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It’s hard to be angry at the virus, but it’s easy to be enraged at people and organizations who ignore the threat it poses in pursuit of profits. Last week, I wrote about the planned resumption of construction of the Keystone XL oil pipeline, and how in the process, it will put the health of Native Americans at risk by sending workers from across the country to remote rural areas. (I didn’t know then that JPMorgan Chase, the world’s largest fossil fuel lender, had issued $1 billion in bonds to help.) The same thing is happening in Canada, where tribal leaders are trying to stop construction of a gas pipeline in British Columbia. Since the coronavirus has dominated our global conversation, the Trump administration has given the oil industry a bounty by drastically reducing the mileage standards imposed by the Obama administration during its 2009 financial bailout. As public health researchers have pointed out, this will not only accelerate climate change, but will also cost at least 10,000 lives from lung damage caused by increased pollution. Similarly, the EPA announced that oil companies can keep selling more polluting “winter gas” into the spring, even though rising temperatures are increasing smog and damaging people's lungs. The U.S. Pipeline and Hazardous Materials Safety Administration has suspended enforcement of regulations because, for some reason, they don't have enough people to do the job in a country where unemployment is soaring. The team at Drilled News has compiled the most comprehensive list of these deregulations I've seen to date.
To understand the recklessness of the oil industry’s actions, it helps to recognize its dilemma. On the one hand, its products are contributing to the greatest crisis in human history: climate change. On the other hand, competitors in sectors like wind and solar power have been able to produce cheaper and better products. Consider transportation, the primary use of oil in the United States. Even without tax incentives, you can buy a new electric car for the average price of a new American car. Electric cars are much cheaper to operate, have few moving parts that break easily, and surveys show that drivers prefer electric cars to other vehicles. Or consider home heating. An air-source heat pump can save 30 percent compared to filling up oil or propane tanks. Meanwhile, chefs are increasingly turning off the gas and switching to induction cooktops. You can do the same, starting at about $50.
This transformation will not happen overnight. There is inertia in any system, but especially in the energy system. The transition from wood to coal and from coal to oil took decades, and the oil industry has been hoping for a slow transition this time around. But the pandemic may actually upend many of those assumptions. Obviously, the pandemic caused oil demand to plummet, dropping prices to near zero, and in some cases below zero. In an attempt to maintain market share, Saudi Arabia and Russia decided to enter into a devastating price war. Donald Trump announced that he would resolve the price war, but forgot to ask American producers, who seem unwilling to join the production cutback regime. The bottom line is that oil demand on the planet may have peaked as a result of the coronavirus.
But the key question for the climate crisis is really how fast the transition will happen. And the bad news is, as we've seen, the oil industry still has a lot of political influence. So activism is going to continue to be important.
Pass the microphone
Ellen Dorsey is executive director of the Wallace Global Fund, which works broadly to combat climate change. She has been a leading figure in persuading charities to divest from their fossil fuel holdings, and her most recent article on the subject was published last month. Charity Record.
You've been pushing your foundation to divest from fossil fuels for many years, but it's been a struggle at times. Why do you think that is, and is the situation changing?
To be honest, I don't understand Any Foundations still invest in fossil fuels, not to mention major foundations with missions to advance environmental justice and social change. Foundations receive charitable tax status to serve the public good. Continuing to invest in an industry that is a threat to our survival by refusing to bid on a business plan that is consistent with what is needed to protect civilization clearly violates its mission. Whatever your mission, divest, because climate change impacts everything from protecting the most marginalized to conserving biodiversity to creating educational institutions that prepare our children for the future.
Also, investing in such fuels and the people who fund them ultimately devalues the work of the grant recipients we fund. How can we allocate a small portion of our grant money to organizations that we hope will solve the problem, while investing donated assets in fossil fuels or banking with people who invest in new fossil fuels? This is a contradiction. At best.
And in addition to divesting from fossil fuels, we also need to invest in solutions: To get the world to 100% renewable energy, all institutional investors would need to invest at least 5% of their assets in renewable energy, efficiency, clean technology and energy access. Funders must place special emphasis on investing in areas not prioritized by mainstream investors.
In response to this economic crisis, investors must rebalance their portfolios. Don’t wait for fossil fuels to come back (they won’t come back), but divest now for economic and ethical reasons. Foundations that began divestment five or more years ago have consistently achieved better returns than foundations that did not. Commitments to divest and divest will boost returns, fulfill fiduciary duties, align programs and investments, and align foundation portfolios with the demands of the climate emergency.
What can philanthropists do that is particularly useful as we face this climate crisis? What can philanthropists do that governments can't?
Philanthropy, as a sector, must declare a climate emergency. We need to respond according to the scale of the problem and radically fund the global mobilization that is needed. In many ways, COVIDThe 2019-19 pandemic will show us exactly why we need to take controlled, aggressive climate action now, before we can no longer stop our climate impacts. What if the philanthropic sector and individual donors alike declared a climate emergency? We will put climate issues at the center of our mission as a cross-cutting priority that guides all our work. We will fund frontline movements and amplify their capacity to advocate for change in time. Our strategy will be guided by the goal of radical systems change, where economies are rebuilt and governments lead the way in building programs that transform infrastructure and create millions of new jobs. We will either significantly defund or spend our endowments in full to meet the needs of this critical decade. Finally, for God’s sake, we will manage the remaining assets we hold in line with science, divest from fossil fuels and invest in solutions.
Climate School
Jeff Goodell has written an excellent article on climate change and the oceans, reminding us that 70 percent of the Earth is covered in salt water, and if the oceans warm rapidly, the impacts on land will be enormous. Rolling Stone Overall, the environmental coverage is excellent; the Earth Day issue, with Shepard Fairey's reimagining of Greta Thunberg on the cover, is worth a read. (Full disclosure: this issue contains an article about JPMorgan Chase.)
Justin Guay, another longtime energy observer, argued in a Medium post that the bailout will result in a “once-in-a-generation equilibrium event that will change the energy landscape forever.” The Obama-era stimulus package helped “give birth to the modern solar industry,” so there's potential for even more to come this time around, he argues.
A 20-minute documentary produced by the Canadian Broadcasting Corporation about the life of Indigenous environmental activist Clayton Thomas-Mueller is available to stream. Though I worked with him for many years, I never really understood the context of his life, from helping sell drugs to helping stop a pipeline, until I read the draft of the memoir on which this film is based.
score board
Boulder County, Colorado, became the first county in the nation to tell insurance companies that it would take their business elsewhere if they continued to invest in or underwrite fossil fuel projects. “We cannot invest in things that are harmful to our people, our communities and our planet,” Boulder County Mayor Elise Jones said.
In the spring, obituaries have been overwhelming, but one notable death is that of Martin Cole, former president of the Third World Network, a Malaysian-born figure who was a key figure in ensuring that environmental groups understand and respect the Global South.
After a seven-year battle with frackers, a small Pennsylvania town won a major victory when a state agency upheld the application of a novel legal strategy to give nature legal rights. “To me, this has always been about the right to protect our water, our hellbender salamanders and our homes,” said a retired local elementary school teacher, referring to an ancient species that lives under rocks in the area's rivers.
Money continues to flow into “ESG” stock funds, which seek to invest based on good “environmental, social and governance” practices. One reason may be that these funds have outperformed stock indexes even as markets have crashed. “Investors believe that we need to do good for everybody, good for the world at large, so they're going to back companies that help us do that,” one strategist said. “In times of crisis, people come together.”
Warming up
Check out “Heal!”, which has been described as “a battle poem for the climate and its advocates.” It's an MIT piece that was recently premiered by the Festival Jazz Ensemble. It was composed by pianist (and doctoral student) Peter Godard, and features a fiery spoken-word section by Tiandra Rey, a 2015 MIT graduate. “The relentless rush toward wealth and comfort has torn the earth apart,” she says. “We have to change direction. We have to heal the damage.”
