon” (pdf).

The report contends that our “carbon budget” between now and 2050 – if we want to avoid a rise in average global temperatures of more than 2 degrees C (which would bring tremendous damage and human suffering to our global human society) – is 565 gigatons of carbon dioxide.  The total known reserves of coal, oil, and gas represent a carbon potential (if burned) of 2,795 gigatons, which means that about 80% of the known reserves are “unburnable” if we are to avoid a really nasty climate for us, our children, and grandchildren.

The report points out that fossil fuel companies account for reserves as assets, and analysts and investors determine the value of those companies based on these assets. If 80% of these assets are unburnable (and therefore worthless) these valuations are way off.  Further, because these companies represent such a large portion of economy and the financial markets, this valuation error represents a major systemic risk for the global financial systems.

One of the co-founders of the Carbon Tracker Initiative, recently published an article, “Why the ‘Do the Math’ Tour Doesn’t Add Up” on GreenBiz questioning the value and effectiveness of divestment as a response to this dilemma.

In the article Cary Krosinsky points out that “there is a severe systemic problem,” and that instead of pointing figures we should be rolling up our sleeves and figure out “what we should really be doing.” I always tend to prefer good faith, solutions-based approaches, and couldn’t agree more that this is a systemic problem, and that one divestment campaign is going to solve it.

But I think the intent behind the divestment movement is to highlight that good faith efforts haven’t (yet) been effective enough, fast enough.  And it is one piece in a larger effort – apartheid didn’t end only because of divestment, it was one part of a much longer, sustained effort that included a lot of hardship and sacrifice by countless advocates, undertaking many strategies.

Krosinsky also questions why oil services companies aren’t being targeted for divestment, but the Fossil Free campaign is pretty clear on this, stating: “There are many more companies that contribute indirectly to climate change–the multinationals that build drilling equipment, lay oil pipelines, transport coal, and utilities that buy and trade electricity. But right now, we need to be laser-focused on keeping all that coal, gas and oil in the ground, and these 200 companies are the ones that own the vast majority of those reserves.”

I think the more relevant question around if the divestment math adds up, relates to the impact divestment will actually have on the financials and activities of fossil fuel companies. Everyone I’ve talked to in the financial sector seems to agree that the impact on stock prices won’t likely be that significant.

The VP for Investments at Bowdoin supported this view, summarizing in this recent article what was my initial reaction to the divestment movement: “Markets are efficient and it is unclear if one group of investors decides to boycott a specific sector that there is any meaningful result… Other investors will step in and buy cheaper securities.”

There’s an estimated $400 billion in college endowments in the US. At Middlebury, 3.6% of the endowment is invested in fossil fuels. I have no idea if this is indicative of other endowments, but let’s assume for a minute it is, and be generous in assuming 5% of total endowment dollars are invested in fossil fuels – about $20 billion dollars. Exxon Mobil alone has a market cap of $404 billion. On average, more than 13 million shares are traded every day – that’s over $1 billion worth of shares per day at current stock price, for just one of the 200 companies targeted.

It seems like if all the endowments in the country sold all fossil fuel stocks, there’s a good chance that the markets and companies would barely notice, much less leave 80% of their reserves in the ground as a result.

But again, it seems to me that the divestment movement is realistic about this, and recognizes that its power is in highlighting the fact that climate change is a moral issue.

Harvard students summed up this idea well in this recent Crimson article: “Divestment may not pose an immediate threat to the annual turnover of the biggest companies, yet it does help to undermine the social and political capital of a powerful industry. More than anything, divestment is a moral statement.”

Do you think this will help the general public recognize that climate change driven by extracting and burning fossil fuels is an urgent, moral human rights issue?

Stay going.

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Divestment 1: Intro to the Fossil Fuel Divestment Movement

Over the past year or so, various efforts from coalitions of NGOs and student groups have emerged calling on college and university endowments (and other institutional investors) to divest from fossil fuel companies.

I’m planning on writing a series of short posts on these efforts and the many interesting questions, challenges, and conversations they raise.

This first post is just an overview (the NYT also just ran this article summarizing this emerging movement):

There are two major related, but distinct efforts:

·      Coal Divestment: launched in 2011, supported by a coalition of 11 groups.¹

o   Calls on college endowments to divest from coal with a focus on 15 specific companies.

o   Active campaigns on approximately 20-25 campuses. 

o   See the Coal Divestment Toolkit (pdf) for details.

·      Fossil Fuel Divestment: launched in 2012, supported by a coalition of 7 groups.²

o   Calls for college endowments (and others) to “immediately freeze any new investment in fossil fuel companies, and divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years.”

o   Focus on the top 200 coal and oil and gas companies, as measured by their reserves

o   Based on the premise that to avoid an increase of global average temperatures of more than 2°C, humanity cannot release more than 565 gigatons of carbon dioxide before 2050, which is about 20% of the carbon potential in known fossil fuel reserves (2,795 gigatons) — rendering 80% of known reserves “unburnable”

o   Currently, these reserves are treated as assets for the entities that control them.  If 80% are unburnable, the valuations of fossil fuel companies are currently misrepresented. This poses potential risks to individual investors, as well as systemic risk to the financial markets as a whole.

o   These numbers are stem from this report (pdf) from the Carbon Tracker Initiative (and are also the basis of Bill McKibben’s Rolling Stone article last summer and 350.org’s just-completed “Do the Math” tour)

o   For more details see 350.org’s Fossil Free website: http://gofossilfree.org

Key considerations:

·      There is an estimated $400 billion under management at college and university endowments.

·      The net impact of divestment on stock prices and companies’ capitalization is unclear; only a portion of investments are in public markets, and only a portion of those are in fossil fuel companies.

·      These efforts recognize that highly profitable fossil fuel companies are not likely to stop extracting fossil fuels as a result of this effort, but contend that drawing attention to this issue will highlight the moral implications as well as financial, social and environmental risks of fossil fuel investment. 

·      There is evidence that proposed alternatives (such as socially responsible investment funds, fossil fuel free funds, and on campus revolving loan funds to support energy efficiency and renewable energy projects) can generate competitive returns.

So far two small colleges have gotten on board the divestment train: Unity College in ME and Hampshire College in MA. The students at Harvard passed a referendum with 72% in support of divestment.

So, there you have the basics of the fossil fuel divestment movements that are sweeping the nation. Subsequent posts will look at questions like: 

• What impact will divestment have? Will it affect the financial health of fossil fuel companies? Will it influence their investments in extraction vs. alternative energy sources? 
• Is the real leverage of divestment in the financial impact, or the awareness impact of shining the spotlight on the risks of fossil fuel dependence? (Does that matter?) 
• What impact might these efforts have on the policies of the investment funds that serve endowments? What about on the energy analysts at the big banks? 
• How does natural gas as a potential transition fuel factor into all of this? 
• What’s the end game of divestment? 
• What could fossil fuel companies do to deter divestment? Shut their doors? Shift a certain percentage of R&D from exploration into renewables? 
• What impacts might divestment have on endowment performance? What are the alternatives and how does their performance compare? 
• What should Trustees be considering in light of these demands? 
• And more… 

I’m intending this series to be a true exploration of very complex issues, probably with more questions than answers, and likely with my own opinions and thoughts shifting and evolving through the process.

I hope it will spark some generative dialogue, and I hope you will share your thoughts, opinions, resources, and questions liberally.  And, please let me know if I’ve gotten any of the facts wrong about these efforts, and I will make the necessary corrections.

Stay tuned… and Stay going.

[1] As You Sow; California Student Sustainability Coalition; Coal Swarm; Energy Action Coalition; Green Corps; IB5k; Responsible Endowments Coalition; Sierra Club; Sierra Student Coalition; Sustainable Endowments Institute

2 350.org; As You Sow; Better Future Project; California Student Sustainability Coalition; Energy Action Coalition; Responsible Endowments Coalition; Sierra Student Coalition; Campus Student Groups (as of Nov. 19 there were 39 campuses listed on 350.org’s Fossil Free website: http://gofossilfree.org/campus/)

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The Mountain School: Our Place

Check out this great promo video for The Mountain School -- and pass it on to any high school sophomores you might know...


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Education for the New Normal

NASA Satellite Image (NASA/Getty Images)

If there’s a silver lining to be found on the massive cloud that covered the better part of the eastern US last month, it’s this: people are talking seriously about real risks of climate change. 

From provocative headlines (“It’s Global Warming, Stupid”, Bloomberg Businessweek) to carefully selecting language and asking the right questions (“On Hurricanes…”, Dot Earth) — people are talking about climate change in ways we haven’t seen before.

For whatever reasons, Katrina, Ike, Snowpocalypse, Irene, the wildfires, the droughts, the warmest month on record — and the many other extreme weather events of recent years — failed to get people to really connect the dots between extreme weather and climate change.   

Thoughtful experts are having important conversations about whether climate change caused Sandy, or strengthened Sandy, or made Sandy more likely, or had anything to do with Sandy. But everyone seems to finally agree that we need to be prepared for more extreme events like Sandy. 

I believe the “super storm” — with its implications for presidential politics — will serve to condense the disparate events of recent years into a popular awareness that we are in a “New Normal” regarding the climate. The images of submerged New Jersey neighborhoods, exploding power plants, vehicles floating down Manhattan avenues will change our country’s collective consciousness for good.  Rising oceans will no longer be punch lines.

As we assess the damage to people in our communities, our infrastructure, and our economy, we will have the opportunity to reassess how we prepare for the impacts of climate change.  Whose responsibility is it to make sure we’re ready? Most probably think government, community groups, and maybe business should take this on.

But leadership from another sector — higher education — is also critical.

We know the importance of emergency preparedness: anticipating the risks, alerting people, and evacuating vulnerable areas. We know we need comprehensive and effective response plans. We will need to put up seawalls, restore natural barriers, and simply abandon certain parts of the coast.  This recent TED talk by Vicki Arroyo, Executive Director of the Georgetown Climate Center, provides a good overview of these and other climate adaptation strategies.

We also need to make some more fundamental shifts in how we design our communities, generate energy, produce and transport goods, and generally go about meeting our needs.

Colleges and universities have a unique responsibility in preparing society for this New Normal.  In many ways, they are already fulfilling that role, particularly when it comes to reducing climate change pollution. More than 660 colleges are actively participating in the American College & University Presidents’ Climate Commitment (ACUPCC). They are publicly reporting progress on climate action plans; providing education, research, and community engagement on climate; and pursuing net-zero greenhouse gas emissions from campus operations. Together they represent over 6 million students, offer 10,000 sustainability-related courses, and have avoided 1.6 million tons of carbon dioxide equivalent (reducing emissions 25% on average) in the past five years. 

With regard to climate adaptation, much of the research that helps us understand climate change impacts, and strategies for dealing with them, comes from our country’s universities.  There are early signs that climate preparedness is making its way into the classroom, and some instances of campus-community collaboration around implementing adaptation strategies.

Last year, I facilitated a group of higher education leaders, scientists, and sustainability experts, in developing Higher Education’s Role in Adapting to a Changing Climate.  The report provides an overview of trends in the sector and some exciting examples of what’s happening individual campuses.  But the group concluded that higher education institutions “as a whole, have not focused on adaptation sufficiently to date.”

In addition to more research, colleges and universities have opportunities to experiment and role-model solutions on their campuses, and partner with local communities to implement successful strategies more broadly.  Perhaps most importantly, they have the opportunity — and responsibility ­— to ensure that all graduates, from all disciplines, understand the climate challenge and are prepared to lead society through it.

Weather they become politicians or office administrators, architects or CEOs, artists or engineers; all citizens need to understand our new climate. And they must be prepared to minimize the drivers of further climate change, while creating safer communities and more resilient economies.

Stay going. 
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