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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.

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I reckon

What’s the best way to get there? We need to start taking everything into consideration:

To help users find more sustainable travel options, Google launched a feature Wednesday that will show a carbon-emissions estimate for almost every flight in its search results. Now, along with price and duration, travelers will be able to use environmental footprints to compare and choose flights.

James Byers, a senior product manager on the Google travel team, said the emissions estimates are based on a combination of factors, such as the distance of a trip, the number of stops, the number and class of seats on board, the type of aircraft, and data from the European Environment Agency.

The feature, which follows another eco-friendly feature for Google’s hotel searches, could be valuable in the fight against climate change, suggests Katharine Hayhoe, director of the Climate Center at Texas Tech University.

It’s a shift in thinking, a pivot to including more of what has long been ignored. Will it catch on? Many right-wingers will surely choose the most rootin-tootin-pollutinest routes, rollin’ coal as much and for as far as they can. Many are certainly so inclined, and it may have just become easier to make them pay more for the pleasure.

For everyone else more sensible, this is potentially a good tool, allowing demand to push supply in a better direction.

Image: proposed rail network. (Not pictured, how to get North Americans to Europe, Africa, Asia)

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Leaderless democracy

No, not the kind that continues to bottle us up in debt-ceiling kabuki. The other kind:

What was the occupiers’ one demand? They never said. And as they practiced a leaderless form of democracy, there was no one to say. The movement did have a slogan, “We Are the 99 Percent,” informed by recent economics research exposing the gap between the top 1 percent and everyone else. Yet the occupiers didn’t seem particularly inspired by the technical solutions that economists proposed. When Joseph Stiglitz, the World Bank’s former chief economist and a critic of unregulated capitalism, came to Zuccotti Park to complain about how financial markets had “misallocated capital,” he looked adorably out of place in his collared dress shirt and khakis, surrounded by activists in kaffiyehs, baseball caps, and hoodies.

Journalists trying to understand this inchoate insurgency turned for answers to Graeber, a seasoned veteran of the global justice movements of the late 1990s and early 2000s and a central figure in Zuccotti Park. It helped that he was a witty commentator with a knack for summing things up crisply. He’d been the one to suggest the language of “the 99 percent,” which he’d adapted from an article by Stiglitz. Graeber was also, as some of his fellow occupiers were surprised to learn, a major anthropological theorist. Starting as an expert on highland Madagascar, Graeber had become a free-range thinker specializing in questions of hierarchy and value but interested in virtually everything. He’d recently written a 600-page ethnography of the protests against neoliberal globalization—protests he’d joined himself.

Leaderless decision-making is the route to the real possibility, messy and littered with threat and chaos though it is. And that’s just the point – Graeber was absolutely correct about the limited political horizons [most] people come to expect. And of course we are taught this, to make nice, to play well with others, even if they actively mean us harm. And make no mistake, there are actual antagonists in our midst and we’re definitely not talking about the horn-hatted, shirtless spear holders. These are people in suits, and many of the issues that stir madness within those impatient with a complicit media or corrupt pols are seen only as rounding errors by the faceless conglomerati.

No one will be allowed – that is, given permission – to do anything about climate change, income inequality or anything else. Some call it anarchy, but being stuck with oppressive systems is a refusal to re-imagine. It’s fear – fear of messes, fear of change, fear of losing security – as if. Meanwhile, tides are lapping. Leave the grand historical narrative to Marx.

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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.

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Brown ocean effect

What maps would look like if they showed only solid land. The light blue indicates swamps, marshes, and wetlands.

Hurricane Ida grew quickly powerful after just a couple of days before roaring ashore and inundating people who have seen it before and likely will again:

By the time Hurricane Ida made landfall in Port Fourchon, La., on Sunday, it was the poster child for a climate change-driven disaster. The fast-growing, ferocious storm brought 150-mile-per-hour wind, torrential rain and seven feet of storm surge to the most vulnerable part of the U.S. coast. It rivals the most powerful storm ever to strike the state.

“This is exactly the kind of thing we’re going to have to get used to as the planet warms,” said Kerry Emanuel, an atmospheric scientist at the Massachusetts Institute of Technology who studies the physics of hurricanes and their connection to the climate.

And the recent UN Climate report aside, scientists have been talking about this for years:

previous NASA-funded research by Theresa Andersen and J. Marshall Shepherd making the case that a “brown ocean effect” — evaporation from moist warm soils — can energize tropical systems.

A NASA news release on the 2013 research explained:

Before making landfall, tropical storms gather power from the warm waters of the ocean. Storms in the newly defined category derive their energy instead from the evaporation of abundant soil moisture – a phenomenon that Andersen and Shepherd call the “brown ocean.”

“The land essentially mimics the moisture-rich environment of the ocean, where the storm originated,” Andersen said.

The map above says it all, and when we look at the photos from Sunday-Monday, listen to what we tell ourselves about what we see.

Image via the New Yorker

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Suppression flimflammery as GOTV?

Well, whadya know? All the Republicans’ high profile efforts to get the attention of the people they are trying to disenfranchise is actually working!

Via our comrades at Balloon Juice.

Keep it up, state- and national-level Republicans. You can do this!

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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

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Boring work of staggering effectiveness

Right along the lines of super unexciting infrastructure fixes to crucial bridges, railways, pipes and water mains is the capping of methane-spewing oil wells, of which we have a leaky and abundant surplus:

Curtis Shuck calls the well a “super emitter,” one of many in a wheat field not far from the Canadian border, a part of Montana known as the “golden triangle” for its bountiful crops. Aside from the scattered rusty pipes and junked oil tanks, the field is splendid and vast, its horizon interrupted intermittently by power lines and grain bins. On these plains, Shuck says, you can watch your dog run away for a week.

He is a former oil and gas executive who nowadays leads a small nonprofit — the result of a personal epiphany — and is tackling global warming one well at a time. That is the approach of his Well Done Foundation, plugging this and then other orphaned sites and trapping the methane underground. The effort started in Montana in 2019 but will expand to other states before the fall.

“When we’re done, it will be like this well was never here,” Shuck said, standing upwind as cement was pumped hundreds of feet down, through a series of pipes stuck in the 7½-inch-wide hole like a straw in a juice box.

30K to cap a well. Well done, Well Done. Plant trees, install solar farms, wind farms, stop dumping sewage, limit runoff, cut back on steaks (sorry! but do), refurbish the train lines, live close to work. Listen to ‘Trane while you walk. Live a little.

What’s it going to take? All of it, every last all of it. Everything.

Image: Abandoned oil storage tanks left behind in Montana. (Adrián Sanchez-Gonzalez for The Washington Post)

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Fixing it

Notwithstanding the [late] reckoning with our very own special coup, the one we think we dodged and the very one over which Our Media is fascinated by exactly all the wrong details; the battle between Chicago and lake Michigan; and the new Gilded Age space flights for plutocrat tourists, the economy seems to have magically withstood a pandemic (Narrator: It’s not magic):

Initial unemployment claims came in at 360,000 for the week ending July 10, below the previous week’s revised read of 386,000. That reading matched the consensus forecast among economists, according to Bloomberg.

The decline in the seasonally adjusted number resumes the overall downward trend of the volatile data series after an unexpected rise in initial claims last week. The Labor Department noted that this marks a new pandemic-era low.

While the number of Americans newly filing for unemployment benefits tends to bounce around from week to week, it’s been on a general downward trend after spiking to record-shattering numbers amid the early days of the pandemic last spring. The return to that downward trend matches other data suggesting a steadily recovering labor market.

360K is still a very many lot of people, and yet you ask: after years of making sure our billionaires had enough nest eggs to color-coordinate their space suits, how was it possible to get through a year of very limited economic activity and still be able browse and sniff at the want ads and generally avoid most of the fascist tendencies on offer? Give. People. Money.

CARES and PPP run themselves out by design, which is helping people stay afloat. This is why we’re longing for vacations instead of standing in breadlines. And the infrastructure bill will bring more of this – not gifts and not luxuries – but investments in people and how we live, with recommendations for new arrangements for different needs that WE have made absolutely necessary (see Chicago example above and read the history). Move the monuments. Buy the trains. Pay the carpenters, or become one. As legend has it, the profession has a storied past.

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Self-driving boats

Since he began scamming promising people – buyers and not just buyers, but BUYERS – that full self-driving would be available in six months (2016), Elon Musk has played a vital role in one of our great national pursuits. Yes, separating people from their money. But normalizing electric cars, even with the side auto-taxi fraud, is to be lauded. Tesla definitely got the other car makers to get some skin in the game.

There are and long have been many obvious reasons behind the difficulty of self-driving cars that Musk is now copping to, but again the Overton window has been effectively shifted. Quiet electric vehicles are turning up all over the place – on land, on sea, even in the fjords:

But they’ve already made Norway the most electrified shipping nation in the world, thanks to an aggressive government push to cut maritime emissions. The country is home to almost three-quarters of the 274 vessels globally that run at least partly on batteries, according to a state advisory body. Its fleet of 31 fully-electric car ferries is expected to nearly double by the end of the year, says the Green Shipping Programme, a public-private partnership that supports the transition. Even the sightseeing ferries that cruise Norway’s famous fjords are transitioning to battery power.

On a Saturday morning in Stavanger, along Norway’s west coast, a new ferry, the Rygerelektra, is in the harbor preparing for a tour of some nearby fjords. Measuring 42 meters long with seating capacity of nearly 300, the ferry, is owned and operated by Rødne Fjord Cruises. It is among a group of vessels from several of Norway’s leading maritime companies that are driving a shift towards zero-emissions fleet and supporting Norway’s ambitious economic reinvention away from oil and gas to alternative energy source.

They acknowledge the challenges of large-scale fleet charging, though promising technology already exists. And then, they can’t resist the temptation:

“In Norway, we need to transition from oil exports to sustainable products and services, while still utilizing the competence we have gained from the oil industry, says Pia Meling, vice president of sales and marketing at Massterly, the autonomous shipping company. “We would like to compete on the renewables and in clean shipping in particular.” Massterly’s vision is one of zero-emission, autonomous vessels moving everything from passengers around Norway to containers across oceans.

Emphasis added because I guess they can’t help it. But really, who knows where the over-promise of auto-taxis might lead? Self-driving boats are certainly more possible, if not theoretically easier – at least until you get to a crowded harbor. But hey, in the open water? Sure. In six months, we’ll be…