global-warming

Freakonomics Guys Flunk Science of Climate Change: Eric Pooley

October 20, 2009

Commentary by Eric Pooley Oct. 20 (Bloomberg) — Steven D. Levitt and Stephen J. Dubner are so good at tweaking conventional wisdom that their first book, “ Freakonomics ,” sold 4 million copies. So when Dubner, an old friend, told me their new book would take on climate change, I was rooting for a breakthrough idea. No such luck. In “ SuperFreakonomics ,” their brave new climate thinking turns out to be the same pile of misinformation the skeptic crowd has been peddling for years. “Obviously, provocation is not last on the list of things we’re trying to do,” Dubner told me the other day. This time, the urge to provoke has driven him and Levitt off the rails and into a contrarian ditch. Their breezy take on global warming unleashed a barrage of highly detailed criticism from economists and climate experts , including a scientist who is misrepresented in the book. Dubner wonders why everyone is so angry. In part, it’s because the book’s blithe remedies — “We could end this debate and be done with it, and move on to problems that are harder to solve,” Levitt told the U.K. Guardian newspaper — are an insult to the thousands of scientists who have devoted their careers to this crisis. One of the injured parties is Ken Caldeira , a climate scientist at Stanford University who is quoted (accurately) as saying that “we are being incredibly foolish emitting carbon dioxide.” Then Dubner and Levitt add this astonishing claim: “His research tells him that carbon dioxide is not the right villain in this fight.” Provocative, Untrue That’s provocative, but alas, it isn’t true. Caldeira, like the vast majority of climate scientists, believes cutting carbon dioxide and other greenhouse-gas emissions is our only real chance to avoid runaway climate change. “Carbon dioxide is the right villain,” Caldeira wrote on his Web site in reply. He told Joe Romm , the respected climate blogger who broke the story , that he had objected to the “wrong villain” line but Dubner and Levitt didn’t correct it; instead, they added the “incredibly foolish” quote, a half step in the right direction. Caldeira gave the same account to me. Levitt and Dubner do say that the book “overstates” Caldeira’s position. That’s a weasel word: The book claims the opposite of what Caldeira believes. Caldeira told me the book contains “many errors” in addition to the “major error” of misstating his scientific opinion on carbon dioxide’s role. Why does this matter? Because there’s a titanic battle going on over whether and how to reduce carbon emissions, and this soon-to-be bestseller tries to convince people that we don’t need to do so. Dubner and Levitt trumpet their “wrong villain” line in their table of contents and promotional material . On National Public Radio the other day, Levitt said , “The real problem isn’t that there’s too much carbon in the air.” Multiple Villains “SuperFreakonomics” never identifies the “right villain,” so I called Dubner and asked. “I don’t think anybody knows for sure,” he told me. Then he acknowledged that the chapter’s most newsworthy claim “could have been better phrased, as ‘carbon dioxide is not the only villain.’” That’s a huge admission. No climate scientist believes carbon dioxide is the only villain: methane, nitrous oxide and other gases need to be reduced too. But that basic truth wouldn’t have drawn attention. It wouldn’t have given Levitt a bold contrarian line for NPR. Dubner and Levitt acknowledge that the planet has warmed but pretend that cutting emissions is a hopelessly old-school response. “It’s not that we don’t know how to stop polluting the atmosphere,” they write. “We don’t want to stop.” They ignore the fact that U.S. emissions have dropped 9 percent since 2007 — not just because of the recession but also thanks to energy efficiency and cleaner fuels. Chance of Catastrophe They exaggerate the cost of climate action and underestimate the likelihood of runaway global warming, pretending that the “relatively small chance of worldwide catastrophe” isn’t worth getting bothered about. They dismiss global warming as a “religion” and rehash the so-called “global cooling” scare of the 1970s, a favorite skeptic myth . (A handful of scientists warned of a coming ice age, a false alarm in no way comparable to today’s scientific consensus on warming.) They trumpet the “little-discussed fact” that the average global temperature has decreased in recent years. This is accurate according to one set of global data — the other shows an increase — but scientists say it proves nothing. Imagine the Dow climbing to 14,000, with a wobble to 13,950. That’s what global temperatures have done. Even with small fluctuations, this decade is by every measure the hottest in recorded history. The second hottest is the 1990s. The third hottest is the 1980s. Get the picture? Levitt and Dubner don’t. Shooting Sulfur Dioxide Having downplayed the problem, they try to solve it with a set of silver-bullet technologies known as geoengineering. One would shoot millions of tons of sulfur dioxide 18 miles into the air to artificially cool the planet. This could work; it also could have dire unintended consequences. Caldeira, who is researching the idea, argues that it can succeed only if we first reduce emissions. Otherwise, he says, geoengineering can’t begin to cope with the collateral damage, such as acidic oceans killing off shellfish. Levitt and Dubner ignore his view and champion his work as a permanent substitute for emissions cuts. When I told Dubner that Caldeira doesn’t believe geoengineering can work without cutting emissions, he was baffled. “I don’t understand how that could be,” he said. In other words, the Freakonomics guys just flunked climate science. ( Eric Pooley , a former managing editor of Fortune magazine who is writing a book about the politics of global warming, is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Eric Pooley at epooley2@bloomberg.net

Read the full article →

Eliot Spitzer: Chamber Of Commerce Must Be Stopped

October 14, 2009

The U.S. Chamber of Commerce–the self-proclaimed voice of business in Washington–has been wrong on virtually every major public-policy issue of the past decade: financial deregulation, tax and fiscal policy, global warming and environmental enforcement, consumer protection, health care reform …

Read the full article →

Another Company May Leave Chamber of Commerce Over Extreme Position On Climate Change

October 13, 2009

The holding company owned by multi-billionaire Ronald Perelman is debating whether to leave the U.S. Chamber of Commerce, the Huffington Post has learned. Driving the debate is the controversial stance taken by the country’s biggest business lobby on climate change. Executives at MacAndrews & Forbes Holdings , which owns significant stakes in a range of companies, most notably cosmetics maker Revlon , have been holding internal discussions on whether to pull out of the chamber over its recent challenge to the Clean Air Act. Should McAndrews & Forbes withdraw from the powerful business lobby, it would be the latest in a string of high-profile defections . Household names like Apple and Nike have left the organization in protest, as have Pacific Gas & Electric and Exelon — the nation’s largest power company. The moves were in response to an August court petition filed by the chamber demanding that the Environmental Protection Agency subject itself to an open debate over whether credible scientific evidence exists that global warming endangers public health. For the vast majority of scientists and experts, it’s a foregone conclusion . The fallout has been significant, and swift. MacAndrews & Forbes may soon join the likes of Nike and Apple. A spokeswoman said no decision has been made, but that one is expected soon. “There have been internal discussions about making our position known, meaning that we would like the chamber to have a different point of view,” said spokeswoman Christine M. Taylor. The chamber’s position on climate change “is a concern of ours,” she said. “We want to be on the right side. We’re supporters of clean energy, environmental protection — Ronald [Perelman] is involved with the NRDC [Natural Resources Defense Council, an environmental group]. We want to state our position,” Taylor said. Perelman, whose net worth is estimated at $10 billion, is the 23rd-richest American , according to Forbes magazine. A call to the chamber was not returned.

Read the full article →

Ostrom, Williamson of U.S. Win Nobel Economics Prize

October 12, 2009

By Janina Pfalzer and Rich Miller Oct. 12 (Bloomberg) — Indiana University professor Elinor Ostrom became the first woman to win the Nobel Economics Prize when she received it with Oliver Williamson of the University of California at Berkeley for research into how organizations work. Ostrom, in work that links the economy with the environment, has shown that informal groups can sometimes manage natural resources such as forests or lakes better than the government or companies. Her doctorate is in political science rather than economics. Williamson is considered one of the founders of organizational economics — the study of how institutions are created and developed and what impact they have on economic growth. In research that may have applications to the financial crisis, he suggested that it is better to regulate large companies than to try to break them up or limit their size. “Over the last three decades these seminal contributions have advanced economic governance research from the fringe to the forefront of scientific attention,” the Royal Swedish Academy of Sciences said today in Stockholm. Ostrom and Williamson will share 10 million Swedish kronor ($1.4 million) in prize money. “What you have here is a bow from the academy to those economists who study organization from the inside and that’s an exciting, interesting field,” said Robert Solow , winner of the Nobel Economics Prize in 1987 and professor emeritus at the Massachusetts Institute of Technology. Large Companies Williamson found that large corporations exist primarily because they are efficient and benefit owners, workers, suppliers and customers, the academy said. They can abuse their power and need to be regulated. “You could and should interpret Ollie Williamson’s work as a way of getting into the question of how the large investment banks operate and how that led to what looks in retrospect to be very stupid and risky behavior,” Solow said. President Barack Obama has proposed the most sweeping changes to financial regulations in 75 years, tightening oversight of big banks without overtly limiting their size. Williamson’s work also helps highlight the conditions under which it is more efficient for companies to outsource tasks than perform them internally. Williamson “has done a lot for companies to better understand when it’s best to purchase goods and services from the outside versus produce them in-house,” Richard Friberg, professor of economics at the Stockholm School of Economics, said in an e-mailed comment. “Williamson’s work has been influential as it’s often taught in higher finance classes.” Power Deregulation Williamson, who served as special economic assistant to the antitrust division of the U.S. Justice Department from 1966 to 1967, has described his analyses as a blending of the extremes of social science and abstract economic theory. His research has been credited with influencing everything from the shape of electricity deregulation in California to human resource management at technology companies. A native of Wisconsin, Williamson received a bachelor’s degree in science from the Massachusetts Institute of Technology in 1955, a master’s in business administration from Stanford University in 1960 and a doctorate in economics from Carnegie- Mellon University in 1963. The 77-year-old joined the University of California as a professor in 1988 and is now a professor emeritus there. Ostrom , who was born in 1933 and calls herself a political economist, told reporters by telephone at a press meeting in Stockholm that her work should encourage citizens that they have a “capacity and power” beyond the bureaucracies that govern them. Climate Change In the case of global warming, while it is important to have an international agreement, “we can be taking steps at a family level, a community level, a regional level,” she said. “This confirms the link between the economy and the environment,” said Susanne Sweet, Associate Professor of marketing and strategy at the Stockholm School of Economics . “Plus she’s the first woman to get the prize. It’s very exciting.” Ostrom got her doctorate from the University of California, Los Angeles in 1965. She then moved on to the Department of Government at Indiana University. She joined the ranks of professors of political science in 1974 and held the presidency of the American Political Science Association in 1996 and 1997. “My first reaction was a great surprise and appreciation,” Ostrom said. “There are many people who have struggled mightily and to be chosen for this prize is a great honor.” ‘Long-Shot’ Winners Ladbrokes Plc spokesman Joakim Roenngren said the betting firm paid 51 times the money on Ostrom and 21 times bets on Williamson. “We did have some action on Williamson, but almost no bets on Ostrom,” he said. “You can definitely say that they are both long-shot winners.” Alfred Nobel , the Swede who invented dynamite, established awards for achievements in physics, chemistry, medicine, peace and literature in his will in 1896. The economics prize was set up by Sweden’s central bank in 1968. Past winners include Milton Friedman , Amartya Sen and James Tobin . The award’s official name is “The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.” The money, a gold medal and a diploma will be handed out at a ceremony in Stockholm on Dec. 10, the anniversary of Nobel’s death. The economics prize last year was awarded to Paul Krugman , a professor at Princeton University and a columnist for The New York Times, for his theories on world trade. From 1969 to 2008, the Nobel Prize for economics was awarded to 42 Americans, eight Britons, three Norwegians and two Swedes. Economists from Germany, France, the Netherlands, India, Israel, Canada and the former Soviet Union each won once. To contact the reporters on this story: Janina Pfalzer in Stockholm at jpfalzer@bloomberg.net . To contact the reporter on this story: Rich Miller in Washington rmiller28@bloomberg.net

Read the full article →

Soros to Invest $1 Billion in Clean-Energy Technology to Help Ease Warming

October 10, 2009

By Sylvia Wier Oct. 10 (Bloomberg) — Billionaire George Soros will invest $1 billion in clean-energy technology, he said today. Soros, speaking in Copenhagen, said he has “the ability to put money to work.” It will involve the establishment of a new climate policy institute. “The problem of global warming is primarily a political problem at this point,” he said in an e-mailed message. Soros made the announcement at the annual meeting of Project Syndicate, an international association made up of 430 newspapers in 150 countries.

Read the full article →

Monsanto Forecasts African Farmers Will Increase Planting of Biotech Crops

October 9, 2009

By Aya Takada Oct. 9 (Bloomberg) — Monsanto Co. , the world’s biggest seed producer, expects African countries to increase planting of genetically-modified crops to boost food security and economic development as the region is affected by climate change. Burkina Faso plans to double the area planted with the company’s insect-resistant cotton next year from 129,000 hectares (318,766 acres) this year, Natalie DiNicola, director at Monsanto’s public policy and sustainable yield division, said in an interview yesterday. Corn modified to tolerate drought may be introduced to the sub-Saharan region by 2017, she said. Farming in developing countries needs $83 billion of annual investment for production to feed the world in 2050, the United Nations’ Food and Agriculture Organization said in a paper this week. Monsanto is introducing new modified seeds to boost yields as part of a plan to double gross profit from 2007 to 2012. Africa is affected by climate change as more than 95 percent of sub-Sahara cropland is rain-fed, DiNicola said in Tokyo. “Genetic modification technology will be increasingly accepted by developing countries as they face the problem of how to feed rapidly growing populations,” said Takaki Shigemoto , a commodity analyst at research and investment company TOS in Tokyo. “Crops modified to produce better yields under limited water supply will be attractive to them.” Developing countries may experience a drop of between 9 and 21 percent in overall potential agricultural productivity as a result of global warming, the FAO said in a Sept. 30 report . Poorest regions with the highest levels of chronic hunger are likely to be among the worst affected by climate change, according to the report. Crop Planting Africa is the only continent where per-capita food output is falling, as a lack of investment and technology curbs yields, DiNicola said. St. Louis-based Monsanto is the largest producer of GMO crop varieties. Area planted with GMO crops, including corn, soybeans and cotton, topped 1.8 million hectares in Africa last year as Egypt and Burkina Faso began production of modified corn and cotton respectively, according to the International Service for the Acquisition of Agri-Biotech Applications . In the western African country, less than 50,000 hectares were planted with modified cotton in 2008, the industry group estimates . Area planted with GMO cotton rose by more than 158 percent this year, covering about 25 percent of Burkina Faso’s cotton acreage, as the biotechnology is forecast to boost yield by 35 to 45 percent, DiNicola said. Cotton Farmers “Cotton is a very important income-generating crop for smallholder farmers,” DiNicola said. Increased yield makes “a very big impact on their livelihood,” she added. Monsanto’s earnings will fall in fiscal 2010, the company has forecast, ending eight consecutive years of gains as U.S. farmers spend less and Chinese competitors sell cheaper generic versions of its Roundup herbicide. The shares have rallied 6.6 percent this year, closing at $74.97 in New York yesterday. Monsanto is conducting field tests on corn modified to increase yield under drought conditions for commercialization in 2012 in the U.S., the world’s largest exporter of the gain. The new varieties will help achieve a goal of doubling the crop yield to 300 bushels per acre by 2030, DiNicola said. The company is cooperating with government and non-profit organizations to develop drought-tolerant corn suitable for Africa and may release varieties in the region five years after the U.S. introduction, she said. Corn yield in sub-Saharan Africa is about one metric ton per hectare, compared with eight tons in the U.S. and the global average of five tons, according to Monsanto. Drought-tolerant crops could boost African yields by 20 to 35 percent in 10 years, DiNicola said. “Water is definitely a very serious challenge for agriculture today, and that’s likely to get even more challenging going forward,” DiNicola said. About 218 million people in Africa, or around 30 percent of the total population, are estimated to be suffering from chronic hunger and malnutrition, according to the FAO report last week. To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net

Read the full article →

Karin Kloosterman: 4 Trade Secrets For Clean Tech Entrepreneurs in Small Countries

October 7, 2009

A plucky little country, is how the late Princess Diana once described Israel to Shimon Peres . About the size of New Jersey, Israel has a disproportionate number of clean tech companies and investment in clean technology compared to its size. And now businessman and investor David Anthony from 21Ventures in the US is about to reveal his trade secrets and insider information about clean tech investing in Israel. If you are itching to become a clean tech entrepreneur in Israel, this is must-read information. If you’d like to know more about what makes the industry tick, read on. His advice applies to many other small countries interested in ramping up development and investment in clean tech. Unlike Silicon Valley and the high-tech industry, the clean tech market today has no center of excellence, Anthony tells Green Prophet. In the last 50 years of venture capital investing there has been a saying: Never fly over your company — meaning one shouldn’t invest in a company that isn’t within a 60 mile radius of the office. But without a center for clean technology, explains Anthony, a VC fund now has to dig into new territory to find the golden investment egg. Investors need to cross borders and turn over new stones. Compared to any other country in the Middle East, Israel is a clear and defined leader in this market, so we’ve focused on Israel. Most of Anthony’s tips could work in other non-US locales as well. First a short background on Israel: According to Anthony, clean technology researchers are not the same scientists that the traditional Israeli technology environment was founded on. Focused primarily on IT and telecom, Israel’s high-tech success came about as a result of Israelis joining the army and getting an electrical engineering degree. But this is not the case anymore in clean tech: “What did Israel need to succeed?” Anthony asks. “Telecom was critical. They needed to tap Arafat for 30 years. IT security obviously is critical for Israel so necessity has driven the Israeli technology economy to focus on IT and telecom.” But today, Israel and the world has bigger problems than Arafat, says Anthony: “Global warming and over-population and the combination of global warming and over-population is greatest problem of the 21st century. There are different types of scientists solving these problems like physical chemists and fluid dynamicists. “These are individuals who have not traditionally participated in the technology economy of Israel for the last 20 years. There is a disconnect between the entrepreneurs and the technology refugees because there are little opportunities now in IT and telecom,” he says. Usually management types with electrical engineering backgrounds, this kind of training and background might not be applicable when “scouring scientists of major universities in Israel,” says Anthony. DAVID ANTHONY How to bridge the divide and disconnect? Anthony, offers his trade secrets: 1. Scour universities . Troll these places before technology refugees get to them. Entrepreneurs are not digging deep enough at Israeli universities — at the Weizmann Institute, The Technion, Bar Ilan University or Tel Aviv University. Entrepreneurs, he says, need to go out in the field and do their research. They need to meet with tech transfer officers to find out what’s interesting. “One of the great mysteries is why doesn’t Israel have a leading solar energy company,” Anthony asks. “Luz I was a failure . . . Israel is not on the map of the Top 10. Why is Germany a big leader? Germany doesn’t have sun.” It’s because the entrepreneurs in Israel have not mined the scientists or scoured or searched deep enough, he reasons. Time to get busy: Read Science Daily , a compendium of scientific released from universities around the world. Go and visit the tech transfer offices, like Ramot at Tel Aviv University . Contact scientists directly. Tell them: I would love to sit and talk with you about the potential for commercializing your research. “What I do isn’t brilliant or insightful,” says Anthony. “It’s like being a basketball scout: but at universities you are dealing with scientists instead of 16-year-old seven footers.” 2. Be less practical and forget about getting to the top . According to Anthony Americans are less practical than Israelis might think. Living in 7,000 square foot homes, Israelis who live in 4-room apartments don’t see how impractical Americans really are, he says. Even though milestones and pilot projects are developed in Israel through connections and limited funds, “adopting technology quickly doesn’t always win.” Instead of wasting years and money developing a pilot in Israel, one needs referencable customers in the US to attract US investment. The Israeli military mentality doesn’t translate well in America, North America or Asia. Nor does aspiring to get to the top quickly, says Anthony. “Let’s forget about going to the top. Israelis are good at tinkering and improvising and getting a prototype. . . If I tell someone my security software is defending the Israel Defense Forces, Americans want to know who is your US customer.” The bottom line: don’t bank on pilot projects in Israel. 3. Bet your life on your research . Israeli scientists, unlike those in the US, are not as quick to leave the comfort of academia. Being a scientist and having a position at a university commands more respect in Israeli culture than in the US, meaning the Israelis are less likely to leave their tenure. “But if I am investor and you’re at Bar Ilan University or the Technion, am I supposed to put my money in you if you aren’t betting your life?” asks Anthony. “This is something that IT scientists understand, but I don’t think it has reached the clean tech researchers yet. I want a CTO full-time. “There is something about betting your life on a business. If you don’t, then it’s hard for me as an investor, with an investment ranging from $10 to $15 million over a set of milestones.” 4. Build a business plan and milestones with teeth . The last tip, Anthony offers is for entrepreneurs to build a solid business plans with milestones mapped out. This demonstrates to him the increasing value of the company. “In today’s market, my most difficult job negotiating is not the price, but the teeth of the milestones. That to me is always the weakness in business plans and I see it in presentations: someone will say I need $4 to 10 million. This needs to be broken down into 4 or 5 milestones over 3 or 4 years. Thinking out those milestones, commercial milestones, collaborative milestones ahead of time is the best way to get my attention,” he says. “If you have an opportunity and solve a huge problem, then I am interested. If you thought out the milestones well, then I have a compatibility with you.” David Anthony is the founder and manager of 21Ventures , a virtual clean technology incubator focusing on the ideas and innovations that will dominate the 21st century. You can follow him on Twitter at http://twitter.com/DavidAnthony21 Karin Kloosterman is the founder of Green Prophet , a green news site covering green business and environment news from Israel and the Middle East. See www.greenprophet.com .

Read the full article →

James Boyce: iQuit

October 5, 2009

The US Chamber of Commerce is up to its eyeballs in disgruntled members and as a membership organization, perhaps it will consider the incredible amount of damage it has done to is reputation by aggressively resisting climate change initiatives and legislation. After all, here are a few of the highlights of the Chamber’s resistance, courtesy of Brad Johnson over at The Wonk Room: 2009: Chamber SVP Kovacs Calls For ‘Scopes Monkey Trial’ On The ‘Science Of Climate Change.’ “It would be evolution versus creationism. It would be the science of climate change on trial.” Chamber of Commerce Senior Vice President William Kovacs explained that the Chamber was seeking a “Scopes monkey trial of the 21st century” on global warming to prevent the EPA from declaring greenhouse gases a threat to the public welfare. [Los Angeles Times, 8/25/09] 2009: Chamber Claims No ‘Plausible Theory’ To Link ‘Climate Change With Extreme Weather Events And Disease In The United States,’ Disputes ‘Claims Of Ocean Acidification.’ In an official filing prepared by the law firm of Kirkland & Ellis for the comments on the EPA’s proposed endangerment finding for greenhouse gases, the U.S. Chamber of Commerce cited blog posts by global warming deniers such as Pat Michaels and Chip Knappenberger to challenge a broad range of climate change science, including sea level rise and the “UN/IPCC forecasted temperature increases.” [U.S. Chamber of Commerce, 8/25/09] 2009: National Chamber Foundation Promotes Global Warming Denier Book As ‘#1′ Top Book Of The Year. Promoting “Climate of Extremes: Global Warming Science They Don’t Want You to Know,” the U.S. Chamber of Commerce’s National Chamber Foundation writes: “Climatologists Patrick J. Michaels and Robert Balling Jr. explain that climate science is hardly unbiased,” and that the “pop-culture icons of climate change turns out to be short on facts and long on exaggeration.” On Twitter, the National Chamber Foundation ranked the book “#1″ in its “Top Books of ’09.” [National Chamber Foundation, 8/20/09] Of course this isn’t really surprising when the head of the Chamber has received millions in board compensation from Union Pacific, a company that is is estimated makes 20% of its revenues hauling coal . Now, however, the momentum is really moving against the Chamber and surely change must be in the air. Today, Apple, to its great credit, resigned from the Chamber because of the Chamber’s policies. From the New York Times GreenInc blog we learn that Apple was clear as to why it’s resigning . Really clear. Apple has become the latest company to resign from the United States Chamber of Commerce over climate policy. “We strongly object to the chamber’s recent comments opposing the E.P.A.’s effort to limit greenhouse gases,” wrote Catherine A. Novelli, the vice-president of worldwide government affairs at Apple, in a letter dated today and addressed to Thomas J. Donohue, president and chief executive of the chamber. Thank you Apple. And just a little note to everyone who is still hanging around and supporting the Chamber. The Chamber’s position is clear. You stay in, and keep paying dues, you are supporting their position. So should you stay or should you go? We say go. ( There’s much more on the Chamber her e, and hats off to Pete Altman of NRDC for keeping the heat turned on high. Stay in touch on that here .)

Read the full article →

Obama Olympics Trip Spurs Calls for Return Visit on Climate, Loser or Not

October 3, 2009

By Kim Chipman Oct. 3 (Bloomberg) — President Barack Obama’s failure to land the Olympics on a visit to Copenhagen hasn’t diminished pressure from environmentalists for him to return there this year on another risky mission: winning a global warming accord. “I would hope since he went to push Chicago’s bid for the Olympics, he would go back in December to help save the world from climate change,” said Phyllis Cuttino , director of the Pew Environment Group’s U.S. Global Warming Campaign in Washington. The U.S., China and 190 other countries are set to gather in Copenhagen to hammer out terms for a climate accord to replace the Kyoto Protocol, which expires in 2012. U.K. Prime Minister Gordon Brown promises to be there if needed to “clinch the deal” and is urging other world leaders to do the same. Obama would consider returning if the talks were designed to be between heads of state, White House press secretary Robert Gibbs told reporters traveling with the president aboard Air Force One yesterday. Obama’s personal request for a Chicago Olympics was denied yesterday when the International Olympic Committee chose Rio de Janiero. Environmental activists such as Greenpeace used his presence in Copenhagen to pressure him on the climate meeting. “Right city, wrong date,” read a Greenpeace banner that hung from Copenhagen’s St. Nicholas Church Tower, overlooking the square where Obama met with the Danish royal family and Prime Minister Lars Lokke Rasmussen. “If the U.S. is to lead the world in getting a fair, ambitious and binding agreement in Copenhagen, then the president needs to lead,” said Michael Crocker, a spokesman for Greenpeace USA in Washington. ‘Technocrats and Bureaucrats’ “It’s clear the technocrats and bureaucrats haven’t been able to get the job done and having the gravitas of heads of state in the same room negotiating may be what is required,” he said. Obama’s decision may hinge on whether he has U.S. climate- change legislation to tout at the December meeting. While the House of Representatives passed a bill to cap greenhouse-gas emissions in June, Democratic Senators John Kerry and Barbara Boxer introduced a proposed bill three days ago. U.S. lawmakers aren’t likely to approve climate change legislation by the time countries meet in Copenhagen, the White House’s top energy adviser, Carol Browner said at a conference in Washington yesterday. Allocate Permits The Senate bill says nothing about how to allocate pollution permits, an issue that took the House months to resolve after discussions with utilities and other companies. The Senate bill faces opposition from Republicans as well as coal-state Democrats such as Jay Rockefeller of West Virginia. “I would hope President Obama will be put in a position that he can go to Copenhagen in December because the U.S. has legislation passed or near being passed,” John Bruton , the European Union’s ambassador to the U.S., said in an interview yesterday. “That would enable the U.S. to lead by example on climate change,” he said. “I’m really hoping a return trip to Copenhagen will be possible for the president.” At a working dinner on climate change of about 20 world leaders last week in New York, “many” heads of state and government said they were willing to attend the Copenhagen negotiations, according to a UN news release on Sept. 22. ‘Outreach Needed’ “Other nations hope the president’s willingness to go to Copenhagen for the Olympics signals that he will be willing to do the same kind of outreach needed to move the climate issue forward,” said Annie Petsnok, a lawyer for Environmental Defense Fund, an advocacy group based in New York. She previously worked in the administrations of Presidents George H.W. Bush and Bill Clinton Dan Esty , head of Yale University’s Center for Environmental Law & Policy in New Haven, Connecticut, said he’s “doubtful” Obama will attend the Copenhagen meeting because the likelihood for a successful negotiation is slim. The biggest obstacle in getting a climate agreement in Copenhagen is lack of U.S. legislation to “signal to the rest of the world that we are getting serious about reducing emissions,” Esty said in an interview. “The first rule for White House staff is to keep the president away from anything that doesn’t make him look good,” said Alden Meyer , director of strategy and policy at the Union of Concerned Scientists, an advocacy group based in Cambridge, Massachusetts. “The Catch-22 here is that the chances for success in Copenhagen may be enhanced if Obama and other heads of state agree to go,” he said. The U.S.’s Shoulders Obama has no regrets about flying to Copenhagen to unsuccessfully lobby for Chicago’s bid for the 2016 Summer Olympics, White House senior adviser David Axelrod said yesterday. “All he really lost was some sleep,” Axelrod said in an interview on Bloomberg Television. Gibbs said earlier this week that success in Copenhagen doesn’t lie on the U.S.’s shoulders alone. “We’re not an American solution away from having a total agreement in Copenhagen, right?” Gibbs said in a briefing. “We need the Chinese to come to this with some serious proposals. We need the Indians to come.” Bruton said he agrees that a deal must be global and can’t be accomplished without crucial participation by countries like China, the world’s biggest greenhouse-gas emitter. “An agreement without China doesn’t mean very much,” he said. “But an agreement without the U.S. doesn’t mean very much either. That’s the point.” To contact the reporter on this story: Kim Chipman in Washington at KChipman@bloomberg.net

Read the full article →

Harry Moroz: Prediction Impossible: How Protecting Consumers Is Like Protecting the Environment

September 30, 2009

The financial crisis has left conservative policymakers on their guard. The notion that all financial innovation is good is not holding water and wonks on the right are scrambling to concoct viable alternatives to the Consumer Financial Protection Agency (CFPA) advocated by the White House and, in a weaker form, by Rep. Barney Frank’s Financial Services Committee. In testimony to that committee today, Heritage Foundation scholar David John suggested that a CFPA “would be a huge mistake that would hurt consumers far more than it helps them.” Instead, John proposed the creation of the Federal Financial Institutions Examination Council (FFIEC). The Council would examine regulatory standards set by individual states and federal regulators in order to create uniform standards that apply to all financial institutions and meet “the challenges posed by complex new financial products.” Beyond the obvious shift away from consumer protections invoked by the name of the council and beyond the disingenuousness suggested by the unwieldiness of the name and its acronym (we all know acronyms cannot be longer than four letters), the FFIEC would continue to allow — even encourage — regulatory arbitrage (shopping among states for lax regulators); would give financial institutions continued access to their preferred mode of influence (rulemaking regulators); and would abandon any strong mandate to protect consumers first. There are numerous other responses to the financial crisis being discussed, ranging from the G-20′s peer review strategy to super-regulators and safeguards for systemically important institutions. One of the commonalities of these approaches, including the FFIEC, is that they are primarily strategies to prevent crises, not predict them. Unlike CrimeStat programs , for instance, that can reveal concentrations of criminal activity at which police forces target resources, these proposals target resources first. This is primarily because the severity of financial crises is hard to predict. As the Federal Reserve Bank of San Francisco pointed out this week: [Our analysis bodes] poorly for the success of early-warning models going forward…We conclude that constructing a plausible statistical model that can predict financial crises similar to the current one will be challenging. The effort to address climate change involves a similar challenge. We know global temperatures are rising and we know the types of risks this poses to our economic and physical well-being. But it is extremely difficult to predict with certainty when or how serious these risks will be in, say, 20 years. Sure, the IPCC can formulate models that estimate impacts, but technological changes and government intervention will inevitably alter these impact estimates significantly. Again, all we can say with certainty is that climate change is happening and the impacts will be negative, just like we can identify , as the FRBSF also points out, “signals of rising levels of risk in the economy.” If we knew, say, that sea levels would rise only in City A, then perhaps our best and cheapest strategy would be to move City A and its residents to higher ground. Similarly, if we knew, say, that financial innovation A would cause a financial meltdown, we would do best to eliminate it. The problem, however, is that such predictions are extremely difficult (impossible) to make. Instead, we must rely on strategies to create predictable, relatively stable conditions that can provide us a better idea of where, when, and even what type of good and bad things are going to happen. For instance, climate change legislation in Congress sets clear goals for emissions reductions that offer control of how quickly social costs of global warming are created, rather than permitting the private sector to create costless externalities at will. The Consumer Financial Protection Agency, more than John’s FFIEC and the other proposals for financial system reform, seeks to create such stable conditions in the financial sector. By using consumer well-being as a first principal, the CFPA will consider the social costs of financial innovations. Without consideration of these social costs (and benefits) in recent years, the financial services industry sowed the seeds of a crisis without even knowing it. Reforms like the FFIEC would do little to take these social costs into account. Though regulators are unlikely to ever know whether a particular financial innovation will lead to financial collapse, the CFPA offers significantly more knowledge about whether financial innovations are hurting or helping the country as a whole.

Read the full article →

Les Leopold: Favoring Bankers Over Boilermakers?

September 30, 2009

Despite Wall Street’s recklessness, we still seem more comfortable with the financial sector than with manufacturing. After all, manufacturing has a two hundred year history of occupational disease and environmental destruction. It produces poisons we don’t want, consumer goods we don’t need, and it uses more energy than we can afford to burn. For many, the industrial revolution looks like an unmitigated environmental disaster. So if manufacturing runs away to far off lands, few are likely to shed tears — unless we work in these industries. In contrast, financial products are relatively clean. Yes, its offices are too large and they use too much paper. And certainly the sector pays its executives far too much. But it’s a lot cleaner than a steel mill and leaves a much smaller carbon footprint. Also, venture capitalists are moving money into renewable energy, green chemistry and a wide variety of green manufacturing that might actually help us develop a more sustainable economy. A sizable portion of our financial leaders are conservationists. They donate to environmental groups to help preserve our watersheds and streams. They own large tracts of land near national parks and forests that help protect our land, water and wildlife. Many of the wealthiest Wall Street elites would claim to share our deepest concerns about global warming and sustainability. Industrial workers, however, can get really nasty when environmental regulations threaten their livelihoods. Although they like to hunt and fish, workers who see their jobs threatened seem more than ready to chop down virgin trees, knock off the tops of mountains, and pump CO2 all over the globe. Sure, we don’t like the fact that Wall Street’s fantasy finance casino crashed the economy, but even that has a positive environmental angle. The collapse has slowed down the world economy, slowed down production and transportation, and therefore has slowed down the output of carbon. And besides, the manufacturing sector accounts for fewer and fewer jobs each year, so why should we give a damn about it? Because no society can endure for long if it fails to create decent jobs for all its people. Right now, more than 29 million Americans are unemployed or forced into part-time work. They need jobs that are at harmony with nature. Creating that kind of work, I believe, will require a monumental commitment, just like the Manhattan Project, the Marshall Plan or the moon shot. But first we need to understand how we got into this fix. Over the past thirty years we’ve engaged in a gigantic experiment with three major components — the deregulation of financial markets, the globalization of production, and “tax reforms” which allowed wealth to accumulate in the top fraction of one percent. This was supposed to unleash entrepreneurial initiative and raise all boats. But it didn’t work according to plan. Industry began relocating all over the world. The financial sector grew rapidly, and an enormous pot of wealth accumulated in the hands of a few. Meanwhile average wages (after adjusting for inflation) declined by 18 percent while our industrial core was shipped overseas. The super-rich actually had so much capital that they ran out of real-world investments. That’s when their money flowed into the newly deregulated fantasy finance casino. Bubbles inflated — from the savings and loan fiasco to the dot.com crash to the housing hurricane. This grand experiment in deregulated capitalism failed miserably. We were moments away from the Great Depression II only one year ago. (For a full description see The Looting of America .) To stop a full scale depression we poured trillions into Wall Street, but little has changed as our financial powerhouses, pumped up with taxpayer largess, are doing all they can to stop regulations on fantasy derivatives and caps on outrageous salaries. Nothing is preventing Wall Street from doing what it does best: seek out and over-inflate financial bubbles, skimming billions of dollars in fees all along the way. (See One Year After Lehman: Another Crash Coming? ) In short we face both an economic and an environmental crisis. What do we do? Obviously, we have to learn to live within the constraints of our natural environment. But we also must fulfill the most fundamental employment needs of our social environment. That is why we should embark on a modern day moon shot to lead the world forward in renewable energy and other green technologies. This would require massive public investments in research and development, and in ensuring the adoption of the best technologies — not because the private system can’t, in principle, do those things, but because in reality it can’t do them as fast as they need to be done. We’re talking several hundred billion a year for at least twenty years. And if we funded it by taxing Wall Street and the super-rich we could tackle two problems at once: make real progress on global warming and prevent the financial sector from wrecking the economy again. I believe the fairest ways to secure funding is through windfall profits taxes on Wall Street profits, a small transaction tax on large and speculative financial transactions, and a very steep progressive income tax on the super-rich. (I’m an Eisenhower radical. In those days the marginal tax rate on millionaires was 90 percent.) This would move the money from the fantasy finance casino to the real economy and it could lead to a rejuvenated economy based on renewable energy and pollution prevention. Such a massive commitment also would require border adjustment taxes on carbon to make sure the new green industries don’t flee to nations with lower standards. It makes no sense to import windmills from countries whose steel plants put out three times the carbon as ours. It makes no sense to use up fossil fuels to ship green goods all over the globe, when those goods could be made much closer to their point of final use. I know it’s a very tall order to revamp Wall Street and to invent a green economy at the same time. But both the employment and environmental problems pose immanent threats. No free-market magic will make them disappear. It requires our human intervention. Let’s hope we have the wisdom and will to get going — now. Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It , Chelsea Green Publishing, June 2009.

Read the full article →

Obama Faces Doubts on U.S. Climate Law as He Prods World Leaders to Act

September 23, 2009

By Kim Chipman Sept. 23 (Bloomberg) — President Barack Obama , who challenged world leaders to overcome “doubts and difficulties” and reach a global accord on climate change, faces skepticism over whether he can deliver legislation in his own country. Obama said in a speech to a United Nations conference on global warming yesterday that “we cannot meet this challenge unless all the largest emitters of greenhouse gas pollution act together.” About 190 nations face a deadline to craft a new climate- change agreement at a meeting in December in Copenhagen . Environmental groups and government officials are asking whether Obama can win Senate approval of climate-change legislation the House passed in June. The president and lawmakers remain entangled in debate about overhauling the U.S. health-care system. “People are waiting to see the signal from the White House about what comes next after health care and how important it is to him to have some momentum going into Copenhagen,” Alden Meyer , director of strategy and policy at the Union of Concerned Scientists, an advocacy group based in Cambridge, Massachusetts, said in an interview. “They are starting to get more impatient.” The House passed legislation that would reduce emissions 17 percent from 2005 levels by 2020. It would create a cap-and- trade system to limit carbon dioxide emissions tied to global warming and then establish a market for the trading of pollution allowances. The measure is opposed by most Republicans, and a number of Democrats in the Senate have said they won’t support it in its current form. Committee action on cap-and-trade legislation was delayed from early September and hasn’t been rescheduled. ‘Doubts Linger’ “Doubts linger on whether the U.S. will pass a bill before the meeting in Copenhagen,” said Neal McAliley, head of the climate change initiative at the New York law firm White & Case LLP. Senate Majority Leader Harry Reid , a Nevada Democrat, said yesterday that senators will “push climate as hard and as fast as we can.” “The failure of the Senate to pass meaningful climate and energy legislation is hampering the president’s ability to make substantive commitments to the global community,” Keya Chatterjee , acting director of the World Wildlife Fund’s climate program, said in a statement after Obama spoke yesterday. “With the Copenhagen summit convening in just 10 weeks, the Senate has a narrow opportunity for salvaging the reputation of the U.S. abroad.” The health-care fight has dominated Washington’s attention, said Carol Browner , Obama’s top adviser on the environment and energy, in a briefing yesterday for reporters in New York. “Health care has obviously taken up more time than was originally anticipated,” Browner said. ‘Twiddling Their Thumbs’ John Bruton , the European Union’s ambassador to the U.S., voiced impatience in an opinion piece in the San Francisco Chronicle on Sept. 17 that the U.S. is preoccupied with health care instead of global warming. “The rest of the world cannot be expected to sit around the negotiating table in Copenhagen twiddling their thumbs, waiting for the Senate of one country (however big) to deal with other business,” Bruton said. The administration will make its best case in Copenhagen even if the Senate fails to act by December, Todd Stern , Obama’s top climate negotiator, said at the briefing with Browner. “In the event that there’s not domestic legislation done by the time of Copenhagen, we will negotiate with that in mind,” Stern said. “But certainly the most progress we can get would be helpful.” Kyoto Protocol Without Senate action, the administration risks a repeat in Copenhagen of what happened during crafting of the 1997 Kyoto Protocol, which then-President Bill Clinton signed. The Senate and later President George W. Bush rejected that pact on the grounds it would hurt the economy and because China and other developing countries aren’t required to cut greenhouse-gas emissions under the accord. Former Vice President Al Gore , speaking at the UN forum yesterday, said Obama’s influence in Copenhagen would be “greatly enhanced” if he could go with finished legislation to back up his commitments on climate change. “The hour is late and it may well be he will be forced to go with the legislation still in process,” Gore said. “It is very important to pass the legislation.” To contact the reporter on this story: Kim Chipman in New York at chipman@bloomberg.net

Read the full article →

Patt Cottingham: Goodbye/Hello 12: Moving Toward Cosmopolitan Brands

August 9, 2009

First, let me define how I am using the term cosmopolitan brands . The origin of the word cosmopolitan is borrowed from the Greek word kosmos or cosmos , meaning world. Through globalization, brands have extended their products and services into new markets. Yet is profiting from new global markets the end game, or will brands come to value the needs of humanity as important to their bottom line? The next phase will be if brands chose to do this. Will they make the choice to be responsible, interconnected world citizens, knowing that the choices they make inevitably effect everyone? If so, they are becoming worldly cosmopolitan brands that are defined and shaped, not just in the short term for profit margins, but in a longer, more sustainable humanitarian view. For a really good article on cosmopolitanism and how Noah Bopp, the director of the School for Ethics and Global Leadership teaches his students how global interconnectedness and choice determine brand ethics by using a Hershey’s Kiss as an example, please visit Patriotism and Cosmopolitanism by Policy Innovations, an online publication of the Carnegie Council Brands like the U.S.’s Patagonia, Sun Chips, Ethos Water, Newman’s Own, Ben & Jerry’s, as well as the U.K.’s Ethletic Sneaker, Ireland’s Edun, France’s Sur Le Dos Des Filles, and Korea’s Beautiful Store and Natural Dream, a growing number around the world are beginning to move in this direction. These brands are making very conscious and considered choices about their impact on humanity. They are building into their brand DNA a code of ethics that is next generation and humanitarian focused. It is a long-sighted view. Given the urgency of global warming, issues of poverty, human rights, and confluence of other factors facing our global human society, planning only in the short term is rapidly becoming yesterday’s model. The new model of cosmopolitan brand building is not waiting for perfection but taking deliberate, consistent steps, and weighing the good of humanity along the way. It will take influencial leaders to guide brand policies, behaviors, and actions as it relates to humanity at large. Informing and educating customers about their policies and practices, and encouraging them to become cosmopolitans is beginning to happen. In turn individuals can make the choice to buy from brands that recognize this worldly interconnected humanitarian view. They can teach their children this one world philosophy early so that they too will contribute to the principle of cosmopolitanism. Brands who build up from a humanitarian foundation will create a more responsible and harmonious system. And that is a really good place for all brands to be and grow into tomorrow. The new model of cosmopolitan brand building is not waiting for perfection but taking deliberate consistent steps weighing the good of humanity along the way. It will take influential leaders to guide brand policies, behaviors, and actions as it relates to humanity at large. Informing and educating customers about their policies and practices, and encouraging them to become cosmopolitans is beginning to happen. In turn individuals can make the choice to buy from brands that recognize this worldly interconnected humanitarian view. They can teach their children this one world philosophy early so that they too will contribute to the principle of cosmopolitanism . Brands who build up from a humanitarian foundation will create a more responsible and harmonious system. And that is a really good place for all brands to be and grow into tomorrow. Goodbye to a limited short-term profit only view of corporate brand building. Hello to a long-term view of strong bottom-lines from humanitarian brand building. Goodbye to disconnected brands lacking ethics and concern for humanity. Hello to an interconnected brands with moral compasses guided by humanity. Goodbye to consumerism. Hello to cosmopolitanism.

Read the full article →

Climate Change Threat Needing Government Push in Global Poll of Investors

July 22, 2009

By Kim Chipman July 23 (Bloomberg) — Global investors say climate change is a threat and want government action to combat it, even as a plurality says the effort will hurt corporate profits.

Read the full article →

Next Entries →