Re-Tooling Demand

This Financial Times article (subscription req’d) pulls back the curtain on rain forest destruction in Brazil to let us see what – and who – it’s all for:

At the recent UN climate summit in Glasgow, more than 100 national leaders committed to halt deforestation by 2030, and 30 financial institutions, including Storebrand, promised to eliminate the harmful practice from their portfolios by 2025. However, the signatories, including Brazil, Russia and Indonesia, did not indicate how it would be implemented or tracked, and environmental campaigners remain sceptical.

ADM and Bunge are among the world’s largest traders moving Brazilian soyabeans around the world. The increase in production of the commodity, largely used for livestock feed, has been a leading cause of deforestation of the Amazon rainforest as well as the destruction of Cerrado savannah.

The scale of soyabean production on deforested land and differing standards about what qualifies as acceptable activity makes tackling its presence in supply chains challenging for companies.

Both Bunge and ADM strengthened their deforestation policies last year in response to calls from shareholders. Storebrand, together with US fund manager Green Century, tabled a proposal at Bunge’s annual meeting asking it to tighten its policies, which was backed by 98 per cent of shareholders. Bunge has said it is committed to not having soyabeans from illegally deforested land.

As much as even the big fund managers and many governments get on board with divestment and ESG priorities in managing portfolios, this really points up the issue: the companies – and countries – who burn and mine for profit just aren’t going to give it up as long as it’s profitable. The whole ‘fiduciary responsibility to shareholders’ is baked into our ethos, as long as there is money to be made, dividends to be paid, stock to buy back, whatever.

For allies in COP26 and elsewhere, the approach has to include the goal to dismantle, and then re-assemble, the demand side. It’s worth being realistic about this – otherwise, we remain [eternally? That’s optimistic – ed.] captive to supply-side economic logic. As the ADM example highlights, the companies will never lead anywhere besides mining, digging, clearing, and burning.

Image via © Ricardo Beliel/Brazil Photos/LightRocket/Getty Images

Canary in a (Saudi) Coal Mine

Not a perfect analogy, I’ll admit. But something huge seems to be brewing in the tiny island nation of Bahrain.

The king of Bahrain declared a three-month state of emergency on Tuesday as more than 10,000 protesters marched on the Saudi Arabian embassy here to denounce a military intervention by Persian Gulf countries the day before.

The entrance of foreign forces, including Saudi troops and those from other Gulf nations, threatened to escalate a local political conflict into a regional showdown;

As vulnerable as any modern dictatorship and perhaps more, Saudi Arabia welcomes no semblance of the regional revolutions that have swept away the leaders of Egypt and Tunisia. The royal family may see the writing on the wall, but sending in 1,200 troops to the tiny country with a Shia’a majority, governed by a Sunni minority and historically a part of Iran… they may need to call in a translator. The thing is, with Bahrain as longtime host to our own Navy’s Fifth Fleet, the U.S. may not have any better advice to offer. Which is awful.

The Saudis may be trying to nip this unrest in the bud, but they are just as likely to escalate it with these actions. It’s a test case/ microcosm of the situation in Saudi Arabia itself. We have armed them to the teeth over the years, sure, but made (nor attempted) few inroads with regard to Locke, Rousseau, Hobbes… much less the case of King Juan Carlos of Spain.

And this is no pass-the-popcorn moment; just go fill your car up and see.


$5 per gallon gasoline is still in your future.

The Organization of Petroleum Exporting Countries (OPEC) isbeing chaired by Iran at the moment. And Iran thinks the run-up of the price of crude to over $90 a barrel is just dandy and requires no new OPEC meetings or adjustment of production quotas among members.

Meanwhile, the US is back to using 20 million barrels a day of petroleum, an increase of 4.4 percent over last year this time. The US, the superhog of gas hogs, uses nearly a fourth the world’s daily petroleum production despite having only a twentieth of the world’s population. Increased US demand, along with rapidly growing demand in Asia, helps account for the relatively high petroleum prices. Some analysts think you could see another big run-up in oil prices in 2011 reminiscent of 2008, with gasoline prices going to $4 a gallon by this summer and then ultimately going on up to $5 a gallon.

That and everything that goes with it will be re-run from 2008. You remember that time, when the whole country gathered around the national dining room table to contemplate living closer to work, buying lighter cars and building trains? Me neither.

And good to remember that as some will scream bloody murder at $4 gas, others would be relieved at such a bargain. Evil relativism. Good thing we just elected a bunch of know-nothings deciders to lead us on all this important stuff, i.e., we’re so screwed.

Disarmament, Revolution-style

But whose?

It seems we are going force Iran to go nukuler, or insure they do, by instituting a sanctions regime. All this while effectively defanging whatever is left of that nation’s Green Revolution from last spring. Nice going.

In a 90-minute conversation here before the opening of a summit meeting on nuclear security, Mr. Obama sought to win more cooperation from China by directly addressing one of the main issues behind Beijing’s reluctance to confront Iran: its concern that Iran could retaliate by cutting off oil shipments to China. The Chinese import nearly 12 percent of their oil from Iran.

This oil dependency thing is just not going away on its own. Are we going to be where we were a couple of years ago again this summer, only a little worse, with the cyclical oil shocks rocking the fragile ‘recovering’ economy? That should be one of the real fears of the energy wall as we hit it, that instead of some sudden catastrophe it unwinds slowly at a pace that should give us plenty of time to make a shift, but we still don’t.

It’s amazing that people wonder why the leaders of Iran, or Venezuela for that matter, think they need the bomb. Do we ever send them any other signal?

Green Movement Transforming Islam?

The Green Revolution, in Iran.

To varying degrees, thinkers and theologians identified with the democratic movement have been offering a new reading of Shiism that makes the faith more amenable to democracy and secularism. The most significant innovation—found in essays, sermons, books, and even fatwas—is the acceptance of the separation of mosque and state, the idea that religion must be limited to the private domain. Some of these thinkers refuse to afford any privileged position to the clergy’s reading and rendition of Shiism–a radical democratization of the faith. And others, like Akbar Ganji and Mostafa Malekian, have gone so far as to deny the divine origins of Koran, arguing that it is nothing but a historically specific and socially marked interpretation of a divine message by the prophet. The most daring are even opting for a historicized Muhammad, searching for the first time in Shia history for a real, not hagiographic, narrative of his life.

That would be a revolt. As the article points, out, this is largely an attack on Ayatollah Khamanei and the way he was appointed by Khomeini. An elected spiritual leader changes the game and many of its names. It would be amazing if the courageous perseverance of Iranians in the street attempting to change their government resulted in changes to Islam. Changes to the one may not be possible without changing the other, but the passion and brutality on display over the last 7 months show how, I think, everyone involved understands the stakes.