Why Fossil Fuel Divestment Makes Sense

Rolling Stone has a great article looking into the logic of divestment, that is the growing trend to remove investments in fossil fuel companies and investing in renewable companies instead. On campuses around the world students have been pushing their schools to put their money where their mouth is by divesting.

It makes sense to do this as a society too. It’s not just because the current economic system is unsustainable but because it also makes economic sense.

For RBF, the logic of divestment was twofold. “There was a very clear moral impetus to do this,” Wayne says. RBF makes significant grants in the field of sustainable development, and the fund reached a breaking point with Big Carbon over what Wayne describes as “the schizophrenic notion that we had investments that were undermining our grants.”

But there was also “an economic reason for divestment,” Wayne says. RBF’s business is philanthropy. It was determined not to damage its portfolio. But as RBF scrutinized its fossil-fuel investments, it began to have concerns. One of the primary assets on an oil company’s books are its “proven reserves” – that is, the oil in the ground and beneath the oceans that will be the source of future profits. RBF questioned the wisdom of parking its money in companies that, in a low-carbon world, would not be able to bring that oil to market – “proven reserves” risked becoming “stranded assets.” RBF also balked at investing in companies that continue spending astronomical funds in the hunt for even more unburnable oil. Exxon Mobil, America’s largest oil company, despite having more than 25 billion barrels of proven reserves, sunk more than $7 billion into new exploration in 2013 alone. “There is no good reason for this vast expenditure of stockholder wealth,” wrote Longstreth. (He has also served as chairman of the finance committee of the Rockefeller Family Fund.) “It is wasted capital,” he continued, “an offense against stockholders in terms financial alone.”

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Slow Increasing Carbon Waste by Growing Cities

People living in cities have a lower carbon footprint than those in the suburbs and rural areas. Some people find this rather counter intuitive for reasons I don’t fully understand. There are researchers looking into the future of our global carbon footprint and they have concluded that if we increase the percentage of people in urban places instead of suburban/rural we can lower the rate of wasteful carbon increase.

By taking these key steps, particularly in Asia, Africa and the Middle East, the analysis concluded that the world’s cities could limit themselves to using 540 exajoules of energy in 2050 (it takes the U.S. about three weeks to produce enough crude oil to generate 1 EJ of energy). That’s a lot of energy—more than double cities’ 2005 energy demand of 240 EJ. But it’s a quarter less than the projected demand of 730 EJ under the business-as-usual scenario analyzed.

Given that most of the energy used by humanity today comes from fossil fuels, improving the energy efficiency of cities could deliver big climate benefits. Cities account for so much of the world’s energy use that a recent U.N climate report concluded they’re responsible for three quarters of yearly carbon dioxide pollution.

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China and US Agree to Cut Emissions

The world’s largest polluters have agreed that they have a problem and they need to stop it. The USA and China have come to terms with the fact that they are the worst polluters and have both decided to take action using various policy tools and joint cooperation. This is important for many reasons, for one not only does this mean the largest economies will become more efficient and less damaging to the plant. Another reason is that smaller economies (looking at you Australia and Canada) copy American policy, so hopefully the climate change denying government elsewhere will wake up and take action.

Better late than never.

According to the plan, the United States will reduce carbon emissions 26-28 percent below 2005 levels by 2025, nearly twice the existing target—without imposing new restrictions on power plants or vehicles.

Tuesday’s announcement is equally remarkable for China’s commitment. For the first time, China has set a date at which it expects its emissions will “peak,” or finally begin to taper downward: around 2030. China is currently the world’s biggest emitter of carbon pollution, largely because of its coal-dependent economy, and reining in emissions while continuing to grow has been the paramount challenge for China’s leaders

It involves a series of initiatives to be undertaken in partnership between the two countries, including:

  • Expanding funding for clean energy technology research at the US-China Clean Energy Research Center, a think tank Obama created in 2009 with Xi’s predecessor Hu Jintao.
  • Launching a large-scale pilot project in China to study carbon capture and sequestration.
  • A push to further limit the use of hydroflourocarbons, a potent greenhouse gas found in refrigerants.
  • A federal framework for cities in both countries to share experiences and best practices for low-carbon economic growth and adaptation to the impacts of climate change at the municipal level.
  • A call to boost trade in “green” goods, including energy efficiency technology and resilient infrastructure, kicked off by a tour of China next spring by Commerce Secretary Penny Pritzker and Energy Secretary Ernest Moniz.

Read more at Mother Jones.

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Bank: Toronto’s Trees Worth $7 Billion

One of Canada’s largest banks has announced that their economic research has concluded that in Toronto alone the tree canopy is worth $7 Billion (CAD). The non-monetary value of trees is obvious to most people and usually that’s enough to justify keeping trees around. However, there are people who only think in monetary terms and to those people we can now use the results of economic research to prove the greatness of trees.

If Toronto’s trees are worth $7 Billion, just imagine what the total value of trees are around the world!

It’s also well known that trees help manage temperature, both by blocking cold winds in winter, but also keeping the city cool in summer. Alexander said the net cooling effect on the city of a young, healthy tree is equivalent to 10 room-sized air conditioners, running 20 hours a day.

“On their own, these effects might seem small, but over the long term, these benefits make a significant contribution to environmental well-being,” Alexander said.

Beyond mitigating the need to belch out any more air pollution to cool the city, trees also provide an important role in storing pollutants already out there. The total amount of carbon currently stored in Toronto’s urban forest is estimated at 1.1 million tonnes — roughly the amount emitted by 700,000 cars a year.

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Carbon-Negative Energy Generation

All Power Labs sells a device that converts biomass into electric energy. Their machine, which is based on technology over 60 years old, can produce insanely cheap energy while making use of plant matter. They have units that produce 10 kW and 20 kW respectively while the wait for approval for a 100 kW version.

The company even built an experimental unit for a car that ran for quite a distance using only walnut shells. This instantly made me think of the modified Delorean in Back to the Future.

All Power Labs makes machines that use an ancient process called gasification to turn out not only carbon-neutral energy, but also a carbon-rich charcoal by-product that just happens to be a fertilizer so efficient that Tom Price, the company’s director of strategic initiatives, calls it “plant crack.”

Gasification, in which dense biomass smoldering — but not combusting — in a low-oxygen environment is converted to hydrogen gas, is nothing new. Price said that ancient cultures used it to enrich their soils, and during World War II, a million vehicles utilized the technology. But after the war, it more or less vanished from the planet, for reasons unknown. Until Mason needed a way to power his flamethrowers, that is.

All Power Labs has taken gasification and combined it with two of the Bay Area’s most valuable commodities — a rich maker culture and cutting-edge programming skills — to produce what are called PowerPallets. Feed a bunch of walnut shells or wood chips into these $27,000 machines and you get fully clean energy at less than 10 cents a kilowatt hour, a fraction of what other green power sources can cost.

Read more at CNET.

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