Skins in the game

sidewalk plaque in Charlottesville, Virginia plaque featured chalk graffiti added by local artist Richard Parks.
(Courtesy of Richard Parks)

As if we need reminding (ed: we do!), set aside how much we hate women and remember how racist we are! The discussion about American universities – especially our oldest, most venerable institutions of higher learning – and their deep connections to slavery has barely begun to break through, even and especially at our oldest, most venerable institutions. So, while the public remains largely unaware of the history, we might wonder how universities have for so long escaped scrutiny about the past – about how they were built, how they succeeded, who they succeeded for, and how so much of this was connected to buying and selling people to use as free labor. The NYRB dives into a four new books, and sets the stage rather clearly:

One reason, perhaps, that academic institutions were spared from scrutiny was that they seemed, by design, to be physically removed from the vulgar transactions of commercial life. The trading houses where merchants contracted for consignments of cotton, rum, molasses, and human chattel; the insurance firms that indemnified slave owners for loss of human property; the clothiers that manufactured coarse smocks for enslaved field hands—all these were likely to be found among shops and markets, close to the banks from which they obtained credit and the wharves where human goods were loaded or unloaded for sale.

Think, on the other hand, of our early colleges: Harvard on its bluff above the Charles River, or Yale looking across New Haven Green toward the Long Island Sound, or Brown atop the heights of Providence. Their architecture (ecclesiastical) and setting (pastoral) seemed to say, “We stand above the fray, removed from the workaday world, in a high-minded sphere of our own.” For people like me whose shelves are filled with books about these colleges, it’s not a bad idea to paste a note every foot or so along the edge of the shelf bearing this reminder from the novelist James McBride: “The web of slavery is sticky business. And at the end of the day, ain’t nobody clear of it.”

And friends, of course it’s not just the Ivies. The preponderance of screaming denials (CRT!) and counter-recriminations (Woke!) arise out of fear and cowardice about facing this history as it bleeds to profusely into our present. Can’t stop the bleeding without finding the wound, cleaning it carefully, repairing as much damage as possible, dressing it and providing all available care for full recuperation. Only then can we attend and check on the healing.

Image via WAPO

Shop ’til you stop

Insightful NYRB review of two new books about life in a slower economy. It’s NOT that things will necessarily be so much worse when we are spending less, driving less, burning less – they won’t be worse. It’s just the transition to consuming less itself we consider to be so painful as to be unthinkable. We’re such babies:

Generations of economists, meanwhile, have insisted on the goodness of economic growth and warned that any significant drop in consumption would vaporize jobs, leaving millions if not billions of people without a means of supporting themselves or their families. (Margaret Thatcher’s well-known phrase “There is no alternative,” sometimes shortened to TINA, refers to the assumed necessity of perpetual growth.) The resulting dilemma, as MacKinnon puts it, is that “we must stop shopping, and yet we can’t stop shopping.”

Rather than dismiss this conundrum, MacKinnon seeks to complicate it. Whose jobs would be lost, and for how long? How could societies and their economies adapt, and what could they gain in the process? How would other species react to quieter, less polluted habitats? To begin to answer these questions, he proposes a thought experiment to economists, entrepreneurs, and others: Say that on a single day not long from now, consumer spending falls 25 percent. What next? Predictions in hand, MacKinnon seeks real-world equivalents, finding disparate places and times where conditions similar to those of his thought experiment have already come to pass.

This approach, which might be called speculative journalism, was memorably employed by Alan Weisman in his 2008 book The World Without Us, which MacKinnon credits in his acknowledgments. To conjure a planet precipitously vacated by humans, Weisman interviewed architects, engineers, ecologists, and others qualified to forecast the fates of abandoned cities, farms, and forests. He then visited deliberately unpeopled places, such as the Korean Demilitarized Zone and the United Nations–controlled buffer zone between the Turkish and Greek sides of the island of Cyprus. In a kind of reverse archaeology, both Weisman and MacKinnon assemble shards of past and present into plausible futures. The most obvious difference between their thought experiments is that MacKinnon’s became all too concrete: when he was midway through his research, pandemic shutdowns upended the world economy, and the effects of his imagined fall in spending were inflicted on real people in real time.

The Day the World Stops Shopping is neither an economic treatise nor a detailed policy proposal, though it draws on both as sources. It is an enjoyably idiosyncratic tour led by a perceptive, empathetic guide. It assumes that any significant, lasting reduction in consumption will result from accidents and innovations, brought about not by individual households but by loosely coordinated communities, nations, and regions. In this sense, it is both more realistic and more persuasive than any technical argument, for it makes it possible to imagine not only one alternative to endless growth but many.

Lots of important points here, brought us by people who are smarter.

Wait and see

Sort of a corollary of f*ck around and find out. But.. good to see Biden getting serious about supporting Ukraine. That’s a big number and it needs to be. On verra, as they say.

The ‘let’s see if this sorts itself out’ attitude from some western countries – albeit, right now fewer by the day – mirrors the general tendency of the same countries to do very little about climate change. All the while:

Rising seas have long been a threat to coastal cities. New research suggests that cities—particularly in Asia—are sinking as well, compounding the risks of frequent and severe flooding.

In Karachi, land is sinking five times as fast as the sea level is rising, according to the study published this month in Geophysical Research Letters. Manila and Chittagong, Bangladesh’s second-largest city, are sinking at 10 times the rate of the rising waters.

In China’s Tianjin, a coastal city about 150 kilometers southeast of Beijing, the ground is giving way at 20 times that speed.

In those four cities alone, the phenomenon could affect roughly 59 million residents.

The study, which used satellite data to analyze 99 cities around the world from 2015 to 2020, points to groundwater extraction related to rapid urbanization and population growth, oil and gas production, and construction.

The next life you save just might be your own.

Making climate reduction technologies sexy

Or… sexier than ape cartoons.

My head, it shakes. Because no matter how seriously and soberly one might approach the financial dilemma of bringing promising technologies to maturity by broad investments, there are always hand-scrawled love notes, or pictures of pictures, or the newest version of L.H.O.O.Q., not to mention instant toothbrush delivery schemes to entice the ridiculously wealthy or even the passingly prosperous. It’s a problem:

Tony Fadell, who spent most of his career trying to turn emerging technologies into mainstream products as an executive at Apple and founder of Nest, said that even as the world faces the risks of climate change, money is flooding into less urgent developments in cryptocurrency, the so-called metaverse and the digital art collections sold as NFTs. Last year, venture capitalists invested $11.9 billion in renewable energy globally, compared with $30.1 billion in cryptocurrency and blockchain, according to PitchBook.

Of the $106 billion invested by venture capitalists in European startups last year, just 4% went into energy investments, according to PitchBook.

“We need to get real,” said Fadell, who now lives in Paris and has proposed ideas on energy policy to the French government. “Too many people are investing in the things that are not going to fix our existential problems. They are just investing in fast money.”

Even so-called ESG funds and investor movements run the risk of becoming fads, passing, allowing a regression toward the mean, also know as same old, same old. Governments have to do more to leverage current investments and attract new. But there also has to be some boring seriousness to guide the reckless speculation, as contradictory as that sounds. Otherwise, we’re still speculating alright, on something.

Image: Not a new version. Duchamp would be kicking himself

Tales from the crypt(o)

NBA commentator Jeff Van Gundy’s well-placed, near-extemporaneous “back at the crypt” comment notwithstanding, ubiquitous references to crypto currency range from annoying to cloying. Everything about digital money is either scammy or… that seems to be mostly it. Scammy neatly encompasses the over-hyped, Ponzi-schemed, last-one-in nature of the the collection of binary data that necessarily requires us to put all the usual finance-related terms in quotes: “ownership” “collateral” “token” “transaction.” You could go on.

And besides the obvious downsides of NFT’s – from terrific money-laundering possibilities to the proliferation of really bad art – we’d be remiss in not noting crypto’s climate impacts:

Crypto’s overall climate impact remains massive, with certain currencies swallowing up entire nations’ worth of processing power from individual computing units and data centers—much of whose power comes from fossil fuels. The most common form of cryptocurrency mining, proof of work, requires a massive amount of processing power. Alternative mining methods have a mixed track record so far, with some ostensibly “sustainable” mining systems still requiring significant amounts of dirty or clean power. And transacting any tokens across the blockchain, whether an NFT or a Litecoin, sucks up the collective energy feeding into the transaction, no matter the product at hand. One estimate claims that a single NFT trade across the much-used Ethereum blockchain uses enough energy that could power an entire house for several days. And this is all so the buyer can have bragging rights about “owning” an image.

Celebrities who are selling NFTs and also claim to care about the environment: What are you doing? Whatever it is, there sure are a lot of you. Here’s a list—surely incomplete—of luminaries who brand themselves as climate-conscious yet have also been hawking NFTs in some form or the other, ensuring this bizarre digital culture product will linger in the public discourse while possibly ruining the art world, the planet, and our collective sanity.

Not even-close-to-exhaustive list of scam-adjacent proponents at the link. Yes, engaging in yet another form of workaround for doing not the things we need to do about global warming: what are we doing? The climate question at the center of everything, that we’ve been needing to ask for decades, that we still need to answer.

Image: the crypt in question

Ruffling the kleptocracy

In other news – just started a subscription to the FT and wow, there ARE other stories out there. Boring, significant. Anyway, the U.S. is about to ban anonymous shell companies:

The Biden administration’s focus on corruption and money laundering may so far have attracted less notice than its other big policy decisions. But it is the most meaningful manifestation of the US president’s argument that making the economy work for ordinary Americans is intimately connected to US national security and foreign policy interests.

There are many reasons to cheer this turn in policy. First, it is an all-too-rare example of relative bipartisanship in a deeply polarised country. Days before the January 6 attack on the Capitol, the Corporate Transparency Act was passed by overwhelming majorities of the US Congress as part of the annual defence spending authorisation bill. This law will, when implemented, in effect ban anonymous shell companies in the US — a favoured conduit for the world’s corrupt to launder dirty money, as Yellen referred to in her remarks.

Second, the administration means it seriously. The Treasury has issued an implementation rule for the shell company ban. Too often, in the US or elsewhere, good laws on paper have been dead letters in practice, because of loopholes or a failure to put enough resources and political support behind enforcement. This time looks different.

So weird, and not to get/stay meta all the time, but this story even hits the mythical ‘bipartisan’ note somehow, and yet still never rises to the level of the local news. Sure, it was drowned out by a coup attempt, but as the article points out, corrupted government institutions are the very things that abet anti-democratic movements. So, striking back at corruption also strikes a blow in support of liberal democracy. Sounds so quaint, but that’s where we are.

Image: Nicobar spindle shell, typically not itself a threat to democracy.

Theories about ESG investing

This is some serious inside baseball. But it IS October:

If your basic theory of ESG investing is “we will avoid bad-ESG stocks in order to drive up the cost of capital of bad-ESG things,” it seems to be working:

Years of awful returns and pressure from clients to exit from the oil-and-gas business have left fewer and smaller firms able to take advantage of rising prices and help boost production. The unwillingness of some banks to make energy loans has compounded the challenges to boosting energy supplies.

Those left are moving to increase production, but they are relatively small players who won’t be able to make a significant impact on output. Investors are steering capital away from fossil fuels and toward companies that rank high in environmental, social and governance, or ESG, measures.

“Oil-and-gas has seen the worst returns of any sector over the past five years; the returns are volatile and investors feel ESG pressures,” says Wil VanLoh, who runs Quantum Energy Partners, which manages $18 billion, making it one of the few remaining big energy private-equity funds. “There’s been a huge retreat in available capital.”

That’s from Matt Levine’s Bloomberg daily newsletter, talking game about the game. But the idea that ESG investing is maturing, as he says, is an interesting one. If companies and the courts are no longer going to just line up on the side of fiduciary responsibilities as a way to protect shareholders – and hence, the companies that may continue to pollute and spew for profit – that’s at least a change.

Image: Abraham Lincoln: Baseball Theme Currier & Ives Cartoon, 1860.

Swarms at the trough

The once-in-a-generation opportunity to repair and rebuild infrastructure across the country is also a once-in-a-not-soon-enough siren call to private equity to interrupt, disrupt and corrupt:

Legislation with the size and scope of the $4 trillion “Build Back Better” agenda is like a Bat-Signal for lobbyists, urging them to swarm Capitol Hill without delay. Literally thousands of companies, organizations, and trade groups have lobbied on one or more of the bills in this package. But one industry’s representatives keep showing up over and over again, whether in formal lobbying sessions in Congress or more informal meetings: private equity.

“At every point, private equity lines up at the trough,” said one observer close to the discussions. “There’s just somebody in every fucking meeting.”

Private equity lobbyists have multiple interests in the bills being discussed. They obviously want to keep any tax increases away from their industries, and successfully fought to keep tax hikes out of the $550 billion bipartisan infrastructure bill, which is slated for a House vote on September 27. Those tax hikes got shifted to the reconciliation package known in Washington as the Build Back Better Act, and private equity has kept up the pressure there.

But the industry has another reason to be involved in the reconciliation bill. The blueprint includes hundreds of billions of dollars in investments to expand home and community-based services for elderly and disabled people under Medicaid (initially set at $400 billion over ten years), and to provide subsidies for high-quality child care programs (set at $225 billion). Private equity happens to be deeply invested in both of these industries, with dozens of home care and child care companies in their portfolios.

So, people should just be aware. Like accounting gimmicks from the political opposition and in the media that will make $3.5T over ten years sound like too much in an +$20T per year country (narrator: it’s Not), also be advised about all the beaks dipping toward the puddle as it gets sliced and diced. Let’s not get distracted about who is doing what – or why they might be whining about it.

Like we say, a country that can drop a small SUV on Mars from a helicopter and watch it drive around in real time can afford to fix any problem – except where stupidity and corruption won’t allow it.

The Arrogance of Power

With apologies to the accusers working hard to hold their abusers to account, the impacts of human activity on global warming are taking center stage this week:

The world’s leading climate scientists on Monday delivered their starkest warning yet about the deepening climate emergency, with some of the changes already set in motion thought to be “irreversible” for centuries to come.

A highly anticipated report by the U.N.’s climate panel warns that limiting global warming to close to 1.5 degrees Celsius or even 2 degrees Celsius above pre-industrial levels “will be beyond reach” in the next two decades without immediate, rapid and large-scale reductions in greenhouse gas emissions.

To be sure, the 1.5 degrees Celsius threshold is a crucial global target because beyond this level, so-called tipping points become more likely. Tipping points refer to an irreversible change in the climate system, locking in further global heating.
At 2 degrees Celsius of global warming, the report says heat extremes would often reach critical tolerance thresholds for agriculture and health.

U.N. Secretary-General, António Guterres described the report as “a code red for humanity.”

“The alarm bells are deafening, and the evidence is irrefutable: greenhouse gas emissions from fossil fuel burning and deforestation are choking our planet and putting billions of people at immediate risk,” Guterres said.

Every previous supposed estimate had been watered down to re-assure the consensus that all of this was far enough away in time not to worry about. A little tweak here or there was all that was needed, and no time soon. Well guess what? It’s no time – soon. What are we doing and how much more can we do must be the only questions. The Earth will change and re-establish some equilibrium, and humans may or may not be a part of that. We don’t seem to understand that last part, and we’re warning ourselves that we are running out of time.

Image: A couple rides a pedal boat as smoke from nearby forest fires hangs over the city of Yakutsk, in the republic of Sakha, Siberia, on July 27, 2021.
DIMITAR DILKOFF | AFP | Getty Images

Calls coming from inside the House

May 26 – already an annual celebration chez Green – got another star on its sidewalk this year when a Dutch court case and corporate board meeting became a dessert topping that’s also a floor polish:

It started in the morning, when news came in from the Netherlands that a Dutch court ruled in a case against Shell, ordering the oil giant to cut emissions 45% by 2030 in line with the goals of the Paris Climate Agreement. The case had been brought by activists, led by Milieudefensie, the Dutch branch of Friends of the Earth. Organizers ultimately signed up 17,000 co-plaintiffs to the case and mobilized hundreds of thousands more to support the effort.

While the ruling will surely be appealed, and doesn’t go nearly far enough to address Shell’s decades of human rights and climate abuses, it’s a monumental win. It will also help validate what many have dismissed as a long shot legal strategy to hold polluters accountable for their climate crimes. I remember back in Paris in 2015 when we hosted a mock tribunal for ExxonMobil in a warehouse far from the official UN Climate Talks. To see an actual court hold Shell accountable today felt like watching our fantasies play out in real time.

The same could be said for what happened this afternoon at the ExxonMobil shareholder meeting, where an outside effort succeeded in replacing at least two of Exxon’s board of directors with candidates dedicated to decarbonizing the company. I’m honestly skeptical that a few new board members can radically reform a corporation that has long been one of the greatest barriers to climate action, but it’s still a stunning rebuke. The vote was effectively a referendum on Exxon’s business model of “drill, baby, drill,” to which investors said, “thanks, but no thanks.”

A similar thing happened (same day) with a shareholder revolt at Chevron – not overturning any policies just yet but worried about the optics of the dirty work. Some media, cough NPR cough, puzzle over this with a ‘what does it mean?’ contrariness, looking for a way to defend even the energy companies’ rights and status quo. And not to get too Cassandra about this but the dust is settling a bit differently. When the most intractable, no one to blame, just-business energy providers can be re-directed from inside, a lot more becomes possible. Money does have uses. Keep up the pressure.