Category Archives: climate change

The Curious Case of Larry Fink, BlackRock: He Stays, They Go

Few private citizens wield more power in America today than Larry Fink, the chief executive of BlackRock in pushing companies to embrace climate-friendly policies, that has made him a lightning rod. The firm he runs manages some $10 trillion for pension funds, endowments, governments, companies and individuals, equal to more than 10% of the world’s gross domestic product in 2020. As steward for millions of investors, BlackRock wields vast shareholder voting power, which it uses either to back managements or to prod them in new directions.

Today, Mr. Fink is telling CEOs that companies must prepare for a scale back of fossil fuels, and that the private sector should work with governments to do so. He warns of the disruption climate change could cause both the economy and financial markets, but sees historic investment opportunity in the energy shift. It’s a point he has made to conferences in Davos, Venice, Riyadh and Glasgow over the past year. Mr. Fink’s power, combined with his advocacy on a hot-button issue, has made him a flashpoint for activists, politicians and unions, both those who think BlackRock isn’t doing enough and others who say it’s doing too much…

U.S. government officials have called on Mr. Fink to help them cope with crises—the pandemic-rattled financial markets in March 2020, and, during the 2008 financial meltdown. “Treasury Secretaries and finance ministers come and go,” said David Rubenstein, the co-founder of the private-equity firm Carlyle Group Inc. “They work for someone else who can fire them tomorrow and have to build what others want them to. When you are the CEO of the biggest asset manager, you don’t have to do that.”

Excerpts from Dawn Lim Follow, Larry Fink Wants to Save the World (and Make Money Doing It), Jan. 6, 2022

Lunatics or Climate Fixers?

The ocean has already absorbed nearly one-third of the carbon emissions from human activities, and scientists hope it can shoulder even more of the burden. Ocean Iron fertilization is among the cheapest options. Ocean fertilization is a form of geoengineering  that involves adding iron to the upper layers of the ocean to stimulate phytoplankton activity  in an attempt to remove carbon from the atmosphere and, thus, abate global warming.

Photosynthetic plankton act like tropical rainforests, sucking CO2 from the atmosphere. Their populations are often limited by a scarcity of iron, which sifts into the ocean in windblown dust from deserts, in volcanic ash, and even from underwater hydrothermal vents. Extra iron would stimulate a bloom, the thinking goes, causing plankton to take up extra carbon. The carbon would sink into the depths in the form of dead plankton, or the feces or bodies of organisms that eat them. In theory, the carbon would be entombed for centuries.

Ocean scientists contended in 2021 that ocean fertilization  experiments were a priority and called for the United States to spend up to $290 million on even larger ones that would spread 100 tons of iron across 1000 square kilometers of ocean. Already, researchers next year plan to pour iron across a patch of the Arabian Sea (Center for Climate Repair at the University of Cambridge.)

But skeptics note that a recent survey of 13 past fertilization experiments found only one that increased carbon levels deep in the ocean. That track record is one reason why making iron fertilization a research priority is “barking mad,” says Wil Burns, an ocean law expert at Northwestern University. Stephanie Henson, a marine biogeochemist at the United Kingdom’s National Oceanography Centre, also worries about surprise consequences of the approach, likening it to the catastrophic introduction of rabbits to Australia ecology. “You could just imagine something like that happening in the oceans completely by accident.”

Excerpts from Warren Cornwall, To Draw Carbon, Ocean Fertilization Gets Another Look, Science, Dec. 17, 2021

The Other Middle East Crisis: Rivers are Drying

Protests in the Iranian city of Isfahan erupted in November 2021 due to a severe shortage of water, as the region continues to suffer from a year of low rainfall and drought. Thousands of farmers and others who supported them took to the streets in Isfahan in central Iran, expressing their dissatisfaction at the water shortages and urging the government to solve the crisis. They shouted “let Isfahan breathe again, revive Zayandeh Rud,” referring to the dried river which supplies their crops with water.

The drying up of the Zayandeh Rud river has not only been caused by drought, however, but also by the government’s diversion of water from the river to supply other areas and with a pipeline supplying water to Yazd province also having been damaged. Those incidences have contributed to the farms being left dry and the famers’ livelihoods being threatened.

The water shortages and the drying of the river come at a time when the region is suffering from a similar shortage, as rainfall has been low and temperatures have increased to make it one of the hottest and driest years recorded. ..Neighboring Iraq and Syria have also been expressed concern over the shortage of water this year… In November 201, a major reservoir in Syria also dried up completely, and was similarly due to a combination of climatic and structural causes.

Excerpts from Protests over water shortages erupt in Iran, as river dries up, Middle East Monitor, Nov. 21, 2021

Israel’s Preemptive Attacks on Chemical Weapons, Syria

Israel twice struck chemical weapons facilities in Syria between 2020 and 2021 in a campaign to prevent Syria from renewing chemical weapons production…Syria’s government denies using chemical arms. In 2013 it promised to surrender its chemical weapons, which it says it has done.

On June 8, 2021, Israeli jets hit three military targets near the cities of Damascus and Homs, all linked to Syria’s former chemical weapons program. In March 2020, Israel targeted a villa and compound tied with the procurement of a chemical that can be used in nerve agents. Whether Israel’s attacks were fully successful in disrupting Syria’s plans is unclear. Israeli officials intended the strikes to be preemptive, knocking out the country’s production capabilities before actual weapons could be made…

Excerpts from Israel hit chemical weapons facilities in Syria over past two years, Reuters, Dec. 13, 2021

Why Crabs and Mussels Love Plastic Pollution

The “Great Pacific Garbage Patch,” is considered the world’s largest accumulation of ocean plastic. It’s so massive, in fact, that researchers found it has been colonized by species — hundreds of miles away from their natural home. The research, published in the journal Nature, found that species usually confined to coastal areas — including crabs, mussels and barnacles — have latched onto, and unexpectedly survived on, massive patches of ocean plastic.  As suitable habitat made of plastics now exists in the open ocean, coastal organisms can both survive at sea for years and reproduce, leading to self-sustaining coastal communities on the high seas!

But the mingling of the neuston and coastal species is “likely recent,” researchers said, and was caused largely because of the accumulation of “long-lived plastic rafts” that have been growing since the middle of the 20th century. Just by itself, the Great Pacific Garbage Patch, located between California and Hawai’i, is estimated to have at least 79,000 tons of plastic within a 1.6 million-square-kilometer area. There are at least four other similar patches throughout the world’s oceans. Researchers expect that plastic waste is going to “exponentially increase,” and by 2050, there will be 25,000 million metric tons of plastic waste.  

For lead author Linsey Haram, the research shows that physical harm to larger marine species should not be the only concern when it comes to pollution and plastic waste. “The issues of plastic go beyond just ingestion and entanglement,” Haram said in a statement. “It’s creating opportunities for coastal species’ biogeography to greatly expand beyond what we previously thought was possible.” 

But that expansion could come at a cost. “Coastal species are directly competing with these oceanic rafters,” Haram said. “They’re competing for space. They’re competing for resources. And those interactions are very poorly understood.” There is also a possibility that expansions of these plastic communities could cause problems with invasive species. A lot of plastic found in the Great Pacific Garbage Patch, for example, is debris from the 2011 Tohoku tsunami in Japan, which carried organisms from Japan to North America. Over time, researchers believe, these communities could act as reservoirs that will provide opportunities for coastal species to invade new ecosystems. 

There are still many questions researchers say need to be answered about these new plastic-living communities — like how common they are and if they can exist outside the Great Pacific Garbage Patch — but the discovery could change ocean ecosystems on a global scale, especially as climate change exacerbates the situation. 

Excerpts from LI COHEN, There’s so much plastic floating on the ocean surface, it’s spawning new marine communities, CBS News, Dec. 2, 2021
BY LI COHEN

The Limits of Green Energy: Wind Blades of Wood and Plastic

What does the deforestation of balsa wood in Ecuador’s Amazon region have to do with wind power generation in Europe? There is a perverse link between the two: a drive for renewable energy has boosted global demand for a prized species of wood that grows in the world’s largest rainforest. As Europe and China increase the construction of blades for wind turbines, balsa trees are being felled to accelerate an energy transition driven by the need to decarbonize the global economy.

In the indigenous territories of the Ecuadorian Amazon, people began to notice an uptick in international demand for balsa wood from 2018 onwards. Balsa is very flexible but tough at the same time, and offers a light yet durable option for long-term wind power production. The typical blades of a wind turbine are currently around 80 meters long, and the new generation of blades can extend up to 100 meters. That means about 150 cubic meters of wood are required to build a single unit, according to calculations by the United States National Renewable Energy Laboratory.

Ecuador is the world’s main exporter of balsa wood, holding 75% of the global market. Major players include Plantabal S.A. in Guayaquil, which has around 10,000 hectares dedicated to the cultivation of balsa wood destined for export. With the boom in demand starting in 2018, this company and many others struggled to cope with the quantity of international orders. This increase has led directly to the deforestation of the Amazon. Irregular and illegal logging has proliferated by those who have reacted to the scarcity of wood grown for timber by chopping down the virgin balsa that grows on the islands and riverbanks of the Amazon

The impact on the indigenous people who live in the area has been as devastating as mining, oil and rubber were in their day…The Amazon’s defenders are calling for the wind turbine industry to implement strict measures to determine the origin of the wood used in turbine blades, and to prevent market pressure leading to deforestation. Ultimately, they say, balsa wood should be replaced by other materials…

In 2019, Ecuador’s balsa exports were worth almost €195 million, 30% more than the previous record from 2015. In the first 11 months of 2020, this jumped to €696 million.

Wind turbine blades are mainly made from polymethacrylamide (PMI) foam, balsa wood and polyethylene terephthalate (PET) foam…But The Spanish-German company Siemens-Gamesa..has  introduced blade designs using PET only, other competitors soon followed. Wood Mackenzie, a consultancy firm, forecasts that this “will increase from 20% in 2018 to more than 55% in 2023, while demand for balsa will remain stable…”

Today’s blades also present a problem for recycling. The first generation of wind turbines are reaching the end of their lives, and thousands will need to be dismantled… “But the blades represent a challenge due to their composite materials, as their recycling requires very specific processes…

Excerpts from How the wind power boom is driving deforestation in the Amazon, ElPais, Nov. 26, 2021

Exchanging Nature for Crushing Debt

In 2020 tourism in Belized dried up, growth contracted sharply and public debt jumped from just under 100% GDO in 2019 to over 125%. That forced Belize,  into a debt restructuring…As part of the deal, concluded on November 5th, 2021 Belize bought back its only international bond, a $553m, at 55 cents on the dollar. It funded that with $364m of fresh money, arranged by The Nature Conservancy, an NGO, which is insured by the International Development Finance Corp, an American agency. The transaction is backed by the proceeds of a “blue bond” arranged by Credit Suisse, a bank. The payback is due over 19 years. It is called a blue bond because Belize has pledged to invest a large chunk of the savings into looking after the ocean. That includes funding a $23m endowment to support future marine-conservation projects and promising to protect 30% of its waters by 2026…

Debt-for-nature swaps are nothing new. Lenders have been offering highly indebted countries concessions in return for environmental commitments for decades. But these transactions have historically involved debt owed to rich countries, not commercial bondholders. As Lee Buchheit, a lawyer who specialises in sovereign-debt restructurings, points out, they were “negligible in size”. In total, the value of debt-for-climate and nature-swap agreements between 1985 and 2015 came to just $2.6bn, according to the United Nations Development Programme. Of the 39 debtor nations that benefited from the swaps, only 12 negotiated debts of over $30m. “It was really an exercise in public relations,” Mr Buchheit says….

Other poor countries are trying to move in the same direction. At the COP26 climate summit in Glasgow Ecuador’s president Guillermo Lasso proposed enlarging the country’s Galapagos nature reserve through a debt-for-nature swap…Yet no amount of creative dealmaking can distract from the grim truth: many emerging markets still suffer from crushing debts.

Excerpts from Debt-for Nature Swaps: Reef relief, Economist, Nov. 13, 2021

No Matter What they Say-Nobody Likes Nuclear Waste

The first stage of the process has been under way since November 2020 for the town of Suttsu and the village of Kamoenai assessing two municipalities in Hokkaido for their suitability to host a final disposal facility for high-level radioactive waste from nuclear power plants.  Under the government’s plan, the first-stage surveys take two years and will be followed by the second phase… which will include geophysical exploration, geological reconnaissance surveys and drilling surveys. Already stories about divisions and conflict over the surveys are emerging from the local communities.

The mayoral election of Suttsu in October 2021, for example, turned into a bitter and divisive political battle over the issue between the incumbent who decided to apply for the first-phase survey and a challenger who ran on opposition to the project. Some of the neighboring municipalities have enacted an ordinance to ban the entry of radioactive materials. Both the Hokkaido prefectural government and most of the local administrations around the two municipalities have declined to accept state subsidies related to the surveys. These actions have been driven by the fear that accepting the surveys will set in motion an unstoppable process leading to a permanent repository for nuclear waste.

The NUMO (Nuclear Waste Management Organization of Japan) and the METI (Ministry of Economy, Trade and Industry)  have jointly held more than 100 meetings to explain the plan to local communities across the nation. Even though they have continued calling for localities to volunteer, no local governments except for the two in Hokkaido have responded.

Excerpts from Entire nation should share in disposal of spent nuke fuel, Asahi Shimbun, Nov. 22, 2021

The Right to Know from Space

Rebuilding an entire planet’s energy system is a big job…The most basic problem is knowing what, exactly, you are trying to rebuild. Academic-research groups, think-tanks, charities and other concerned organizations try to keep track of the world’s wind turbines, solar-power plants, fossil-fueled power stations, cement factories and so on. To this end, they rely heavily on data from national governments and big companies, but these are often incomplete. The most comprehensive database covering American solar-power installations, for instance, is thought to miss around a fifth of the photovoltaic panels actually installed on the ground.

In a paper published in Nature, a team of researchers demonstrate another way to keep tabs on the green-energy revolution. Dr Kruitwagen and his colleagues have put together an inventory of almost 69,000 big solar-power stations (defined as those with a rated capacity of 10kw of electricity or more) all over the world—more than four times as many as were previously listed in public databases. This new inventory includes their locations, the date they entered service and a rough estimate of their generating capacity…

Pictures came from two sets of satellites, Sentinel-2 and SPOT, run by the European Space Agency and Airbus respectively. These peer down on the world, recording visible light and also the infrared and ultraviolet parts of the spectrum. The images amounted to around 550 terabytes of data, spanning the period between 2016 and 2018. That is enough to fill more than a hundred desktop hard drives. Sifting through this many pictures by eye would have been impractical. That is where the second technological trend comes in. Dr Kruitwagen and his colleagues trained a machine-learning system to spot the solar panels for them.

More generally, Dr Kruitwagen hopes that his eye-in-the-sky approach—which, despite the planetary scale of the project, cost only around $15,000 in cloud-computing time—could presage more accurate estimates of other bits of climate-related infrastructure, such as fossil-fuel power stations, cement plants and terminals for ships carrying liquefied natural gas. The eventual result could be the assembly of a publicly available, computer-generated inventory of every significant bit of energy infrastructure on Earth. Quite apart from such a model’s commercial and academic value, he says, an informed public would be one better able to hold politicians’ feet to the fire. 

Excerpt from Solar-cell census: An accurate tally of the world’s solar-power stations, Economist, Oct. 30, 2021

A Breach Too Far: 413 PPM

The abundance of heat-trapping greenhouse gases in the atmosphere once again reached a new record in 2021, with the annual rate of increase above the 2011-2020 average. That trend has continued in 2021, according to the World Meteorological Organization (WMO) Greenhouse Gas Bulletin.

Concentration of carbon dioxide (CO2), the most important greenhouse gas, reached 413.2 parts per million in 2020 and is 149% of the pre-industrial level. Methane (CH4) is 262% and nitrous oxide (N2O)  is 123% of the levels in 1750 when human activities started disrupting Earth’s natural equilibrium.

Roughly half of the CO2 emitted by human activities today remains in the atmosphere. The other half is taken up by oceans and land ecosystems. The Bulletin flagged concern that the ability of land ecosystems and oceans to act as “sinks” may become less effective in future, thus reducing their ability to absorb carbon dioxide and act as a buffer against larger temperature increase…Such changes are already happening, for example, transition of the part of Amazonia from a carbon sink to a carbon source

The Bulletin shows that from 1990 to 2020, radiative forcing – the warming effect on our climate – by long-lived greenhouse gases increased by 47%, with CO2 accounting for about 80% of this increase…The amount of CO2 in the atmosphere breached the milestone of 400 parts per million in 2015. And just five years later, it exceeded 413 ppm. 

“Carbon dioxide remains in the atmosphere for centuries and in the ocean for even longer. The last time the Earth experienced a comparable concentration of CO2 was 3-5 million years ago, when the temperature was 2-3°C warmer and sea level was 10-20 meters higher than now. But there weren’t 7.8 billion people then,” said Prof. Taalas.

Excerpt from Greenhouse Gas Bulletin: Another Year Another Record, WMO, Oct. 25, 2021

Repairing Damaged Coral Reefs

Rather than blocking waves, as a sea wall does, a reef slows them, dissipating their energy before they reach land. One estimate, from the University of California, Santa Cruz and the Pacific Coastal and Marine Science Centre, suggests natural reefs prevent $1.8bn a year of flood damage in America alone.

While natural reefs take centuries to grow, hybrid versions can be conjured up in months. The idea began with Wolf Hilbertz, an architect with an interest in marine biology. In the 1970s Hilbertz developed a technique that uses submerged electrodes to run electrical currents through seawater. This precipitates calcium carbonate and magnesium hydroxide out of the seawater, forming limestone similar to that of natural reefs. The artificial reef can become the substrate upon which a natural coral ecosystem develops…Later work with Thomas Goreau, a marine biologist, produced both a catchy name—“Biorock”—and the idea of using the stuff as the basis of coral reefs, and, in particular, for repairing damaged reefs.

In 1996 the Global Coral Reef Alliance, a charity, began using Biorock for reef repairs by growing a six-metre structure in the Maldives. Other repairs have followed in Indonesia, Jamaica and Mexico. The Pemuteran Coral Reef Restoration Project, in Bali, is more than 300 metres long and includes dozens of “nurseries” in which Biorock acts as nuclei for the natural extension of the reef….DARPA a research agency run by America’s Department of Defense, also sees hybrid reefs as a means of coastal defence—in this case protecting the country’s seaside military installations. Lori Adornato, head of DARPA’s “Reefense” project, says the goal is a hybrid reef-type system which will be maintenance-free and self-repairing. Reefense therefore involves not only creating reefs and measuring their effectiveness, but also attracting and fostering appropriate organisms to sustain the reefs’ health, ensuring they can survive even when natural reefs are suffering.

Excerpts from Ocean Reefs: Hybrid Vigor, Economist, Sept. 11, 2021

How to Relocate a Whole Nation

Small island states will not, most likely, be swallowed by the sea… In research published in 2010, Paul Kench measured the size of 27 atolls over a period of decades and found that while 14% had shrunk and a couple had disappeared, 43% stayed the same size and another 43% became bigger. Many of the ring-shaped coral reefs have been able to adapt to sea-level rise, changing shape as sediment is eroded and pushed around. Tuvalu’s land surface, for instance, increased by 3% between 1971 and 2014 despite a rise in the local sea level of 4mm a year, twice the global average for that period…

But there are other, more immediate effects of climate change that threaten the lives and livelihoods of the citizens of these countries. They are less arresting, harder to explain and, as in the changing shape and size of islands, sometimes counterintuitive. But the upshot is the same: the countries may soon become uninhabitable.

One is “king tides”, high tides that briefly but entirely inundate the narrow strips of low-lying land that comprise most atoll, are becoming more frequent. The saltwater can kill crops such as banana and papaya and seeps into groundwater, making it unfit to drink

There are also ways to keep islands habitable: Kiribati plans to dredge its lagoons and use the sand to raise the surrounding islands higher above the sea. Tuvalu has embarked on a land-reclamation project. But the spectre of climate change makes it harder to drum up investment for such schemes. “I am trying to change the minds of the many people who say, ‘We cannot invest in your country, you’re finished’,” says Kiribati’s Mr Tito.

The depressing long-term solution may be to move. The Marshall Islands hopes to renegotiate its post-colonial “Compact of Free Association” with America, which expires in 2023, to ensure a permanent right of residence in the United States for all Marshallese. Tuvalu has no such option. Maina Talia, a climate activist, thinks that the government should take Fiji up on its offer of a home where Tuvaluans could practice the same culture rather than “be dumped somewhere in Sydney’‘.

Earlier this year, the government of Tuvalu, which until recently insisted that there would be no Plan B, established a new un initiative. Its aim is to work with “like-minded countries” to figure out how and where such countries could be relocated, how they could continue to function ex-situ, and whether they could still lay claim to vast exclusive economic zones if their land disappeared under water.

Relocating a country would raise other big questions, too, for both the international system and the way in which people think about statehood. “How to prepare to move a nation in dignity, that has never been done before,” says Kamal Amakrane, a migration expert whose ideas helped spark the UN initiative. 

Excerpt from Moving story: Pacific countries face more complex problems than sinking, Economist, August 7, 2021

The Northern Frontier: Who’s Taking Advantage of Climate Change?

Owing to climate change…the share of boreal land that can support farming could increase from 8% to 41% in Sweden. It could increase from 51% to 83% in Finland. Efforts to farm these areas will alarm people who value boreal forests for their own sake. And cutting down such forests and ploughing up the soils that lie beneath them will release carbon. But the climatic effects are not as simple as they might seem. Northern forests absorb more heat from the sun than open farmland does, because snow-covered farmland reflects light back into space…

The fact that felling boreal forests may not worsen climate change, though, says nothing about the degree to which it could affect biodiversity, ecosystem services or the lives of forest dwellers, particularly indigenous ones.

Some governments are already keen to capitalize on climate change. Russia’s has long talked of higher temperatures as a boon. President Vladimir Putin once boasted that they would enable Russians to spend less money on fur coats and grow more grain. In 2020 a “national action plan” on climate change outlined ways in which the country could “use the advantages” of it, including expanding farming. Since 2015 Russia has become the world’s largest producer of wheat, chiefly because of higher temperatures.

Russia’s government has started leasing thousands of square kilometers of land in the country’s far east to Chinese, South Korean and Japanese investors. Much of the land, which was once unproductive, is now used to grow soybeans. Most are imported by China, helping the country reduce its reliance on imports from America. Sergey Levin, Russia’s deputy minister of agriculture, has predicted that soya exports from its far-eastern farmlands may reach $600m by 2024. That would be nearly five times what they were in 2017. The government of Newfoundland and Labrador, a province on the north-eastern tip of Canada, is also trying to promote the expansion of agriculture into lands covered by forests…

All told, the northern expansion of farmland will only go some way towards mitigating the damage climate change may do to agriculture. The societies that will benefit from it are mostly already wealthy. Poor places, which rely much more heavily on income from exporting agricultural produce, will suffer.

Excerpts from Farming’s New Frontiers: Agriculture, Economist, August 28, 2021

When the Cat’s Away the Mice Pollute

Police don’t share schedules of planned raids. Yet America’s Environmental Protection Agency (EPA) does not seem convinced of the value of surprise in deterring bad behavior. Every year it publishes a list of dates, spaced at six-day intervals, on which it will require state and local agencies to provide data on concentrations of harmful fine particulate matter (pm2.5), such as soot or cement dust…

A new paper by Eric Zou of the University of Oregon makes use of satellite images to spy on polluters at times when they think no one is watching. NASA, America’s space agency, publishes data on the concentration of aerosol particles—ranging from natural dust to man-made toxins—all around the world, as seen from space. For every day in 2001-13, Mr Zou compiled these readings in the vicinity of each of America’s 1,200 air-monitoring sites.

Although some stations provided data continuously, 30-50% of them sent reports only once every six days. For these sites, Mr Zou studied how aerosol levels varied based on whether data would be reported. Sure enough, the air was consistently cleaner in these areas on monitoring days than it was the rest of the time, by a margin of 1.6%. Reporting schedules were almost certainly the cause….The size of this “pollution gap” differed by region. It was biggest in parts of Appalachia and the Midwest with lots of mining, and in the northern Mountain West, where paper and lumber mills are common.

The magnitude of the gap also depended on the cost of being caught. Every year, the EPA produces a list of counties whose average air quality falls below minimum standards. The punishments for inclusion are costly: factories become subject to burdensome clean-technology requirements, and local governments can be fined. When firms risked facing sanctions, they seemed to game the system more aggressively. In counties that exceeded the pm2.5 limit in a given month, the pollution gap in the following month swelled to 7%. In all other cases, it was just 1.2%….

Excerpts from Poorly devised regulation lets firms pollute with abandon: We Were Expecting you, Economist, Sept. 4, 2021

How to Suck Carbon and Convert it to Rocks

The Orca carbon-capture plant, just outside Reykjavik in Iceland, has switched on its fans and began sucking carbon dioxide from the air since September 2021. The sound was subtle—a bit like a gurgling stream. But the plant’s creators hope it will mark a big shift in humanity’s interaction with the climate. Orca is, for now, the largest installation in the infant “direct air capture” industry, which aims to remove CO2 from the atmosphere. When sealed underground such CO2 counts as “negative emissions”—an essential but underdeveloped method for tackling global warming.

Thus, the full operation extracts CO2 from air and turns it to rock. Trials have shown that Icelandic basalts can sequester CO2 in solid rock within two years. Power comes from a nearby geothermal power station….One catch is volume. Orca will capture 4,000 tonnes of carbon dioxide a year, out of around 35bn tonnes produced by burning fossil fuels. Another is cost. It costs Orca somewhere between $600-800 to sequester one tonne of carbon dioxide, and the firm sells offset packages online for around $1,200 per tonne. The company thinks it can cut costs ten-fold through economies of scale. But there appears to be no shortage of customers willing to pay the current, elevated price. Even as Orca’s fans revved up, roughly two-thirds of its lifetime offering of carbon removals had already been sold. Clients include corporations seeking to offset a portion of their emissions, such as Microsoft, Swiss Re as well as over 8,000 private individuals.

Climeworks is not alone in having spotted the opportunity. Using different chemistry, Carbon Engineering, a Canadian company, is gearing up to switch on its own carbon-scrubbing facilities. It will take more than these pioneer engineers and financiers to build a gigatonne-sized industry. But the fans are turning. 

Excerpts from Removing carbon dioxide from the air: The world’s biggest carbon-removal plant switches on, Economist, Sept. 18, 2021

The $22 Trillion Global Carbon Market

Two of the world’s biggest oil companies, Royal Dutch Shell  and BP already have significant carbon-emissions trading arms, thanks to a relatively well-developed carbon market in Europe. Big carbon emitters such as steel producers receive emission allowances, and can buy more to stay under European emissions guidelines. Companies that fall below those limits can sell their excess carbon-emissions allowances.

Carbon traders get in the middle of those transactions, seeking to profit from even small moves in the price of carbon and sometimes betting on the direction of prices. The value of the world’s carbon markets—including Europe and smaller markets in places such as California and New Zealand—grew 23% last year to €238 billion, equivalent to $281 billion.

That is small compared with the world’s multitrillion-dollar oil markets and to other heavily traded energy markets, such as natural gas or electricity. But growth potential exists, the industry says. Wood Mackenzie, an energy consulting firm, estimates a global carbon market could be worth $22 trillion by 2050… An experienced carbon trader’s base salary can be roughly $150,000 to $200,000, although a lot of compensation occurs via bonuses, traders said…. BP’s overall annual trading profits were between $3.5 billion and $4 billion during the past two years, according to a person familiar with the matter.

Excerpts from Sarah McFarlane, Energy Traders See Big Money in Carbon-Emissions Markets, WSJ, Sept. 9, 2021

Measuring Methane Emissions

The American gas industry faces growing pressure from investors and customers to prove that its fuel has a lower-carbon provenance to sell it around the world. That has led the top U.S. gas producer, EQ , and the top exporter, Cheniere Energy to team up and track the emissions from wells that feed major shipping terminals. The companies are trying to collect reliable data on releases of methane—a potent greenhouse gas increasingly attracting scrutiny for its contributions to climate change—and demonstrate they can reduce these emissions over time.

“What we’re trying to really do is build the trust up to the end user that our measurements are correct,” said David Khani, EQT’s chief financial officer. “Let’s put our money where our mouth is.” Natural gas has boomed world-wide over the past few decades as countries moved to supplant dirtier fossil fuels such as coal and oil. It has long been touted as a bridge to a lower-carbon future. But while gas burns cleaner than coal, gas operations leak methane, which has a more potent effect on atmospheric warming than carbon dioxide, though it makes up a smaller percentage of total greenhouse gas emissions.

Investors, policy makers and buyers of liquefied natural gas, known as LNG, are rethinking the fuel’s role in their energy mix …Those concerns, pronounced in Europe and increasingly in Asia, are a problem for LNG shippers, as some of their customers signal plans to ease gas consumption over time…Nearly every industry now faces some pressure to reduce its carbon footprint, as investors focus more on ESG—or environmental, social and governance—issues and push companies for trustworthy emissions data. But the pressure has become particularly acute for oil-and-gas companies, whose main products contribute directly to climate change.

The companies and researchers plan to test drones, specialized cameras that can see methane gas, and other technologies across about 100 wells in the Marcellus Shale in the northeast U.S., the Haynesville Shale of East Texas and Louisiana, and the Permian Basin of West Texas and New Mexico. EQT has said it would spend $20 million over the next few years to replace leaky pneumatic devices, which help move fluids from wells to production facilities and water tanks, with electric-drive valves, executives said. They expect that will cut about 80% of the company’s methane emissions. The company also began exclusively using electric-powered hydraulic fracturing equipment last year.

Excerpts from Collin Eaton Frackers, Shippers Eye Natural-Gas Leaks as Climate Change Concerns Mount, WSJ, Aug. 13, 2021

Amazon Deforestation: Putting a Number on Climate Damage

In April 2021, the Brazilian Federal Public Prosecutor’s Office filed a public civil action against a rural landowner, seeking the landowner’s accountability for alleged illegal deforestation connected to breeding cattle in the Amazon….Aside from demanding compensation for environmental damages, collective damages, as well as compensation due to the profits illegally obtained in the logging process, the prosecutor required that the defendant pay compensation for climate damages resulting from the deforestation, something until now unwitnessed in cases of this sort in Brazil. N

By employing a carbon calculator software developed by IPAM, the Amazonian Research Institute, the Prosecutor’s Office calculated how much carbon was expected to have been released into the atmosphere per hectare of deforestation in that particular area. With that information, knowing the extension of the deforestation and using the carbon pricing practiced by the Amazon Fund, the Prosecutor’s Office came to the conclusion that the defendant was liable for a BRL 44.7 million compensation for climate damages.

Excerpts from Climate litigation in Brazil: new strategy from prosecutors on climate litigation against private entities, Mayer/Brown, June 21, 2021

The Dirty Secrets of Clean Energy

Solar panel installations are surging in the U.S. and Europe as Western countries seek to cut their reliance on fossil fuels. But the West faces a conundrum…: Most of them are produced with energy from carbon-dioxide-belching, coal-burning plants in China.

Concerns are mounting in the U.S. and Europe that the solar industry’s reliance on Chinese coal will create a big increase in emissions in the coming years as manufacturers rapidly scale up production of solar panels to meet demand. That would make the solar industry one of the world’s most prolific polluters, analysts say, undermining some of the emissions reductions achieved from widespread adoption. For years, China’s low-cost, coal-fired electricity has given the country’s solar-panel manufacturers a competitive advantage, allowing them to dominate global markets.

Chinese factories supply more than three-quarters of the world’s polysilicon, an essential component in most solar panels, according to industry analyst Johannes Bernreuter…Producing a solar panel in China creates around twice as much carbon dioxide as making it in Europe, said Fengqi You, professor of energy systems engineering at Cornell University.

Some Western governments and corporations are attempting to shift the solar industry away from coal…These policies would also help rebuild the West’s solar industry, which has withered under competition from higher-polluting Chinese producers, Western executives say…China has pushed down the price of panels so sharply that solar power is now less expensive than electricity generated from fossil fuels in many markets around the world. Imports of the solar cells that make up the panels are also flooding into the U.S. and Europe. Those shipments are either coming directly from China or contain key components made in China. “If China didn’t have access to coal, then solar power wouldn’t be cheap now,” said Robbie Andrew, a senior researcher at the Center for International Climate Research in Oslo. “Is it OK that we’ve had this huge bulge of carbon emissions from China because it allowed them to develop all these technologies really cheaply? We might not know that for another 30 to 40 years.”

Excerpts from Matthew Dalton, Behind the Rise of U.S. Solar Power, a Mountain of Chinese Coal, July 31, 2021

The Trillion Dollar Mess: Taking Down the Oil Infrastructure

Some of the world’s largest oil companies have been ordered to pay part of a $7.2 billion tab to retire hundreds of aging wells in the Gulf of Mexico that they used to own, capping a case that legal experts say is a harbinger of future battles over cleanup costs.

A federal judge ruled last month that Fieldwood Energy a privately held company that currently controls the old wells and had sought bankruptcy protection, could pass on hundreds of millions of dollars in environmental liabilities to prior owners and insurers of the wells as part of its reorganization plan. Exxon Mobil,  BP, Hess , Royal Dutch Shell and insurance companies had objected to the plan. The dispute, litigated for months in federal bankruptcy court in Houston, centered over who should bear the enormous costs of capping and abandoning wells, primarily in the shallow waters of the Gulf of Mexico where an oil spill could wreak havoc. The companies could still appeal the ruling…

Jason Bordoff, founding director of Columbia University’s Center for Global Energy Policy said that the expenses to decommission oil-and-gas infrastructure world-wide will in the trillions of dollars. “Who bears the costs?” he said. “There will be people who want to pass the buck.”

BP and Shell have pledged to reduce their carbon emissions to zero by 2050. To accomplish that, those companies will have to sell off some oil-and-gas wells to get their related emissions off their books, say energy analysts. But such asset sales present huge risks for big oil companies because many of the buyers are smaller, privately held firms, like Fieldwood, which may not have the financial wherewithal to bear cleanup costs, Ms. Usoro said. This was Fieldwood’s second bankruptcy in two years.

These smaller companies buy the wells for pennies on the dollar and assume the cleanup expenses in the hope that they can reduce the assets’ cost structure and squeeze out the remaining barrels of oil profitably. “I’ve always questioned this business model,” said Ms. Usoro. “Are these guys able to take care of the end of life?”

Excerpts Christopher M. Matthews, Oil Companies Are Ordered to Help Cover $7.2 Billion Cleanup Bill in Gulf of Mexico, WSJ, July 6, 2021

From Natural Landmark to an Oil Spill Wasteland

Mohammad Abubakar, Minister of Environment  disclosed in July 2021 that Nigeria recorded 4,919 oil spills between 2015 to March 2021 and lost 4.5 trillion barrels of oil to theft in four years.

Mr Abubakar disclosed this at a Town Hall meeting in Abuja, organised by the Ministry of Information and Culture, on protecting oil and gas infrastructure. “The operational maintenance is 106, while sabotage is 3,628 and yet to be determined 70, giving the total number of oil spills on the environment to 235,206 barrels of oil. This is very colossal to the environment.

“Several statistics have emphasised Nigeria as the most notorious country in the world for oil spills, loosing roughly 400,000 barrels per day. “The second country is followed by Mexico that has reported only 5,000 to 10,000 barrel only per day, thus a difference of about 3, 900 per cent.

“Attack on oil facilities has become the innovation that replaced agitations in the Niger Delta region against perceived poor governance and neglect of the area.

Excerpts from Nigeria Records 4,919 Oil Spills in 6 Years, 4.5trn Barrels Stolen in 4 Years, AllAfrica.com, July 6, 2021

Green Con Artists and their Moneyed Followers

Green investing has grown so fast that there is a flood of money chasing a limited number of viable companies that produce renewable energy, electric cars and the like. Some money managers are stretching the definition of green in how they deploy investors’ funds. Now billions of dollars earmarked for sustainable investment are going to companies with questionable environmental credentials and, in some cases, huge business risks. They include a Chinese incinerator company, an animal-waste processor that recently settled a state lawsuit over its emissions and a self-driving-truck technology company.

One way to stretch the definition is to fund companies that supply products for the green economy, even if they harm the environment to do so. In 2020 an investment company professing a “strong commitment to sustainability” merged with the operator of an open-pit rare-earth mine in California at a $1.5 billion valuation. Although the mine has a history of environmental problems and has to bury low-level radioactive uranium waste, the company says it qualifies as green because rare earths are important for electric cars and because it doesn’t do as much harm as overseas rivals operating under looser regulations…

When it comes to green companies, “there just isn’t enough” to absorb investor demand…In response, MSCI has looked at other ways to rank companies for environmentally minded investors, for example ranking “the greenest within a dirty industry”….

Of all the industries seeking green money, deep-sea mining may be facing the harshest environmental headwinds. Biologists, oceanographers and the famous environmentalist David Attenborough have been calling for a yearslong halt of all deep-sea mining projects. A World Bank report warned of the risk of “irreversible damage to the environment and harm to the public” from seabed mining and urged caution. More than 300 deep-sea scientists released a statement today calling for a ban on all seabed mining until at least 2030. In late March 2021, Google, battery maker Samsung SDI Co., BMW AG and heavy truck maker Volvo Group announced that they wouldn’t buy metals from deep-sea mining.

[However the The Metals Company (TMC) claims that deep seabed mining is green].

Excerpts from Justin Scheck et al, Environmental Investing Frenzy Stretches Meaning of ‘Green’, WSJ, June 24, 2021

How to Remove Carbon from 30 Million Cars Every Single Year

Gabon is the first country in Africa to receive results-based payments for reduced emissions from deforestation and forest degradation. The first payment is part of the breakthrough agreement between Gabon and the multi-donor UN-hosted Central African Forest Initiative’s (CAFI) in 2019 for a total of $150 million over ten years.

At a high-level event organised on Tuesday, Sveinung Rotevatn, Norway’s Minister of Climate and Environment said on behalf of CAFI: “This is the first time an African country has been rewarded for reducing forest-related emissions at the national level.  It is extremely important that Gabon has taken this first step. The country has demonstrated that with strong vision, dedication and drive, emissions reductions can be achieved in the Congo Basin forest.” Gabon is leading the way in maintaining its status of High Forest Cover Low Deforestation (HFLD) country. ..

Gabon has preserved much of its pristine rainforest since the early 2000s in creating 13 national parks, one of which is listed UNESCO World Heritage Site. Its forests absorb a total of 140 million tons of CO2 every year, the equivalent of removing 30 million cars from the road globally.

Gabon has also made significant advances in sustainable management of its timber resources outside the parks, with an ambition to ensure that all forest concessions are FSC-certified. Forest spans over 88% of its territory, and deforestation rates have been consistently low (less than 0.08%) since 1990. Gabon’s forests house pristine wildlife and megafauna including 60% of the remaining forest elephants, sometimes called the “architects” or “gardeners” of the forest for their roles in maintaining healthy ecosystems and recently listed as critically endangered.

Excerpt from Gabon receives first payment for reducing CO2 emissions under historic CAFI agreement, Central African Forest Initiative, June 22, 2021

Fossil-Free in 2026

Norrland (in Sweden) abounds in hydropower. Power that is cheap and—crucially—green, along with bargain land and proximity to iron ore, is sparking an improbable industrial revolution, based on hydrogen, “green” steel and batteries. SSAB, a steelmaker, is poised to deliver its first consignment of “eco-steel” from a hydrogen-fuelled pilot plant in Lulea, a northern city. 

Traditionally, to make steel, iron ore must be melted at high temperatures and reduced from iron oxide to iron, a process that typically involves burning fossil fuels, releasing huge amounts of carbon dioxide. Replacing them with hydrogen eliminates more than 98% of the carbon dioxide normally released. The hydrogen is made by electrolysing water, using electricity produced by hydro-power. This approach involves almost no carbon-dioxide emissions at all…..

Northern Sweden’s steelmaking leaps are being emulated elsewhere in Europe, in response to similar environmental pressures which will only increase if, as looks very likely, Germany’s Greens enter government after the election in September 2021. Europe produces a still significant 16% of the world’s steel. Big producers in Germany and Poland, where the industry is mostly coal-based and very dirty, are nervy. Even neighbouring Norway is in danger of losing out. It too has the gift of rich renewable-energy resources, but underinvestment means there may soon not be enough of this green electricity to meet the demands of both households and industry.

Excerpts from Green steel: Plentiful renewable energy is opening up a new industrial frontier, Economist, May 15, 2021

Can We Change Path? Saving Forests and Cutting Carbon

No ecosystem is more important in mitigating the effects of climate change than tropical rainforest. And South-East Asia is home to the world’s third-biggest patch of it, behind the Amazon and Congo basins. Even though humans release carbon from these forests through logging, clear-felling for agriculture and other disruptions, some are so vast and fecund that the growth of the plants within them absorbs even more from the atmosphere. The Congo basin, for instance, locks up 600m tonnes of carbon a year more than it releases, according to the World Resources Institute (WRI), an international NGO that is equivalent to about a third of emissions from all American transport.

In contrast, such is the extent of clearing for plantations in South-East Asia’s rainforests, which run from Myanmar to Indonesia, that over the past 20 years they have turned from a growing carbon sink to a significant source of emissions—nearly 500m tonnes a year. Indonesia and Malaysia, home to the biggest expanses of pristine forest, have lost more than a third of it this century. Cambodia, Laos and Myanmar, relative newcomers to deforestation, are making up for lost time.

The Global Forest Watch, which uses satellite data to track tree cover, loss of virgin forest in Indonesia and Malaysia has slowed for the fourth year in row—a contrast with other parts of the world…The Leaf Coalition, backed by America, Britain and Norway, along with such corporate giants as Amazon, Airbnb, and Unilever, aims to create an international marketplace in which carbon credits can be sold for deforestation avoided. An initial $1bn has been pledged to reward countries for protecting forests. South-East Asia could be a big beneficiary,

Admittedly, curbing deforestation has been a cherished but elusive goal of climate campaigners for ages. A big un initiative to that end, called REDD+, was launched a decade ago, with Indonesia notably due for help. It never achieved its potential. Projects for conservation must jump through many hoops before approval. The risk is often that a patch of forest here may be preserved at the expense of another patch there. Projects are hard to monitor. The price set for carbon under the scheme, $5 a tonne, has been too low to overcome these hurdles.

The Leaf Initiative would double the price of carbon, making conservation more attractive. Whereas buyers of carbon credits under REDD+ pocketed profits from a rise in carbon prices, windfalls will now go to the country that sold the credits. Standards of monitoring are much improved. Crucially, the scheme will involve bigger units of land than previous efforts, the so-called jurisdictional approach. That reduces the risk of deforestation simply being displaced from a protected patch to an unprotected one.

Excerpts from Banyan: There is hope for South-East Asia’s beleaguered tropical forests, Economist, May 1, 2021

Addicted to Weather Modification: Make it Rain Now

Attempts to modify the weather can be dangerous. They require pilots to head into the kind of clouds they would normally avoid. But officials claim that China’s efforts to trigger or boost precipitation by scattering chemicals in the sky, which began in the 1950s, have been hugely successful. Today the country spends at least $200m a year on the programme. In 2018 about 50,000 people were involved in it, most of them part-time or seasonal staff working from small offices in rural areas.

Among the 50 or so countries where cloud-seeding is practiced, China is the most enthusiastic promoter of it….Officials claim it can help to put out wildfires and reduce air pollution. State media report that cloud-seeding brings down about 50bn cubic metres of extra rain or snow across the country each year—equal to about 8% of total water demand. Officials in Beijing claim that in the parched capital, seeding can boost rainfall by 15%…

Recent advances in radar and computer modelling have made rigorous tests more possible. Scientists now generally agree that cloud-seeding can slightly augment snowfall from specific types of cloud that form on the slopes of mountains. Some of China’s weather-modification projects take place in such environments. But elsewhere, despite the lack of convincing proof that it works, farmers still want the government to try. And the government likes getting credit when rain does fall. Cloud-seeding creates employment in poor rural places, in particular for army veterans who believe that the government owes them a job.

Only a few of China’s rainmakers use planes. More commonly, they fire silver iodide into the sky from artillery pieces. But that can be dangerous, too. Locals are often advised to keep an eye out for unexploded shells, which occasionally land on people’s homes….

Excerpts from No silver lining: Cloud-seeding will not solve China’s water shortages, Economist, Mar. 27, 2021

How Air Pollution Infiltrates the Seas

A global effort to curb pollution from the heavy fuel oil burned by most big ships appears to be encouraging water pollution instead. A 2020 regulation aimed at cutting sulfur emissions from ship exhaust is prompting many owners to install scrubbing systems that capture pollutants in water and then dump some or all of the waste into the sea.

Some 4 300 scrubber-equipped ships are already releasing at least 10 gigatons of such wastewater each year, often in ports and sometimes near sensitive coral reefs…. The shipping industry says pollutants in the waste don’t exceed national and international limits, and that there’s no evidence of harm. But some researchers fear scrubber water, which includes toxic metals such as copper and carcinogenic compounds called polycyclic aromatic hydrocarbons, poses a rapidly growing threat, and they want to see such systems outlawed.

The emerging debate is the result of a 2020 regulation put into place by the International Maritime Organization (IMO), an arm of the United Nations that works with 174 member states to develop common rules for international shipping. By banning the use of sulfur-heavy fuel oil, the rule intended to reduce pollutants that contribute to acid rain and smog. IMO estimated the rule would slash sulfur emissions by 77% and prevent tens of thousands of premature deaths from air pollution in ports and coastal communities.

But cleaner fuel can cost up to 50% more than the sulfur-rich kind, and the rule allows ship owners to continue to burn the cheaper fuel if they install scrubbers. In 2015, fewer than 250 ships had scrubbers (often to comply with local regulations); last year, that number grew to more than 4300, according to industry figures.

A scrubber system sends exhaust through a meters-tall metal cylinder, where it is sprayed with seawater or freshwater, depending on the type, at rates comparable to gushing fire hydrants, to capture pollutants. In the most popular systems, called open loop scrubbers, seawater is discharged to the ocean after little or no treatment. Other systems retain sludge for disposal on land and release much smaller (but more concentrated) amounts while at sea….Researchers are particularly worried about discharges in areas that IMO has designated as ecologically sensitive. The Great Barrier Reef, for example, receives about 32 million tons of scrubber effluent per year because it’s near a major shipping route for coal. Ships also release scrubber water around the Galápagos Islands….

Ports see substantial discharges, too. Cruise ships dominate those releases, contributing some 96% of discharges in seven of the 10 most discharge-rich ports. Cruise ships typically need to burn fuel in port to continue to operate their casinos, heated pools, air conditioning, and other amenities. Most ports have shallow water, so pollutants are less diluted and can accumulate more rapidly….

Researchers, who are participating in a €7.5 million European effort to study shipping pollution called EMERGE, would like to study how scrubber water affects fish larvae.

But shippers have become hesitant to share samples and data with scientists. “We’re reluctant to give it to organizations which we know have already an established agenda,” says Mike Kaczmarek, chairman of the Clean Shipping Alliance 2020

The ultimate solution is to require ships to use the cleanest fuel, called marine gas oil. In the meantime, 16 countries as well as some localities have banned the most common scrubbers.

Excerpts from Erik StokstadShipping rule cleans the air but dirties the water, Science, May 13, 2021

The International Council on Clean Transportation (ICCT) study, released on April 9, 2021

The Coin Curse: Bitcoin, Dogecoin and Carbon

Environmentalists…fret about how much energy bitcoin uses. In a paper in Nature Communications, a group of academics…examine bitcoin’s energy use in China. They conclude that, in the absence of legal curbs, bitcoin could by 2024 become a “non-negligible” barrier to China’s efforts to decarbonize its economy.

Bitcoin’s hunger for energy stems from its design. It forgoes centralised record-keeping in favour of a “blockchain”, a transaction database that is distributed among users. The blockchain is maintained by “miners”, who validate transactions by competing to crack mathematical puzzles with solutions that are hard to find but easy to check. Each successfully mined block of transactions generates a reward, currently 6.25 bitcoins ($357,000).

The system varies the difficulty of the puzzles to ensure that one new block is created, on average, every ten minutes. High bitcoin prices make it worthwhile to spend more computing power—and therefore electricity—chasing mining rewards…

Despite the currency’s democratic ambitions, mining is concentrated among a handful of professional operators. About 70% takes place in China. Scientists have concluded that, without regulation, Chinese bitcoin mining could consume around as much energy as Italy or Saudi Arabia by 2024. Annual carbon emissions, at 130m tonnes, would approach those of Nigeria. Such numbers should be taken with a good deal of salt. Bitcoin’s energy use depends crucially on its price, which swings wildly…

But the general picture—that bitcoin is a dirty business—fits with other research. One oft-cited model, which uses publicly available blockchain data, reckons its global energy consumption is already equal to that of Kazakhstan, and that its carbon footprint matches Hong Kong’s.

Excerpts from The dirty truth: Totting up bitcoin’s environmental costs, Economist, Apr. 10, 2021

Dumping Carbon in the Seabed

Oil companies have for decades made money by extracting carbon from the ground. Now they are trying to make money putting it back. Energy giants such as Exxon Mobil and Royal Dutch Shell are pushing carbon capture and storage (CCS)—where carbon is gathered and buried underground—as part of a drive to reduce both their own and their customers’ emissions. Executives say the service could become a new source of income when the industry is grappling with how to adapt to a lower-carbon economy.

Oil companies have long captured carbon from their operations, albeit mostly to produce more oil. Now they want to retool that skill as a service they can sell to heavy-polluting industries like cement and steel, burying their carbon in the ground indefinitely for a fee, rather than releasing it into the atmosphere. Yet critics question the environmental benefits and high cost of such projects.

In 2021, Shell, Total and Equinor launched a joint venture to store carbon in a rock formation thousands of feet beneath the seabed off the coast of Norway. The state-backed Northern Lights project is set to be the first time companies outside the oil industry will be able to pay to have their carbon gathered and stored. Most carbon-storage projects rely on government funding. Norway is covering about 80% of the $1.6 billion cost of the Northern Lights project, with the rest split equally between Shell, Equinor and Total.

Exxon has said it plans to form a new business unit to commercialize carbon capture and storage, forecasting it could become a $2 trillion market by 2040. Chevron has formed partnerships on storage projects, while BP is codeveloping storage projects in the U.K. and Australia. Oil executives’ sales pitch to carbon-intensive companies: We will provide your energy, then take back the carbon to minimize your footprint. Carbon capture and storage iss becoming a business rather than just a solution. 

The U.S. offers companies a tax credit of as much as $50 a metric ton of carbon captured, while the U.K., Norway and Australia have collectively committed billions of dollars of funding for carbon-capture projects. But There are  concerns about whether storage sites could leak carbon. In Europe, public resistance to land-based storage has led to the use of aquifers and depleted gas fields in the North Sea….In the Norway project, carbon will be transported by ship around the bottom of the country before being pumped offshore via a 68-mile pipeline and then injected into an aquifer under the seabed. BP is working on a similar concept for a project it will operate in northeast England, where carbon will be collected from a gas-power plant and various industrial sites, then stored under the North Sea. “We’ll capture the carbon, we’ll take it offshore, we’ll stuff it underground,” BP Chief Executive Bernard Looney recently said of the project. “Taking the carbon back is what I like to describe it as.”

Excerpts from Sarah McFarlane, Oil Giants Turn to Carbon Storage, Apr. 20, 2021

Chasing Super-Polluters

A constellation of satellites will be flown this decade to try to pinpoint significant releases of climate-changing gases, in particular carbon dioxide and methane. The initiative is being led by an American non-profit organisation called Carbon Mapper.
It will use technology developed by the US space agency over the past decade.
The satellites – 20 or so – will be built and flown by San Francisco’s Planet company.
Planet operates today the largest fleet of Earth-observing spacecraft.

There are already quite a few satellites in the sky that monitor greenhouse gases, but the capability is far from perfect. Most of these spacecraft can sense the likes of methane over very large areas but have poor resolution at the local level, at the scale, say, of a leaking pipeline. And those systems that can capture this detail will lack the wide-area coverage and the timely return to a particular location. The Carbon Mapper project wants to fix this either-or-situation by flying multiple high-resolution (30m) sensors that can deliver a daily view, or better.

They will look for super-emitters – the actors responsible for large releases of greenhouse gases. These would include oil and gas infrastructure, or perhaps poorly managed landfills and large dairy factory facilities.

Often these emitters want to know they have a problem but just don’t have the data to take action. “What we’ve learned is that decision support systems that focus just at the level of nation states, or countries, are necessary but not sufficient. We really need to get down to the scale of individual facilities, and even individual pieces of equipment, if we’re going to have an impact across civil society,” explained Riley Duren, Carbon Mapper’s CEO and a research scientist at the University of Arizona…The aim is to put the satellite data in the hands of everyone, and with the necessary tools also to be able to understand and use that information….

Excerpt from Jonathan Amos Carbon Mapper satellite network to find super-emitters, Reuters, April 16, 2021

The Leaky Oil Pipelines on Our Seafloor

Federal officials aren’t adequately monitoring the integrity of 8,600 miles of active oil-and-gas pipelines on the Gulf of Mexico’s seafloor, and for decades have allowed the industry to abandon old pipelines with little oversight, a new report to Congress shows. The Government Accountability Office report faults the Interior Department’s offshore oil-safety regulator’s reliance on surface observations and pressure sensors, rather than  subsea inspection, to monitor for leaks.

The report urges the regulator, the Bureau of Safety and Environmental Enforcement (BSEE), to resume work on a long-stalled update to pipeline rules. BSEE currently requires monthly inspections of pipeline routes in the Gulf by helicopter or marine vessel, to look for oil sheens or gas bubbles on the surface to determine whether a pipeline is leaking. By comparison, the bureau’s Pacific office requires subsea pipeline inspections, in part because of seismic concerns, on its much smaller network of 200 miles of active pipelines.

The GAO also found that BSEE and its predecessors allowed the oil industry to leave thousands of miles of decommissioned pipelines on the seafloor rather than incur the cost of raising them back to the surface. Federal regulations allow BSEE to permit operators to decommission pipelines in place, cleaning and burying them in the seabed. The GAO found that the agency doesn’t ensure standards are followed, even as it allowed 97% of the miles of decommissioned pipelines taken out of active use in the Gulf since the 1960s—nearly 18,000 miles—to remain in place.

BSEE also has failed to fully consider whether decommissioned pipelines represent a hazard to navigation and commercial fishing, like trawlers that can be damaged by snagging equipment on undersea pipelines, the report said. Eighty-nine trawlers reported damage from snagging on oil-and-gas equipment between 2015 and 2019, the report found.

BSEE’s failure to inspect decommissioned pipelines also means officials don’t have a complete record of which equipment has been properly cleaned and buried, or whether hurricanes and underwater landslides have moved buried pipelines, potentially creating navigation hazards and environmental damage. A buried 9-mile pipeline segment was swept 4,000 feet out of place by Hurricane Katrina, the report said.

BSEE also allowed oil producers to leave in place some 250 decommissioned “umbilical lines” that carry electricity and hydraulic power to subsea equipment, the report said, over objections of some Interior officials who were concerned that these lines often contain hazardous chemicals that could leak over time as the equipment degrades.

Excerpt from Ted Mann, U.S. Needs to Better Monitor Oil, Gas Pipelines in Gulf of Mexico, Report Says, WSJ, Apr. 19, 2021

Better than Gods: Can We Master the Climate?

Given the urgency of the risks posed by climate change, the U.S. should pursue a research program for solar geoengineering — in coordination with other nations, subject to governance, and alongside a robust portfolio of climate mitigation and adaptation policies, says a 2021 report from the National Academies of Sciences, Engineering, and Medicine. The report emphasizes that solar geoengineering is not a substitute for reducing greenhouse gas emissions.
 
Solar geoengineering refers to strategies designed to cool Earth either by adding small reflective particles to the upper atmosphere, by increasing reflective cloud cover in the lower atmosphere, or by thinning high-altitude clouds that can absorb heat. While such strategies have the potential to reduce global temperatures and thereby ameliorate some of the risks posed by climate change, they could also introduce an array of unknown or negative consequences

Scientific understanding of many aspects of solar geoengineering technologies remains limited, including how they could affect weather extremes, agriculture, natural ecosystems, or human health. There currently is no coordinated national effort for solar geoengineering research. The report recommends a comprehensive plan for governing solar geoengineering research, designed to ensure it moves forward in a socially responsible manner. Researchers should follow a code of conduct, for example, and research should be catalogued in a public registry, be subject to regular program assessment and review, and allow for public engagement.

Deliberate outdoor experiments that involve releasing substances into the atmosphere should be considered only when they can provide critical observations that cannot be provided by laboratory study, modeling, or experiments of opportunity — such as volcanic eruptions. Outdoor experiments should be subject to appropriate governance including permitting and impact assessments, says the report…The report says the U.S. Global Change Research Program (USGCRP) should lead the effort to establish and coordinate a solar geoengineering research program across federal agencies and scientific disciplines, with funding in the range of $100 million-$200 million over the first five years. USGCRP would enable oversight and governance of research activities, including ensuring peer review, coordinating budget proposals and requests, periodically assessing progress, and defining program goals. Funding should be set aside specifically for implementation of governance and public engagement efforts.

Excerpts from New Report Says U.S. Should Cautiously Pursue Solar Geoengineering Research to Better Understand Options for Responding to Climate Change Risks, National Academies of Sciences, Engineering, and Medicine Press Release, Mar. 25, 2021

Facing the Unprecedented: Nuclear Waste Burial in China

China is building a massive underground laboratory to research disposal technologies for high-level radioactive waste, the most dangerous byproduct of nuclear technology and applications. This is meant to pave the way for a repository that can handle the disposal of at least a century’s worth of such materials for tens of thousands of years, the lab’s chief designer told China Daily in an exclusive interview.

The lab will be situated in granite up to 560 meters below ground in the Beishan region of Gansu province, said Wang Ju, vice-president of the Beijing Research Institute of Uranium Geology. The underground lab was listed as one of China’s major scientific construction projects in the 13th Five-Year Plan (2016-20).

Its surface facilities will cover 247 hectares, with 2.39 hectares of gross floor space. The underground complex will have a total structural volume of 514,200 square cubic meters, along with 13.4 kilometers of tunnels, he added. The lab is estimated to cost over 2.72 billion yuan ($422 million) and take seven years to build. It is designed to operate for 50 years, and if its research proves successful and the site is suitable, a long-term underground repository for high-level waste will be built near the lab by 2050

According to the 14th Five-Year Plan (2021-25), China seeks to cut carbon emissions by optimizing its energy consumption structure and raising its proportion of nonfossil energy. This includes building a new generation of coastal nuclear plants,… small-scale reactors and offshore floating reactors.. As of 2020, China had 49 nuclear reactors in operation, making it the world’s third-largest nuclear energy producer, behind the United States and France. There are 16 nuclear reactors in construction in China, the most in the world, according to the World Nuclear Association.

Excerpts from Zhang Zhihao, Construction of radioactive waste disposal lab underway, China Daily, Apr. 8, 2021

 
 
 

A Lethal Combination: Rusty Tanks and Melting Ice in the Artic

A mining firm has paid a record $2bn fine over a huge oil spill that caused one of Russia’s worst environmental disasters. Norilsk Nickel, the world’s leading nickel and palladium producer, said it had paid the fine on March 10, 2021.The fuel spill in May 2021 saw 21,000 tonnes of diesel pour from one of the company’s storage tanks into rivers and lakes in Russia’s Arctic north…The penalty is the biggest ever issued for environmental damage in Russia, officials say.

How did the spill happen? The diesel oil began leaking on May 29, 2020. It is thought to have originated from a rusty storage tank at Norilsk Nickel’s power plant in Siberia.
Investigators believe the tank near Norilsk sank because of melting permafrost which weakened its supports. The Arctic had seen weeks of unusually warm weather – widely believed to be a symptom of global warming – prior to the disaster. The oil contaminated the Ambarnaya river and surrounding subsoil before drifting about 20km (12 miles) north of Norilsk. It then entered Lake Pyasino, which flows to the Kara Sea in the Arctic Ocean. In total, the oil contaminated a 350 sq km (135 sq mile) area…

The clean-up could cost $1.5bn and take between five and 10 years…Norilsk is already a well-known pollution hotspot, because of contamination from the industry that dominates the city.

Excerpt from Norilsk Nickel: Mining firm pays record $2bn fine over Arctic oil spill, BBC, Mar. 10, 2021

Planting Trees Can be Bad for the Planet

Some scientists argue that deforestation is not always harmful for the planet. Christopher A. Williams, a professor at Clark University’s Graduate School of Geography (Worcester, Massachusetts), says that instead of warming up the Earth, deforestation can actually cool it down. (See Climate impacts of U.S. forest loss span net warming to net cooling, Feb. 2021) But some experts are concerned that Williams’ work is likely to be misconstrued as permission to continue deforesting, which is not his intention.

It’s widely accepted that our existing forests are vital carbon sinks, and the best course of action is to stop deforestation, while rewilding and reforesting areas already lost. Deforestation contributes to climate change, can cause wildfires, desertification, soil erosion and most of all – releases huge amounts of carbon dioxide which causes global warming.

While the above may be true, Williams’ new research argues that there are two factors we are not acknowledging: the significance of location and something known as ‘the albedo effect’. Put simply, ‘the albedo effect’ is the process in which forests retain heat. Forests tend to be darker than other surfaces, which means they absorb more sunlight and hold onto heat, explains Williams. As a result, some scientists believe that deforestation gets rid of unwanted heat which is contributing to global warming.

“We found that in some parts of the country like the Intermountain West, more forest actually leads to a hotter planet when we consider the full climate impacts from both carbon and albedo effects,” says Professor Williams. He adds that it is important to consider the albedo effect of forests alongside their well-known carbon storage when aiming to cool the planet.

The team discovered that for approximately one quarter of the US, forest loss causes a persistent net cooling because the albedo effect outweighs the carbon effect.  “It is all about putting the right trees in the right place,” explains Williams, “and studies like ours can help identify where the potential for cooling is greatest.”

For instance, loss of forests east of the Mississippi River caused planetary warming, while forest loss in the Intermountain and Rocky Mountain West led to a net cooling. “If we fail to consider both the carbon and the albedo effects, large-scale tree-planting initiatives, such as Canada’s 2Billion Trees Initiative and The Nature Conservancy’s Plant a Billion Trees campaign, could end up placing trees in locations that are counterproductive for cooling the climate system,” he says.

Maeve Campbell, DEFORESTATION COULD BE COOLING THE PLANET DOWN, Euronews, SAY SCIENTISTS, Feb. 17,2021

How Soil Can Fight Pollution

Soil biodiversity is essential for most of the ecosystem services and functions that soils
provide and perform. Soil microbes (i.e., bacteria, fungi) and microfauna (i.e., protozoa
and nematodes) transform organic and inorganic compounds into available forms. These transformations are critical for nutrient cycling and availability, for plants, and other species growth, for cycling of soil organic matter and carbon sequestration, and for the filtration, degradation, and immobilization of contaminants in water and soil.

An important part of the food web is represented by mesofauna, such as springtails and mites, which accelerate litter decomposition and enhance nutrient cycling and availability (especially nitrogen), and predators of smaller soil organisms.

Soil macro, and megafauna such as earthworms, ants, termites, and some mammals act as ecosystem engineers that modify soil porosity, water and gas transport, and bind soil particles together into stable aggregates that hold the soil in place and thus reduce erosion.

Soil biodiversity can mitigate threats to ecosystem services, for instance by acting as a powerful tool in bioremediation of contaminated soils. Biostimulation and bioaugmentation are environmentally sound strategies that contribute to the filtration, degradation, and immobilization of target contaminants. Furthermore, the integral use of organisms such as microbes (bioaugmentation), plants (phytoremediation) and earthworms (vermiremediation) as a bioremediation strategy in hydrocarbon-contaminated soils has proven to be a viable alternative for increasing hydrocarbon removal. On the other hand, soil macrofauna, such as earthworms, termites, and ants, play an important role in improving soil structure and aggregation, which can improve resistance to soil erosion caused by wind and water.

Excerpt from FAO, State of Knowledge of Soil Biodiversity, Report 2020

The Great Green Wall and its Past Mistakes

The Great Green Wall  aims to transform the lives of some 100 million people by planting a mosaic of trees, shrubs, and grasses along a corridor stretching some 8000 kilometers across Africa by 2030. Since the African Union first launched the Great Green Wall in 2007, the initiative has struggled to make headway. Made up of local efforts across 11 countries, it has reached just 16% of its overall goal to vegetate 150 million hectares.

But in January 2021, the project—which analysts estimate will cost at least $30 billion—got a major boost: a pledge of $14 billion in funding over the next 5 years from a coalition of international development banks and governments. The money is meant to accelerate the effort to sustain livelihoods, conserve biodiversity, and combat desertification and climate change, French President Emmanuel Macron said in announcing the pledges on January 11, 2021.

Environmental restoration and community development specialists welcomed the news. But many are also apprehensive. In recent years, research by ecologists, economists, and social scientists has shown that many forestry projects around the world have failed because they didn’t adequately address fundamental social and ecological issues…Many efforts, particularly those not led by local communities, stumble. Newly planted trees can die of neglect when planners don’t engage communities from the start in discussions about which species to plant, as well as whether residents are willing and able to provide the water, fertilizer, and protection from grazing animals that saplings need. Farmers are often busy and have their own priorities; they “will not … manage trees that they do not value.” …

Elvis Paul Tangem, who coordinates the Great Green Wall Initiative for the African Union Commission, agrees. He says promises to plant huge numbers of trees at low cost, for example at $1 per seedling, can distract from the real challenge. “You can plant a tree for $1,” he says, “but you cannot grow a tree for $1.”

Excerpt from Rachel CernanskyNew funds could help grow Africa’s Great Green Wall. But can the massive forestry effort learn from past mistakes?, Science, Feb. 11, 2021

Green-Shaming ExxonMobil

ExxonMobil’s shareholders concerned about greenery are angered by ExxonMobil’s continued carbon-cuddling. Those who care more about greenbacks are irked by its capital indiscipline. Right now, both are pushing in the same direction.

D.E. Shaw, a big hedge fund, is urging ExxonMobil to spend more wisely… More eye-catchingly, Engine No.1, a newish fund with a stake of just 0.02%, is trying to green-shame Mr Woods with a mantra as straightforward as ExxonMobil’s: if the company continues on its current course, and demand shifts quickly to cleaner energy, it risks terminal decline. The fund has launched a proxy battle by proposing four new directors; the current board, it complains, is long on blue-chip corporate credentials but short on energy expertise. Engine No.1’s agitation for a shake-up has won backing from, among others, Calstrs, which manages $283bn on behalf of California’s public-sector workers.

Most important, the tone from ExxonMobil’s three biggest institutional shareholders—BlackRock, Vanguard and State Street—has also shifted…In a recent letter to clients, Larry Fink, boss of BlackRock, talked of greener stocks enjoying a “sustainability premium” and dirty ones jeopardising portfolios’ long-term returns. He hinted that his firm—the world’s largest asset manager—might divest from firms that failed to appreciate the “tectonic shift” taking place. Vanguard, too, has called out ExxonMobil for flawed governance…

Excerpt from Schumpeter: The Long Squeeze, Economist, Feb. 6, 2021

Natural Capital and Human Well-Being

What is the contribution of nature to the economy?… The breathable air, drinkable water and tolerable temperatures that allow humans to do everything they do, and the complex ecosystems that maintain them, tend to be taken for granted. Professor Dasgupta’s review on the Economics of Biodiversity does not seek to play on the heartstrings with tales of starving polar bears. Rather, it makes the hard-headed case that services provided by nature are an indispensable input to economic activity. Some of these services are relatively easy to discern: fish stocks, say, in the open ocean. Others are far less visible: such as the complex ecosystems within soil that recycle nutrients, purify water and absorb atmospheric carbon. These are unfamiliar topics for economists, so the review seeks to provide a “grammar” through which they can be analysed.

The report features its own illustrative production function, which includes nature. The environment appears once as a source of flows of extractable resources (like fish or timber). But it also shows up more broadly as a stock of “natural” capital. The inclusion of natural capital enables an analysis of the sustainability of current rates of economic growth. As people produce GDP, they extract resources from nature and dump waste back into it. If this extraction and dumping exceeds nature’s capacity to repair itself, the stock of natural capital shrinks and with it the flow of valuable environmental services. Between 1992 and 2014, according to a report published by the UN, the value of produced capital (such as machines and buildings) roughly doubled and that of human capital (workers and their skills) rose by 13%, while the estimated value of natural capital declined by nearly 40%. The demands humans currently place on nature, in terms of resource extraction and the dumping of harmful waste, are roughly equivalent to the sustainable output of 1.6 Earths (of which, alas, there is only the one)…Indeed, Professor Dasgupta argues that economists should acknowledge that there are in fact limits to growth. As the efficiency with which we make use of Earth’s finite bounty is bounded (by the laws of physics), there is necessarily some maximum sustainable level of GDP…

Professor Dasgupta hints at this problem by appealing to the “sacredness” of nature, in addition to his mathematical models and analytical arguments.

Excerpts from How should economists think about biodiversity?, Economist, Feb. 6, 2021

Who Will Rule the Arctic?


Rosatom joined the Arctic Economic Council*in February 2021. Rosatom is a Russian state-owned corporation supplying about 20% of the country’s electricity. The corporation mainly holds assets in nuclear power and machine engineering and construction. In 2018, the Russian government appointed Rosatom to manage the Northern Sea Route (NSR). The NSR grants direct access to the Arctic, a region of increasing importance for Russia due to its abundance of fossil fuels. Moreover, due to climate changes, the extraction of natural resources, oil and gas are easier than ever before.

Since Russia’s handover of NSR’s management, Rosatom’s emphasis on the use of nuclear power for shipping, infrastructure development and fossil fuel extraction is likely to become more prevalent in the Arctic region. Rosatom already operate the world’s first floating nuclear power plant in the Siberian port of Pevek and is the only company in the world operating a fleet of civilian nuclear-powered icebreakers…The company has numerous plans up its sleeves, among them to expand the fleet of heavy-duty nuclear icebreakers to a minimum of nine by 2035.

*Other members of the Arctic Economic Council.

Excerpt from Polina Leganger Bronder, Rosatom joins Arctic Economic Council, BarentsObserver, Feb. 8, 2021

Living in the World of Tesla: Cobalt, Congo and China

 A 20% rise in the price of cobalt since the beginning of 2021 shows how the rush to build more electric vehicles is stressing global supply chains. 

A majority of the world’s cobalt is mined in the Democratic Republic of the Congo in central Africa. It typically is carried overland to South Africa, shipped out from the port of Durban, South Africa, and processed in China before the material goes to battery makers—meaning the supply chain has several choke points that make it vulnerable to disruption…

Car and battery makers have been looking for more control over their cobalt supply and ways to avoid the metal altogether. Honda Motor Co. last year formed an alliance with a leading Chinese car-battery maker, Contemporary Amperex Technology Ltd. , hoping that CATL’s supply-chain clout would help stabilize Honda’s battery supply..

Meanwhile, China plays a critical role even though it doesn’t have significant reserves of cobalt itself. Chinese companies control more than 40% of Congo’s cobalt-mining capacity, according to an estimate by Roskill, the London research firm…China’s ambassador to Congo was quoted in state media last year as saying more than 80 Chinese enterprises have invested in Congo and created nearly 50,000 local jobs…

To break China’s stronghold, auto makers and suppliers are trying to recycle more cobalt from old batteries and exploring other nations for alternative supplies of the material.  Another reason to look for alternatives is instability in Congo and continuing ethical concerns about miners working in sometimes-harsh conditions with rudimentary tools and no safety equipment.

Excerpt from Yang Jie, EV Surge Sends Cobalt Prices Soaring, WSJ, Jan. 23, 2021

How to Find the True Cost of Water

At current rates of consumption, the demand for water worldwide will be 40% greater than its supply by 2030, according to the UN. Portfolio managers are realizing that physical, reputational and regulatory water risk could hurt their investments, particularly in thirsty industries such as food, mining, textiles and utilities.

One worry is that shocks to supply could drown or dry out a company’s assets. In recent years Coca-Cola has been forced to close plants in India because of drought. In 2019 floods in America’s Midwest caused disruptions at the facilities of two food giants, Cargill and Tyson Foods. A survey by CDP, a non-profit firm, found that 783 big listed companies had faced a total of $40bn of water-related losses in 2018.

Another concern is that the price a company pays for water could rocket. The market price of water does not reflect the environmental and social costs of using it. Government subsidies also mean that companies often do not pay for its true cost. As aquifers are depleted, though, subsidies could become more costly and unpopular, forcing governments to retract them. S&P Global Trucost, a data provider, reckons that if Fortune 500 companies paid the true cost of water, based on estimates of scarcity, rather than current prices, their profit margins would shrink by a tenth. Margins for food, drink and tobacco firms would fall by three-quarters.

Disclosures of water risk are even patchier than those of greenhouse-gas emissions…Established names like Bloomberg and S&P Global are plugging the gap, as are startups. The result is that investors can approach management armed with data rather than questions. “We are getting rid of the black box that companies hide in.” 

Ceres, a non-profit firm, scores businesses on everything from direct water management to risks in the supply chain. Those seeking more detail can use visual tools, such as Bloomberg’s “maps” function, which plots a company’s facilities over a heat map based on water stress. (California is the same color as swathes of sub-Saharan Africa; far-eastern Russia looks a lot like western Europe.) Firms like Aquantix go further, and try to predict the financial cost of water risk.

The accuracy of such forecasts is not yet proven. For Andrew Mason of Aberdeen Standard Investments, though, they are still useful. They show companies that investors care about water risk and encourage them to share data. “This is where carbon was ten or 15 years ago,” he says.

Excerpt from An expanding pool: Investors start to pay attention to water risk, Economist, Jan. 9, 2021

The New Lepers: Oil in Ecuador and Arctic Drilling

Some of Europe’s largest banks are phasing out trading services for the export of oil from the Ecuadorean Amazon, a move that reflects the growing focus of global banks on climate change and their shift away from increasingly risky fossil fuels.

On January 25, 2021, Switzerland’s Credit Suisse Group AG and Holland’s ING said that they were excluding new transactions related to exports of Ecuador’s Amazonian oil from their trading activities, citing climate change and concerns for the Amazon rainforest and its Indigenous people. France’s BNP Paribas SA, the largest bank in the eurozone and one of the region’s trading powerhouses, said in December 2020 that it would immediately exclude from its trading activities the seaborne exports of oil from the Esmeraldas region in Ecuador under its latest environmental finance policies.

Ecuador isn’t one of the world’s top oil producers, but petroleum exports are a key contributor to the country’s economy. Petroecuador, the nation’s state-owned oil company, didn’t respond to requests for comment.  The banks’ flight from Amazonian crude follows last year’s crash in oil prices and growing fears of so-called stranded assets, which are fossil fuels that lose value due to the world’s transition to cleaner forms of energy…

Banks are also facing calls from environmentalists and Indigenous peoples to limit their involvement in fossil fuels. In Ecuador, a campaign by activists and Indigenous people spurred ING and Credit Suisse to reduce their exposure to the Amazonian oil trade. The nonprofits Stand.earth and Amazon Watch published a report in 2020 that called out banks—including ING, Credit Suisse and BNP Paribas—for their financing of Amazonian crude…

Banks and insurers are also cutting ties with Arctic oil drilling. This month, Axis Capital Holdings joined fellow insurers AXA and Swiss Re in pledging not to underwrite any new oil-and-gas drilling in the Arctic Wildlife Refuge in Alaska.  The six biggest U.S. banks— Citigroup Inc., Bank of America Corp. , Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.—have also said they would end funding for new drilling and exploration projects in the Arctic.

Excerpts from Dieter Holger & Pietro Lombardi, European Banks Quit Ecuador’s Amazonian Oil Trade, WSJ, Jan. 25, 2021

How Germany and China Saved the World from Fossil Fuels

In 2020, 132bn watts of new solar generating capacity were installed around the world; in many places solar panels are now by far the cheapest way to produce electricity. This transformation… was the result of a decisive shift in German government policy happening to coincide with China becoming the dominant force in global manufacturing.

By 2012 Germany had paid out more than €200bn in subsidies for solar energy production. It had also changed the world. Between 2004 and 2010 the global market for solar panels grew 30-fold as investors in Germany and the other countries which followed its lead piled in… By 2012 the price of a panel was a sixth what it had been in 2004, and it has gone on falling ever since… In sunny places new solar-power installations are significantly cheaper than generating electricity from fossil fuels. Installed capacity is now 776gw, more than 100 times what it was in 2004.

That does not mean Germany got exactly what it wanted. Solar power is not the decentralised, communal source of self-sufficient energy the Greens dreamed of; its provision is dominated by large industrial installations. And the panels on those installations are not made by the German companies the Social Democrats wanted to support: Chinese manufacturers trounced them…But they do provide the world with a zero-carbon energy source cheaper than fossil fuels, and there is room for many more of them…

The industry boasts no giants comparable to those in aircraft manufacture or pharmaceuticals, let alone computing; no solar company has a market capitalization of more than $10bn, and no solar CEO is in danger of being recognized on the street. It is a commodity business in which the commodity’s price moves in only one direction and everyone works on very thin margins. Good for the planet—but hardly a gold mine. 

Excerpt from How governments spurred the rise of solar power, Economist Technology Quarterly, Jan 9, 2021 

The Geo-Economics of Rare Earth Minerals

Greenland is rich in rare-earth minerals, and the superpowers want them…These 17 elements are used in  all things electronic. The renewable-energy revolution will also rely on them for power storage and transmission. On the darker side, weapons—including nuclear ones—need them too.

A new open-pit mine at the top of Kuannersuit, a cloud-rimmed mountain near the settlement of Narsaq in the south of Greenland may be rich in rare earth. So believes Greenland Minerals, an Australia-based company, which has been angling for the excavation rights for the past decade.

Greenland’s environment ministry has given a tentative go-ahead. A majority of parliamentarians have already declared themselves in favor of digging. In early February 2020, the townsfolk of Narsaq will hear representations from the island’s government. In Greenland, Urani Naamik (“No to Uranium”), a community lobby, has strong support. Nobody wants (mildly) radioactive dust, an inevitable by-product of mining. Many worry about the waste—a sludge of chemicals and discarded rock fragments—that mining would leave on top of the mountain.

The bigger long-term issue is who gets the mine’s spoils. Shenghe, a Chinese conglomerate, is the largest shareholder in Greenland Minerals. The Danish government, in a frenzy of Atlanticism, earlier managed to stop Chinese companies from investing in the expansion of two airports on the island. Will it preserve Greenland’s rare earths for NATO?

Cloud mining: In search of Greenland’s rare earths, Economist, Jan. 16, 2021, at 41

The Coral Reefs of the High Seas

While the terms “coral reef” and “high seas” are rarely combined in the same sentence, reef-building corals are found in Areas Beyond National Jurisdiction (ABNJ), the high seas. A study that has been published in the Frontiers in Marine Science identified 116 coral reefs in the Atlantic and Pacific Ocean, most of them located outside Marine Protected Areas (MPAs).

There is currently no comprehensive legal framework for the establishment of MPAs in ABNJ. Rather, initiatives to protect critical habitats on the high seas remain scattered throughout the legal mandates of organizations with different management purposes…. Yet, high seas MPAs are possible…. For example, the member countries of the Convention for the Protection of the Marine Environment of the North-East Atlantic (OSPAR) and the Convention on the Conservation of Antarctic Marine Life (CCAMLR) have established MPAs in ABNJ of the North Atlantic and Southern Ocean, respectively While these MPAs provide important advances in protecting biodiversity on the high seas, they still only cover a very small portion of the international ocean. 

David Wagner et al., Coral Reefs of the High Seas: Hidden Biodiversity Hotspots in Need of Protection, Frontiers in Marine Science, Sept. 14, 2020

See also Coral Reefs on the High Seas Coalition

Climate Change Unlikely to Kill Amazon Rainforest

The current Earth system models used for climate predictions show that the Amazon rainforest is very sensitive to water stress. Since the air in the future is predicted to get warmer and drier with climate change, translating to increased water stress, this could have large implications not just for the forest’s survival, but also for its storage of CO2. If the forest is not able to survive in its current capacity, climate change could greatly accelerate.

Columbia Engineering researchers decided to investigate whether this was true, whether these forests are really as sensitive to water stress as what the models have been showing. In a study published in Science Advances, they report their discovery that these models have been largely over-estimating water stress in tropical forests.

The team found that, while models show that increases in air dryness greatly diminish photosynthesis rates in certain regions of the Amazon rainforest, the observational data results show the opposite: in certain very wet regions, the forests instead even increase photosynthesis rates in response to drier air…[In fact] As the trees become stressed, they generate more efficient leaves that can more than compensate for water stress.”…

“So much of the scientific research coming out these days is that with climate change, our current ecosystems might not be able to survive, potentially leading to the acceleration of global warming due to feedbacks,” Gentine added. “It was nice to see that maybe some of our estimates of approaching mortality in the Amazon rainforest may not be quite as dire as we previously thought.”

Excerpts from Some Amazon Rainforest Regions More Resistant to Climate Change than Previously Thought, Columbia Engineering, Nov. 20, 2020

Banning Gasoline Cars: Better than subsidies and taxes

More than a dozen countries say they will prohibit sales of petrol-fueled cars by a certain date. On September 23rd, 2020,  Gavin Newsom, California’s governor, pledged to end sales of non-electric cars by 2035. Such bans may look like window-dressing, and that could yet in some instances prove to be the case. But in the right circumstances, they can be both effective and efficient at cutting carbon.

Fully electric vehicles are not yet a perfect substitute for petrol-consuming alternatives. They are often more expensive, depreciate faster, and have a lower range of travel and more limited supporting infrastructure, like charging stations or properly equipped mechanics. But the number of available electric models is growing, and performance gaps are closing. A recent analysis concludes that in such conditions—when electric vehicles are good but not perfect substitutes for petrol-guzzlers—a ban on the production of petrol-fueled cars is a much less inefficient way to reduce emissions than you might think.

If electric vehicles were in every way as satisfactory as alternatives, it would take little or no policy incentive to flip the market from petrol-powered cars to electric ones. If, on the other hand, electric cars were not a good substitute at all, the cost of pushing consumers towards battery-powered vehicles would not be worth the savings from reduced emissions. Somewhere in between those extremes, both electric and petrol-powered cars may continue to be produced in the absence of any emissions-reducing policy even though it would be preferable, given the costs of climate change, for the market to flip entirely from the old technology to the new. Ideally, the authors reckon, this inefficiency would be rectified by a carbon tax, which would induce a complete transition to electric vehicles. If a tax were politically impossible to implement, though, a production ban would achieve the same end only slightly less efficiently—at a loss of about 3% of the annual social cost of petrol-vehicle emissions, or about $19bn over 70 years… A shove may work as well as a nudge. 

Excerpts from Outright bans can sometimes be a good way to fight climate change, Economist, Oct. 3, 2020

To Steal To Survive: the Illegal Lumberjacks of the Amazon

The Amata logging company was supposed to represent an answer to the thorny problem of how countries like Brazil can take advantage of the Amazon rainforest without widespread deforestation.  But after spending tens of millions of dollars since 2010 to run a 178-square-mile concession in the rainforest to produce timber sustainably, Amata pulled out in April 2020. The reason: uncontrolled wildcat loggers who invaded Amata’s land, illegally toppling and stealing trees.

Amata’s executives in São Paulo said that instead of promoting and protecting legal businesses, Mr. Bolsonaro’s administration did next to nothing to control the illegal loggers who invaded the concession in the western state of Rondônia. “It’s a conflict area,” Amata Chief Executive Ana Bastos said of the land granted to the company. “Those lumberjacks steal our lumber to survive. If we try to stop them, they will fight back. It will be an eternal conflict.”

Since they pay no taxes and make no effort to protect certain species or invest in restoration, illegal loggers can charge $431 per square meter of lumber, compared with $1,511 per square meter of legally logged timber, concession operators said.  “It is like having a regular, taxpaying shop competing with lots of tax-free peddlers right in front of your door,” said Jonas Perutti, owner of Lumbering Industrial Madeflona Ltda., which also operates concessions in the Amazon…

“The organized crime that funds illegal activity in the Amazon—including deforestation, land grabbing, lumber theft and mining—remains strong and active,” said Carlos Nobre, a Brazilian climate scientist. “It seems [the criminals] aren’t frightened by the government’s zero-tolerance rhetoric or don’t believe it’s serious.”…

Wildcat loggers are among the Amazon’s poorest residents, and many feel they have an ally in Mr. Bolsonaro,[Brazil’s President]…“There’s much corruption in law enforcement, and consumers don’t care if the wood they are buying is legal or not,” said Oberdan Perondi, a co-owner of a concession that is five times as large as Amata’s and also competes with illegal loggers.

Excerpt from Paulo Trevisani and Juan Forer, Brazil Wanted to Harvest the Amazon Responsibly. Illicit Loggers Axed the Plan, WSJ, Oct. 28, 2020

The Plight of Electric Cars: Cobalt Batteries and Mining

About 60% of the world’s cobalt is found in Congo, scattered across the copperbelt that stretches east into Zambia. The people of Kawama, Gongo grumble that too much land has been sold to mining firms. “We used to dig freely,” says Gerard Kaumba, a miner. “But now the government has sold all the hills.” There are still some sites where miners can turn up and dig, but they have to sell to whoever owns the concession. A sweltering day’s work might earn you $7. Many people have found they can make more at night, pilfering cobalt from industrial mines.

Glencore, a commodities giant with two mines in Congo, reckons that some 2,000 people sneak into its pits every day. Other companies have even more robbers to contend with. In 2019 Congolese soldiers chased thieves out of a mine owned by China Molybdenum where, it was reckoned, 10,000-odd people were then illegally digging. Sneaking into Glencore’s mines is hardest, says a Kawaman, as its guards do not collude with thieves—and often chase them away with dogs.

Congo’s industrial miners are not all angels.  Gécamines, the state-owned company, has enriched crooked politicians for half a century. Global Witness, a watchdog based in London, says Congo’s treasury lost $750m of mining revenues to graft between 2013 and 2015. ENRC, which has mines in Congo, has faced allegations of corruption and an investigation by Britain’s Serious Fraud Office (it denies wrongdoing). So has Glencore, which has worked with Dan Gertler, an Israeli billionaire. Mr Gertler, a close friend of a former Congolese president, Joseph Kabila, is under American sanctions… 

While big firms rake in millions, many of the little guys languish in jail. The prison in Kolwezi, the largest city in the mining region, is crammed with men caught stealing copper and cobalt. More than a hundred inmates occupy one stinking room, sitting in rows on the ground, each wedged between another’s legs. Prissoners are allowed to use the toilet only once a day, so they often urinate in their clothes

Excerpt from Cobalt blues: In Congo the little guys are jailed for stealing minerals. Economist, Oct. 17, 2020

The Unbankables: Fossil-Fuel Companies

Defenders of the oil-and-gas industry in Washington are fighting back against big banks who want to stop financing new Arctic-drilling projects, fearing it could be a harbinger of an unbankable future for fossil-fuel companies. Five of the six largest U.S. banks— Citigroup, Goldman Sachs,  JPMorgan Chase, Morgan Stanley, and Wells Fargo have pledged over the past year to end funding for new drilling and exploration projects in the Arctic.  Alaska Sen. Dan Sullivan has been lobbying the Trump administration to examine whether the federal government can prevent banks from cutting off financing.

“That these banks would discriminate against one of the most important sectors of the U.S. economy is absurd,” Mr. Sullivan said in an interview. “I thought it was important to push back.” The American Petroleum Institute, one of industry’s most influential lobbying groups, has said it is working with the Trump administration on the issue, which it called a “bad precedent.” API, Mr. Sullivan and others have also suggested the White House should examine whether it could cut off the banks’ access to funding under coronavirus relief packages.

Wall Street has been pulling back from the oil-and-gas industry after years of dismal returns from it and is under increasing pressure from environmentalists and others to limit fossil-fuel lending. While broader market conditions during the coronavirus pandemic this year have dried up capital for new exploration, some analysts have said a lack of bank financing could deter drilling in the Arctic National Wildlife Refuge, which the administration opened to exploration in August 2020…

Capital flight remains one of the primary risks facing the oil industry, according to Moody’s Corp. If the world were to accelerate a transition to renewable sources of energy, oil-and-gas reserves could become uneconomic and turn into a credit liability for producers, making it difficult to access longer-maturity loans, Moody’s said.

Alaska’s economy is almost entirely dependent on the fossil-fuel industry, which has historically funded about 90% of the state’s general fund through tax revenues. Energy executives worry the pledges that banks are making could spread to other regions and parts of the industry as pressure mounts from environmental groups, and companies face the prospect of tighter government regulations. This week, JPMorgan pledged to push clients to align with the Paris climate accord and work toward global net zero-emissions by 2050.

“If it is successful, why would they stop with the Arctic?” said wildcatter Bill Armstrong, founder of Armstrong Oil & Gas Inc., which has discovered more than 3 billion barrels of oil in Alaska. “A lot of misguided people are trying to make oil and gas the new tobacco.

Excerpt from Christopher M. Matthews and Orla McCaffrey, Banks’ Arctic Financing Retreat Rattles Oil Industry, WSJ, Oct. 9 2020

When Restoration Is Eradication: Palmyra Atoll

On the Palmyra Atoll in the central Pacific Ocean, conservation biologists are in the midst of a massive, unprecedented experiment. They are trying to rid this remote island of all but a few coconut palms. The gangly tree is an icon of idyllic tropical islands, but also an aggressive invasive species that crowds out native plants and animals. By removing 99% of Palmyra’s millions of palms, biologists hope to create more room on the atoll’s three dozen islets for indigenous forests and seabirds, including the world’s second largest colony of red-footed boobies…

Red footed booby

Ripping out the palms has long been on the list of restoration projects on Palmyra. First, however, managers decided to attack another invader, black rats, which likely arrived on ships during World War II. With no predators, rats multiplied into the tens of thousands. They ate the seeds and gnawed the saplings of native trees and attacked seabird colonies, including those of sooty terns, which nest on the ground. Rats are the key suspects behind the absence on Palmyra of eight other species of ground or burrow-nesting birds, including shearwaters and petrels, all found on central Pacific islands that have remained rat-free. The first attempt to eradicate the rats in 2002 failed, partly because Palmyra’s abundant land crabs out-competed the rodents for the poisonous bait. The crabs’ physiology allowed them to eat the poison—the anticoagulant brodifacoum—without ill effect.

The second effort was successful only after [researchers] radio-collared rats and discovered that the rodents liked to hang out in the crowns of coconut palms. The crowns became a convenient platform for stashing cotton gauze sacks of poison bait, delivered by workers firing slingshots or dangling from helicopters. Crabs do not reach the palm tops.

Once rats were exterminated in 2011, researchers watched with delight as native tree saplings began to spring from the forest floor. There were also happy surprises. Scientists discovered two additional species of land crabs that had likely gone undetected because voracious rats suppressed their numbers. And researchers realized they were no longer being bitten by Asian tiger mosquitoes, a pest that attacks during the day and can carry dengue and yellow fever. It appears the mosquitoes depended on rats rather than humans or birds for blood meals…

Excerpts from Ridding Paradise of Palms, Science, Aug. 28, 2020, at 1047

Electrical Bacteria as Ecosystem Engineers

Electric bacteria join cells end to end to build electrical cables able to carry current up to 5 centimetres through mud. The adaptation, never seen before in a microbe, allows these so-called cable bacteria to overcome a major challenge facing many organisms that live in mud: a lack of oxygen. Its absence would normally keep bacteria from metabolizing compounds, such as hydrogen sulfide, as food. But the cables, by linking the microbes to sediments richer in oxygen, allow them to carry out the reaction long distance…

The more researchers have looked for “electrified” mud, the more they have found it, in both saltwater and fresh. They have also identified a second kind of mud-loving electric microbe: nanowire bacteria, individual cells that grow protein structures capable of moving electrons over shorter distances. These nanowire microbes live seemingly everywhere—including in the human mouth… Scientists are pursuing practical applications, exploring the potential of cable and nanowire bacteria to battle pollution and power electronic devices…

The Center for Electromicrobiology was established in 2017 by the Danish government. Among the challenges the center is tackling is mass producing the microbes in culture…Cultured bacteria would also make it easier to isolate the cable’s wires and test potential applications for bioremediation and biotechnology…

Electrical bacteria are everywhere. In 2014, for example, scientists found cable bacteria in three very different habitats in the North Sea: an intertidal salt marsh, a seafloor basin where oxygen levels drop to near zero at some times of the year, and a submerged mud plain just off the coast…Elsewhere, researchers have found DNA evidence of cable bacteria in deep, oxygen-poor ocean basins, hydrothermal vent areas, and cold seeps, as well as mangrove and tidal flats in both temperate and subtropical regions.

Nanowire bacteria are even more broadly distributed. Researchers have found them in soils, rice paddies, the deep subsurface, and even sewage treatment plants, as well as freshwater and marine sediments. They may exist wherever biofilms form, and the ubiquity of biofilms provides further evidence of the big role these bacteria may play in nature.

The microbes also alter the properties of mud, says Sairah Malkin, an ecologist at the University of Maryland Center for Environmental Science. “They are particularly efficient … ecosystem engineers.” Cable bacteria “grow like wildfire,” she says; on intertidal oyster reefs, she has found, a single cubic centimeter of mud can contain 2859 meters of cables, which cements particles in place, possibly making sediment more stable for marine organisms.

Excerpts from Elizabeth Pennisi, The Mud is Electric: Bacteria that Conduct Electricity are transforming the way we see sediments, Science, Aug. 21, 2020, at 902

Buy Carbon Stored in Trees and Leave it There

For much of human history, the way to make money from a tree was to chop it down. Now, with companies rushing to offset their carbon emissions, there is value in leaving them standing. The good news for trees is that the going rate for intact forests has become competitive with what mills pay for logs in corners of Alaska and Appalachia, the Adirondacks and up toward Acadia. That is spurring landowners to make century-long conservation deals with fossil-fuel companies, which help the latter comply with regulatory demands to reduce their carbon emissions.

For now, California is the only U.S. state with a so-called cap-and-trade system that aims to reduce greenhouse gasses by making it more expensive over time for firms operating in the state to pollute. Preserving trees is rewarded with carbon-offset credits, a climate-change currency that companies can purchase and apply toward a tiny portion of their tab. But lately, big energy companies, betting that the idea will spread, are looking to preserve vast tracts of forest beyond what they need for California, as part of a burgeoning, speculative market in so-called voluntary offsets.

One of the most enthusiastic, BP PLC, has already bought more than 40 million California offset credits since 2016 at a cost of hundreds of millions of dollars. In 2019, the energy giant invested $5 million in Pennsylvania’s Finite Carbon, a pioneer in the business of helping landowners create and sell credits. The investment is aimed at helping Finite hire more foresters, begin using satellites to measure biomass and drum up more credits for use in the voluntary market.  BP has asked Finite to produce voluntary credits ASAP so they can be available for its own carbon ledger and to trade among other companies eager to improve their emissions math. As part of its shift into non-fossil-fuel markets, BP expects to trade offset credits the way it presently does oil and gas.“The investment is to grow a new market,” said Nacho Gimenez, a managing director at the oil company’s venture-capital arm. “BP wants to live in this space.”

Skeptics contend the practice does little to reduce greenhouse gases: that the trees are already sequestering carbon and shouldn’t be counted to let companies off the hook for emissions. They argue that a lot of forest protected by offsets wasn’t at high risk of being clear-cut, because doing so isn’t the usual business of its owners, like land trusts, or because the timber was remote or otherwise not particularly valuable.

If other governments join California and institute cap-and-trade markets, voluntary offsets could shoot up in value. It could be like holding hot tech shares ahead of an overbought IPO. Like unlisted stock, voluntary credits trade infrequently and in a wide price range, lately averaging about $6 a ton, Mr. Carney said. California credits changed hands at an average of $14.15 in 2019 and were up to $15 before the coronavirus lockdown drove them lower. They have lately traded for about $13.

These days, voluntary offsets are mostly good for meeting companies’ self-set carbon-reduction goals. BP is targeting carbon neutrality by 2050. Between operations and the burning of its oil-and-gas output by motorists and power plants, the British company says it is annually responsible for 415 million metric tons of carbon emissions.

Excerpts from Emissions Rules Turn Saving Trees into Big Business, WSJ, Aug. 24, 2020

The Green Climate Fund and COVID-19

 The Green Climate Fund has promised developing nations it will ramp up efforts to help them tackle climate challenges as they strive to recover from the coronavirus pandemic, approving $879 million in backing for 15 new projects around the world…The Green Climate Fund (GCF) was set up under U.N. climate talks in 2010 to help developing nations tackle global warming, and started allocating money in 2015….

Small island states have criticised the pace and size of GCF assistance…Fiji’s U.N. Ambassador Satyendra Prasad said COVID-19 risked worsening the already high debt burden of small island nations, as tourism dived…The GCF  approved in August 2020 three new projects for island nations, including strengthening buildings to withstand hurricanes in Antigua and Barbuda, and installing solar power systems on farmland on Fiji’s Ovalau island.

It also gave the green light to payments rewarding reductions in deforestation in Colombia and Indonesia between 2014 and 2016. But more than 80 green groups opposed such funding. They said deforestation had since spiked and countries should not be rewarded for “paper reductions” in carbon emissions calculated from favourable baselines…. [T]he fund should take a hard look at whether the forest emission reductions it is paying for would be permanent.  It should also ensure the funding protects and benefits forest communities and indigenous people…

Other new projects included one for zero-deforestation cocoa production in Ivory Coast, providing rural villages in Senegal and Afghanistan with solar mini-grids, and conserving biodiversity on Indian Ocean islands.  The fund said initiatives like these would create jobs and support a green recovery from the coronavirus crisis.

Excerpts from Climate fund for poor nations vows to drive green COVID recovery, Reuters, Aug. 22, 2020

Forest Infernos and Food Self-Sufficiency

The Mega-Rice Project (MRP) — the conversion of 10,000 square km of peat forest into rice paddies — that was adopted in Indonesia in 1997, was a mega-failure. It produced hardly any rice because the peaty soil lacks the requisite minerals. Instead of spurring farming, the draining of the waterlogged forest with a 6,000km network of canals fuelled fire…. It was the biggest environmental disaster in Indonesia’s history.  Burning peat in 1997 on Kalimantan and the nearby island of Sumatra generated the equivalent of 13-40% of the average annual global emissions from fossil fuels. The MRP was abandoned in 1999 but its legacy endures in the infernos that have ravaged Kalimantan almost every year since.

As work begins in 2020 on the new plantation, is history poised to repeat itself? The government says it has learned from the past. Nazir Foead of the Peatland Restoration Agency says that tractors will steer clear of what remains of Central Kalimantan’s pristine peatlands…but the rest is covered in “shallow peat”, no more than 50cm deep, and so can be cultivated without cataclysm, he says.  Environmentalists are not convinced… Smouldering swamps belch vast amounts of carbon. In 2019, the fires that swept Indonesia emitted 22% more carbon than the conflagration in the Amazon rainforest did. 

But the government argues it must go ahead with the plantation, and quickly, in case covid-19 brings about food shortages… For decades the political elites “have been chasing this ideal of food self-sufficiency”, says Jenny Goldstein of Cornell University. Prabowo Subianto, the defence minister, is one of its greatest champions.

Excerpts from For Peat’s Sake: Indonesia’s Environment, Economist, Aug. 15, 2020

Water Conflicts: Who Owns the Nile River

The Grand Ethiopian Renaissance Dam is a giant edifice that would span the Blue Nile, the main tributary of the Nile river.  Half a century in the making, the hydro-electric dam is Africa’s largest, with a reservoir able to hold 74bn cubic metres of water, more than the volume of the entire Blue Nile. Once filled it should produce 6,000 megawatts of electricity, double Ethiopia’s current power supply. Millions of people could be connected to the grid for the first time. More than an engineering project, it is a source of national pride.

For Egypt, however, it seems a source of national danger. Over 90% of the country’s 100m people live along the Nile or in its vast delta. The river, long seen as an Egyptian birthright, supplies most of their water. They fear the dam will choke it off. Pro-regime pundits, not known for their subtlety, have urged the army to blow it up….Ethiopia wants to start filling the reservoir during this summer’s rainy season. On June 26th, 2020 after another round of talks, Egypt, Ethiopia and Sudan pledged to reach a deal within two weeks. Ethiopia agreed not to start filling the dam during that period.

Diplomats say most of the issues are resolved. But the outstanding one is big: how to handle a drought. Egypt wants Ethiopia to promise to release certain amounts of water to top up the Nile. But Ethiopia is loth to “owe” water to downstream countries or to drain the reservoir so much that electric output suffers. It wants a broader deal between all riparian states, including those on the White Nile, which flows out of Lake Victoria down through Uganda and Sudan.

Even if talks fail and Ethiopia starts filling without a deal, Egyptians will not find their taps dry. There is enough water in the reservoir behind Egypt’s Aswan High Dam to make up for any shortfall this year. But the mood in both countries is toxic. Egyptians have cast Ethiopia as a thief bent on drying up their country. In Ethiopia, meanwhile, Egypt is portrayed as a neocolonial power trampling on national sovereignty. The outcome of the talks will have political consequences in both countries, and perhaps push them to the brink of conflict—at a time when Egypt is already contemplating involvement in a war in Libya.

Ethiopia’s grand dam became a reality and a national obsession under Meles Zenawi, the longtime prime minister who ruled until 2012. His political masterstroke was asking Ethiopians to finance it through donations and the purchase of low-denomination bonds…. Most contributed voluntarily, but there was always an element of coercion. Civil servants had to donate a month’s salary at the start. Local banks and other businesses were expected to buy bonds worth millions of birr. ….

Excerpts from The Grand Ethiopian Renaissance Dam: Showdown on the Nile, Economist, July 4, 2020

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An Impossible Made Possible: the Green Energy Revolution

Since the cost of renewable energy can now be competitive with fossil fuels. Government, corporate and consumer interests finally seem to be aligning.  The stock market has noticed. After years of underperformance, indexes that track clean-energy stocks bottomed out in late 2018. The S&P Global Clean Energy index, which covers 30 big utilities and green-technology stocks, is now up 37% over two years, including dividends, compared with 18% for the S&P 500.

This year’s Covid crisis will delay some renewable projects, but could speed up the energy transition in other ways. Alternative-energy spending has held up much better than spending on oil and gas. Globally, clean-energy investment is now expected to account for half of total investment in the entire energy sector this year, according to UBS.  Moreover, the crisis has pushed governments to spend money, including on renewable technologies. The massive stimulus plan announced by the European Union last month is decidedly green. The German government increased electric-car subsidies as part of its pandemic-related stimulus package rather than rolling out a 2009-style “cash-for-clunkers” program. China’s plans include clean-energy incentives, too.

Solar and wind are now mature technologies that provide predictable long-term returns. Big lithium-ion batteries, such as those that power Teslas, are industrializing rapidly. More speculatively, hydrogen is a promising green fuel for hard-to-decarbonize sectors such as long-haul transport, aviation, steel and cement.  Many big companies—the likes of Royal Dutch Shell, Air Liquide and Toyota —have green initiatives worth many hundreds of millions of dollars. They are, however, a relatively small part of these large businesses, some of whose other assets may be rendered obsolete by the energy transition… Early-stage electric-truck maker Nikola jumped on its market debut this month to a valuation at one point exceeding that of Ford.

Investors might be better off looking at the established specialists in between. Vestas is the world’s leading manufacturer of wind turbines. Orsted, another Danish company, has made the transition from oil-and-gas producer to wind-energy supplier and aspires to be the first green-energy supermajor. More speculatively, Canadian company Ballard has three decades of experience making hydrogen fuel cells.

Rochelle Toplensky, Green Energy Is Finally Going Mainstream, WSJ, June 24, 2020

The $4 Trillion Blackmail: The Amazon is Ours not Brazil’s

More than two dozen financial institutions around the world are demanding the Brazilian government rein in surging deforestation, which they said has created “widespread uncertainty about the conditions for investing in or providing financial services to Brazil”. The call for action, delivered in a letter to the Brazilian government on June 23, 2020, comes as concerns grow that investors may begin to divest from Latin America’s largest economy if Jair Bolsonaro’s administration fails to curb environmental destruction. “As financial institutions, who have a fiduciary duty to act in the best long-term interests of our beneficiaries, we recognise the crucial role that tropical forests play in tackling climate change, protecting biodiversity and ensuring ecosystem services,” said the letter, signed by 29 financial institutions managing more than $3.7tn in total assets.

“Considering increasing deforestation rates in Brazil, we are concerned that companies exposed to potential deforestation in their Brazilian operations and supply chains will face increasing difficulty accessing international markets. Brazilian sovereign bonds are also likely to be deemed high risk if deforestation continues.” Deforestation in the Amazon rainforest has surged in Brazil since the election of Mr Bolsonaro, a rightwing former army captain, who supports opening the protected lands to commercial activity. In the first four months of 2020, an area twice the size of New York City was razed as illegal loggers and wildcat gold miners

Investors said they are particularly concerned about Brazil’s meatpacking industry, which risks being shut out of international markets over its alleged role in deforestation. Brazil’s JBS has been repeatedly accused by environmentalists of buying cows from deforested lands in the Amazon. In May 2020 more than 40 European companies, including Tesco and Marks and Spencer, warned they would boycott Brazilian products if the government did not act on deforestation. 

Excerpts from Investors warn Brazil to stop Amazon destruction, FT, June 23, 2020

Leave No Oil Under-Ground: OPEC against US Frackers

In 2014-16, the OPEC waged a failed price war to wipe out American frackers. Since then the cartel and its partners, led by Russia, have propped up oil prices enough to sustain shale, but not enough to support many members’ domestic budgets. In March 2020 Saudi Arabia urged Russia to slash output; Russia refused, loth to let Americans free-ride on OPEC-supported prices. The ensuing price war was spectacularly ill-timed, as it coincided with the biggest drop in oil demand on record.  The desire to chasten American frackers remains, though. OPEC controls about 70% of the world’s oil reserves, more than its 40% market share would suggest… If the world’s appetite for oil shrinks due to changing habits, cleaner technology or greener regulations, countries with vast reserves risk having to leave oil below ground. 

Excerpts from Crude Oil: After the Fall, Economist, June, 13, 2020

Praying for Renewable Energy

In the wake of the Fukushima nuclear disaster in 2011, Fukushima prefecture itself pledged to get all its power from renewable sources by 2040.  The hoped-for transformation, however, has been “slow and almost invisible.”…Renewable generation has grown from 10% of the power supply in 2010 to 17% in 2018, almost half of which comes from old hydropower schemes. Most nuclear plants, which provided more than a quarter of the country’s power before the 2011 disaster, have been shut down… But for the most part they have been replaced not by wind turbines and solar panels but by power stations that burn coal and natural gas. The current government wants nuclear plants to provide at least 20% of electricity by 2030. It also wants coal’s share of generation to grow, and has approved plans to build 22 new coal-fired plants over the next five years. The target for renewables, by contrast, is 22-24%, below the current global average, and far lower than in many European countries.

Geography and geology provide part of the answer. Japan is densely populated and mountainous. That makes solar and onshore wind farms costlier to build than in places with lots of flat, empty land. The sea floor drops away more steeply off Japan’s coasts than it does in places where offshore wind has boomed, such as the North Sea. And although geothermal power holds promise, the most suitable sites tend to be in national parks or near privately owned hot springs.

Government policies also help stifle the growth of renewable energy. Since the end of the second world war, privately owned, vertically integrated regional utilities have dominated the electricity market. These ten behemoths provide stable power within their regions, but do little to co-ordinate supply and demand across their borders…The limited transmission between regions makes it even harder than usual to cope with intermittent generation from wind turbines and solar panels. It also reduces competition, which suits the incumbent utilities just fine…Recent reforms have attempted to promote renewables both directly and indirectly…The “feed-in tariff”, obliging utilities to pay a generous fixed price for certain forms of renewable energy—a policy that has prompted investors to pile into solar and wind in other countries. In 2016, the government fully liberalised the retail electricity market. It has also set up new regulatory bodies to promote transmission between regions and to police energy markets. In April 2020 a law came into force that requires utilities to run their generation, transmission and distribution units as separate businesses. These reforms constitute a policy of “radical incrementalism”.

Critics say the steps have been too incremental and not radical enough. Utilities continue to make it time-consuming and costly for new entrants to get access to the grid, imposing rules that are “not fair for newcomers”, according to Takahashi Hiroshi of Tsuru University. Existing power plants are favoured over new facilities, and the share of renewables is limited, on the ground that their intermittency threatens the grid’s stability.

But even if the government is timid, investors can still make a difference…. Several of Japan’s big multinationals have pledged to switch to clean power on a scale and schedule that put the government’s targets to shame. Environmental activism has made banks and businesses wary of investments in coal. Even big utilities have come to see business opportunities in renewables, especially in the government’s imminent auction of sites for offshore wind plants. Two of them, Tohoku Electric Power and Tokyo Electric Power (TEPCO), have announced plans this year to issue “green bonds” to finance renewables projects. In March 2020, TEPCO established a joint venture with Orsted, a Danish oil firm that has become a pioneer in offshore wind. 

Exceprts from Renewable Energy in Japan: No Mill Will, Economist, June 13, 2020

Amazon Rainforest: Source of Food for Vegans, Meat-Lovers

In the first four months of 2020 an estimated 1,202 square km (464 square miles) were cleared in the Brazilian Amazon, 55% more than during the same period in 2019, which was the worst year in a decade…Less attention has been paid to the role of big firms like JBS and Cargill, global intermediaries for beef and soya, the commodities that drive deforestation.  The companies do not chop down trees themselves. Rather, they are middlemen in complex supply chains that deal in soya and beef produced on deforested land. The process begins when speculators, who tend to operate outside the law, buy or seize land, sell the timber, graze cattle on it for several years and then sell it to a soya farmer. Land in the Amazon is five to ten times more valuable once it is deforested, says Daniel Nepstad, an ecologist. Not chopping down trees would have a large opportunity cost. In 2009 Mr Nepstad estimated that cost (in terms of forgone beef and soy output) would be $275bn over 30 years, about 16% of that year’s GDP.

Under pressure from public opinion, the big firms have made attempts to control the problem. In 2009, a damning report from Greenpeace led JBS, Marfrig and Minerva, meat giants which together handle two-thirds of Brazil’s exports, to pledge to stop buying from suppliers that deforest illegally. (The forest code allows owners to clear 20% of their land.) JBS, which sources from an area in the Amazon larger than Germany, says it has blocked 9,000 suppliers, using satellites to detect clearing.

The problem is especially acute in ranching, which accounts for roughly 80% of deforestation in the Amazon, nearly all of it illegal. “Cows move around,” explains Paulo Pianez of Marfrig. Every fattening farm the big meatpackers buy from has, on average, 23 of its own suppliers. Current monitoring doesn’t cover ranchers who breed and graze cattle, so it misses 85-90% of deforestation. Rogue fattening farms can also “launder” cattle by moving them to lawful farms—perhaps their own—right before selling them. A new Greenpeace report alleges that through this mechanism JBS, Marfrig and Minerva ended up selling beef from farms that deforested a protected Amazon reserve on the border between Brazil and Bolivia. They said they had not known about any illegality.

One reason that soya giants seem more serious than meat producers about reducing deforestation a network of investors concerned about sustainability, is that most soya is exported. The EU is the second-top destination after China. But companies struggle to get people to pay more for a “hidden commodity”… But few people will pay extra for chicken made with sustainable soya, which explains why just 2-3% is certified deforestation-free. ….Four-fifths of Brazilian beef, by contrast, is eaten in Brazil. Exports go mostly to China, Russia and the Middle East, where feeding people is a higher priority than saving trees. Investors, for their part, see beef firms as unsexy businesses with thin margins

According to soya growers, multinational firms failed to raise $250m to launch a fund for compensating farmers who retain woodland. “They demand, demand, demand, but don’t offer anything in return,” complains Ricardo Arioli….

Reducing deforestation will require consensus on tricky issues like the fate of tens of thousands of poor settlers on public lands in the Amazon, where half of deforestation takes place….

Excerpts from The AmazonL Of Chainshaws and Supply Chains, Economist, JUne 13, 2020

Preserving Seeds that Feed the World: the Svalbard Global Seed Vault

Six hundred miles from the North Pole, on an island the size of West Virginia, at the end of a tunnel bored into a mountain, lies a vault filled with more than 1 million samples of seeds harvested from 6,374 species of plants grown in 249 locations around the globe.The collection, the largest of its kind, is intended to safeguard the genetic diversity of the crops that feed the world.  If disaster wipes out a plant, seeds from the vault could be used to restore the species. If pests, disease or climate change imperil a food source, a resistant trait found among the collection could thwart the threat.

While some countries have their own seed banks—Colorado State University houses one for the U.S.—the Svalbard Global Seed Vault serves as a backup. The vault, built in 2008 at a cost of about $9 million, is owned and maintained by Norway, but its contents belong to the countries and places that provide the samples.  “It works like a safe-deposit box at the bank,” said Cary Fowler, an American agriculturalist who helped found the vault. “Norway owns the facility, but not the boxes of the seeds.”

In 2015, after the International Center for Agricultural Research in the Dry Areas was destroyed in the Syrian civil war, scientists who had fled the country withdrew seeds to regenerate the plants in Lebanon and Morocco.  “It had one of the world’s biggest and best collections of wheat, barley, lentils, chickpeas, faba beans and grass pea,” Dr. Fowler said. “It was the chief supplier of a disease-resistant wheat variety for the Middle East.”  In 2017, the group returned copies of its seeds to the vault.

The 18,540-square-foot seed vault includes three rooms with the capacity to house 4.5 million samples of 500 seeds each—a maximum of 2.25 billion seeds. The environment’s natural temperature remains below freezing year round, but the seeds are stored at a chillier -18 degrees Celsius, or around -0.4 degrees Fahrenheit. They’re expected to last for decades, centuries or perhaps even millennia….

While dwindling diversity might not seem like an imminent threat, four chemical companies now control more than 60% of global proprietary seed sales…That concentration of power, some worry, could lead to less agricultural variety and more genetic uniformity…In the meantime, the seed vault (which doesn’t store genetically modified seeds) will continue to accept deposits in an effort to preserve all of the options it can.

Excerpts from Craven McGinty, Plan to Save World’s Crops Lives in Norwegian Bunker, WSJ,  May 29, 2020

Choking the Water: Dams, Dams and More Dams

Since Tibet is part of China, Chinese engineers have been making the most of that potential. They have built big dams not only on rivers like the Yellow and the Yangzi, which flow across China to the Pacific, but also on others, like the Brahmaputra and the Mekong, which pass through several more countries on their way to the sea.

China has every right to do so. Countries lucky enough to control the sources of big rivers often make use of the water for hydropower or irrigation before it sloshes away across a border. But If the countries nearest the source of water, like China,  suck up too much of the flow, or even simply stop silt flowing down or fish swimming up by building dams, the consequences in the lower reaches of the river can be grim: parched crops, collapsed fisheries, salty farmland.

Tension and recrimination have been the order of the day for China and its neighbours… In part, this is because a river like the Mekong does not contain enough water to go round. China has already built 11 dams across the main river (never mind its tributaries) and has plans for eight more; the downstream states have built two and are contemplating seven more. Last year, during a drought, the river ran so low that Cambodia had to turn off a big hydropower plant. Even when rainfall is normal, the altered flow and diminished siltation are causing saltwater to intrude into the Mekong delta, which is the breadbasket of Vietnam, and depleting the fish stocks that provide the only protein for millions of poor Cambodians.

China has long resisted any formal commitment to curb its construction of dams or to guarantee downstream countries a minimum allocation of water. It will not even join the Mekong River Commission, a body intended to help riparian countries resolve water-sharing disputes…

China has not signed any agreements about managing the Mekong with the other countries it flows through, so is not obliged to share a particular amount of water with them, nor even provide data on the flow or any warning about the operations of its dams. It does provide the Mekong River Commission with a trickle of information about water levels and planned releases from dams, which helps with flood-control lower down the river

Excerps from Water Torture: Hydropower in Asia, Economist, May 16, 2020; Torrent to Tickle: the Mekong, Economist, May 16, 2020

The Game of Chicken in the Melting Arctic

In 2018 the NATO alliance, joined by Sweden and Finland, held Trident Juncture, its largest exercise since the end of the cold war, in Norway. That involved the first deployment of an American aircraft-carrier in the Arctic Circle for three decades. Western warships have been frequent visitors since. On May 1, 2020 a “surface action group” of two American destroyers, a nuclear submarine, support ship and long-range maritime patrol aircraft, plus a British frigate, practised their submarine hunting skills in the Norwegian Sea.

Such drills are not unusual. But on May 4, 2020 some of those ships broke off and sailed further north into the Barents Sea, along with a third destroyer. Although American and British submarines routinely skulk around the area, to spy on Russian facilities and exercises covertly, surface ships have not done so in a generation. On May 7, 2020 Russia’s navy greeted the unwelcome visitors by announcing that it too would be conducting exercises in the Barents Sea—live-fire ones, in fact. On May 8, 2020… the NATO vessels departed.

It is a significant move. The deployment of destroyers which carry missile-defence systems and land-attack cruise missiles is especially assertive. After all, the area is the heart of Russian naval power, including the country’s submarine-based nuclear weapons. Russia’s Northern Fleet is based at Severomorsk on the Kola peninsula, to the east of Norway’s uppermost fringes.

Western navies are eager to show that covid-19 has not blunted their swords, at a time when America and France have each lost an aircraft-carrier to the virus. But their interest in the high north predates the pandemic. One purpose of the foray into the Barents Sea was “to assert freedom of navigation”, said America’s navy. Russia has been imposing rules on ships that wish to transit the Northern Sea Route (NSR), an Arctic passage between the Atlantic and Pacific that is becoming increasingly navigable as global warming melts ice-sheets . America scoffs at these demands, insisting that foreign warships have the right to pass innocently through territorial waters under the law of the sea. Although last week’s exercise did not enter the NSR, it may hint at a willingness to do so in the future.

On top of that, the Arctic is a growing factor in NATO defence policy. Russia has beefed up its Northern Fleet in recent years…Russian submarine activity is at its highest level since the cold war…Ten subs reportedly surged into the north Atlantic in October 2019  to test whether they could elude detection….Russia’s new subs are quiet and well-armed. As a result, NATO’s “acoustic edge”—its ability to detect subs at longer ranges than Russia—“has narrowed dramatically.”

Russia primarily uses its attack submarines to defend a “bastion”, the area in the Barents Sea and Sea of Okhotsk where its own nuclear-armed ballistic-missile submarines patrol.  A separate Russian naval force known as the Main Directorate of Deep-Sea Research (GUGI, in its Russian acronym) might also target the thicket of cables that cross the Atlantic.

The challenge is a familiar one. For much of the cold war, NATO allies sought to bottle up the Soviet fleet in the Arctic by establishing a picket across the so-called GIUK gap, a transit route between Greenland, Iceland and Britain that was strung with undersea listening posts….The gap is now back in fashion and NATO is reinvesting in anti-submarine capabilities after decades of neglect. America has stepped up flights of P8 submarine hunting aircraft from Iceland, and Britain and Norway are establishing P8 squadrons of their own. The aim is to track and hold at risk Russian nuclear subs as early as possible, because even a single one in the Atlantic could cause problems across a large swathe of ocean.

GIUK (Greenland, Iceland, UK) gap. Image from wikipedia.

But a defensive perimeter may not be enough. A new generation of Russian ship-based missiles could strike NATO ships or territory from far north of the GIUK gap, perhaps even from the safety of home ports. “This technological development represents a dramatically new and challenging threat to NATO forces…. Similar concerns led the Reagan administration to adopt a more offensive naval posture, sending forces above the gap and into the maritime bastion of the Soviet Union. 

Excerpts from Naval Strategy: Northern Fights, Economist, May 16, 2020

Builiding a Nuclear War Chest: the US Uranium Reserve

The US electricity production from nuclear plants hit at an all-time high in 2019… generating more than 809 billion kilowatt-hours of electricity, which is enough to power more than 66 million homes.  Yet, despite operating the largest fleet of reactors in the world at the highest level in the industry, US ability to produce domestic nuclear fuel is on the verge of a collapse.  

Uranium miners are eager for work, the United States’s only uranium conversion plant is idle due to poor market conditions, and its inability to compete with foreign state-owned enterprises (most notably from China and Russia) is not only threatening US energy security but weakening the ability to influence the peaceful uses of nuclear around the world. Restoring America’s Competitive Nuclear Energy Advantage was recently released by the U.S. Department of Energy (DOE) to preserve and grow the entire U.S. nuclear enterprise…. The first immediate step in this plan calls for DOE to establish a uranium reserve.   Under the Uranium Reserve program, the DOE Office of Nuclear Energy (NE) would buy uranium directly from domestic mines and contract for uranium conversion services. The new stockpile is expected to support the operation of at least two US uranium mines, reestablish active conversion capabilities, and ensure a backup supply of uranium for nuclear power operators in the event of a market disruption [such as that caused the COVID-19 pandemic]. 

NE will initiate a competitive procurement process for establishing the Uranium Reserve program within 2021.  Uranium production in the United States has been on a steady decline since the early 1980s as U.S. nuclear power plant operators replaced domestic uranium production with less expensive imports. State-owned foreign competitors, operating in different economic and regulatory environments, have also undercut prices, making it virtually impossible for U.S. producers to compete on a level-playing field.  As a result, 90% of the uranium fuel used today in U.S. reactors is produced by foreign countries.

Establishing the Uranium Reserve program is exactly what United States needs at this crucial time to de-risk its nuclear fuel supply. It will create jobs that support the U.S. economy and strengthen domestic mining and conversion services….The next 5-7 years will be a whirlwind of nuclear innovation as new fuels and reactors will be deployed across the United States.

Excerpts  from USA plans revival of uranium sector, World Nuclear News, May 12, 2020.  See also Building a Uranium Reserve: The First Step in Preserving the U.S. Nuclear Fuel Cycle, US Office of Nuclear Energy, May 11, 2020.

Will Saudi Arabia Own the United States?

In the coronavirus pandemic’s financial fallout, Saudi Arabia’s $300 billion sovereign-wealth fund has emerged as one of the world’s biggest bargain hunters, taking minority stakes worth billions of dollars in American corporations.  Saudi Arabia’s Public Investment Fund  (PIF)  in the first quarter of 2020 bought shares valued at about half a billion dollars each in Facebook, Walt Disney,  Marriott International,  and Cisco Systems.  The fund bought financial stocks, investing $522 million in Citigroup, and $488 million in Bank of America while also spending $714 million on a stake in Boeing…Crown Prince Mohammed bin Salman, the kingdom’s day-to-day ruler, tasked the sovereign-wealth fund in 2015 with diversifying the country’s economy away from oil by investing in companies and industries untethered to hydrocarbons.

PIF’s recent buying spree highlights a bold strategy of piling into global stocks even as the novel coronavirus and a crash in oil prices mean that Saudi Arabia’s financial position is now the most precarious in a decade. The Saudi government in May 2020 tripled its value-added tax rate and cut subsidies to state employees as it contends with lower oil revenue and an economy weakening under coronavirus lockdown.

Many of the stocks that PIF has targeted are trading at historic lows, bruised by the fallout from the coronavirus and rock-bottom oil prices that have battered stocks of energy companies in 2020. Teh PIF bought in 2020 undisclosed stakes in a bevy of energy companies, including Equinor (Norway), Royal Dutch Shell, Total (France) and Eni (France). The PIF invested $484 million in Shell, $222 million in Total and previously unreported stakes of $828 million in BP $481 million in Suncor Energy and $408 million in Canadian Natural Resources.

It also purchased shares valued at roughly $80 million each in: Warren Buffett’s Berkshire Hathaway; chipmakers Broadcom and Qualcom ; IBM; drugmaker Pfizer;  Starbucks; railroad company Union Pacific; outsourcer Automatic Data Processing; and Booking.com….On top of the stakes in public companies, PIF is also awaiting regulatory approval for a roughly £300 million ($363 million) buyout of U.K. Premier League soccer team Newcastle United.

Excerpts from Rory Jones and Summer Said, Saudi Sovereign-Wealth Fund Buys Stakes in Facebook, Boeing, Cisco Systems, WSJ, May 18, 2020

Wasted Energy: Methane Leakage in Permian Basin


The methane over the Permian Basin emitted by oil companies’ gas venting and flaring is double previous estimates, and represents a leakage rate about 60% higher than the national average from oil and gas fields, according to the research, which was publishe in the journal Science Advances. Methane is the primary component of natural gas. It also is a powerful driver of climate change that is 34 times more potent than carbon dioxide at warming the atmosphere over the span of a century. Eliminating methane pollution is essential to preventing the globe from warming more than 2 degrees Celsius (3.6 degrees Fahrenheit)—the primary target of the Paris climate accord, scientists say.

The researchers used satellite data gathered in 2018 and 2019 to measure and model methane escaping from gas fields in the Permian Basin, which stretches across public and private land in west Texas and southeastern New Mexico. The leaking and flaring of methane had a market value of nearly $250 million in April 2020.

Methane pollution is common in shale oil and gas fields such as those in the Permian Basin because energy companies vent and burn off excess natural gas when there are insufficient pipelines and processing equipment to bring the gas to market. About 30% of U.S. oil production occurs in the Permian Basin, and high levels of methane pollution have been recorded there in the past. Industry groups such as the Texas Methane and Flaring Coalition have criticized previous methane emission research. The coalition has repeatedly said (Environmental Defense Fund) EDF’s earlier Permian pollution data were exaggerated and flawed.

The Texas Railroad Commission, which regulates the oil and gas industry in Texas, allows companies to flare and vent their excess gas. The commission didn’t respond to a request for comment.

The use of satellites to measure methane is a different approach than the methods used by federal agencies, including the EPA, which base their estimates on expected leakage rates at oil and gas production equipment on the ground. A “top-down” approach to measuring methane using aircraft or satellite data almost always reveals higher levels of methane emissions than the EPA’s “bottom-up” approach.

Excerpts from Permian Oil Fields Leak Enough Methane for 7 Million Homes, Bloomberg Law, Apr. 22, 2020,

Oceans Restored: the 2050 Deadline

A study published in Nature on April 2, 2020 claims that marine ecosystems could recover in just 30 years because of the growing success of conservation efforts and the ocean’s remarkable resilience. Some of these conservation efforts include the increase in Marine Protected Areas (MPAs) from less than 1 percent in 2000 to almost 8 percent today and the restoration of key habitats such as seagrass beds and mangroves

One great success is the restoration of humpback whales that migrate between Antarctica and eastern Australia. Their numbers have rebounded from a few hundred in 1968 to more than 40,000 today. Sea otters in Western Canada have also jumped from dozens in 1980 to thousands. Green turtles in Japan, grey seals and cormorants in the Baltic and elephant seals in the United States have all also made remarkable comebacks. However, “If we don’t tackle climate change and raise the ambition and immediacy of these efforts, we risk wasting our efforts,” Duarte, one of the authors of the study, told BBC News. The initial price tag on all this is hefty: $10 to $20 billion a year until the 2050 recovery date.

Excerpts from Oceans Can Recover by 2050, Study Shows, EcoWatch, Apr. 2, 2020

Hunting Down Polluters from Space

When scanning for emissions from a mud volcano in western Turkmenistan in January 2019, a satellite called Claire came across a large plume of methane drifting across the landscape. … The company operating the satellite, GHGSAT passed details via diplomats to officials in Turkmenistan, and after a few months the leaks stopped. This largely unknown incident illustrates two things: that satellites can play an important role in spotting leaks of greenhouse gases and, rather worryingly, that the extent of such leaks is often greatly underestimated. The data from Claire suggested the leak in Turkmenistan had been a big one…142,000 tonnes of methane. This made the Turkmenistani leak far bigger than the 97,000 tonnes of methane discharged over four months by a notorious blowout at a natural-gas storage facility in Aliso Canyon, California, in 2015, which is reckoned to have been the worst natural-gas leak yet recorded in America. There have been other big leaks, too…

The reason for concern is that although methane, the main constituent of natural gas, does not linger in the atmosphere for anywhere near as long as carbon dioxide does, it is a far more potent heat-trapping agent. About a quarter of man-made global warming is thought to be caused by methane. And between a fifth and a third of the methane involved is contributed by the oil and gas industry. Methane can be detected spectroscopically. Like other gases, it absorbs light at characteristic frequencies. With a spectrometer mounted on a satellite it is possible to analyse light reflected from Earth for signs of the gas. As with the satellites that carry them, spectrometers come in many shapes and sizes. Tropomi can also detect the spectral signs of other polluting gases, such as nitrogen dioxide, sulphur dioxide and carbon monoxide.

Other methane-hunting satellites are coming. These include one due for launch in 2022 by Methanesat, an affiliate of the Environmental Defence Fund, an American non-profit organisation. The 350kg satellite will cost $88m to build and put into orbit. It will scan an area of land 200km wide with a resolution of 1km by 1km. According to Methanesat, it will be the most sensitive to emission levels yet, being able to detect methane concentrations as low as two parts-per-billion. Data collected by the satellite will be publicly available.

Excerpts from The Methane Hunters, Economist, Feb. 1 2020

What Shrimp and Beef Have in Common? carbon footprint

Shrimp farms tend to occupy coastal land that used to be covered in mangroves. Draining mangrove swamps to make way for aquaculture is even more harmful to the atmosphere than felling rainforest to provide pasture for cattle. A study conducted in 2017 by cifor, a research institute, found that in both these instances, by far the biggest contribution to the carbon footprint of the resulting beef or shrimp came from the clearing of the land. As a result, CIFOR concluded, a kilo of farmed shrimp was responsible for almost four times the greenhouse-gas emissions of a kilo of beef

Eating wild shrimp is not much better: catches are declining around the world as a result of overfishing. Trawlers can pull as much as 20kg of by-catch from the sea for every kilo of shrimp. And reports abound of the appalling treatment of workers on shrimp-fishing vessels, including human-trafficking and child labour. When UN investigators interviewed a sample of Cambodians who had escaped virtual slavery on Thai fishing boats, 59% of them reported seeing fellow crew-members murdered by the captain.


Most of the world’s shrimp and prawns come from Asia. The continent accounts for 85% of the farmed sort and 74% of the wild catch. Global sales were around $45bn in 2018 and are thought to be growing by about 5% a year. But the industry is controversial, not just because of its part in global warming. Razing mangroves also leaves coastal regions vulnerable to flooding. Many shrimp farms are unsanitary; ponds often have to be abandoned after a few years because of problems with disease and pollution.

All this has given one Singaporean company a brain wave. “Farmed shrimps are often bred in overcrowded conditions and literally swimming in sewage water. We want to disrupt that—to empower farmers with technology that is cleaner and more efficient,” says Sandhya Sriram, one of the founders of Shiok Meats. The firm aims to grow artificial shrimp, much as some Western firms are seeking to create beef without cows. The process involves propagating shrimp cells in a nutrient-rich solution. Ms Sriram likens it to a brewery, disdaining the phrase “lab-grown”….The hitch is that producing shrimp in this way currently costs $5,000 a kilo.

Excerpts from How artificial shrimps could change the world, Economist, Feb. 28, 2020

Human and Environmental Costs of Low-Carbon Technologies

Substantial amounts of raw materials will be required to build new low-carbon energy devices and infrastructure.  Such materials include cobalt, copper, lithium, cadmium, and rare earth elements (REEs)—needed for technologies such as solar photovoltaics, batteries, electric vehicle (EV) motors, wind turbines, fuel cells, and nuclear reactors…  A majority of the world’s cobalt is mined in the Democratic Republic of Congo (DRC), a country struggling to recover from years of armed conflict…Owing to a lack of preventative strategies and measures such as drilling with water and proper exhaust ventilation, many cobalt miners have extremely high levels of toxic metals in their body and are at risk of developing respiratory illness, heart disease, or cancer.

In addition, mining frequently results in severe environmental impacts and community dislocation. Moreover, metal production itself is energy intensive and difficult to decarbonize. Mining for copper,and mining for lithium has been criticized in Chile for depleting local groundwater resources across the Atacama Desert, destroying fragile ecosystems, and converting meadows and lagoons into salt flats. The extraction, crushing, refining, and processing of cadmium can pose risks such as groundwater or food contamination or worker exposure to hazardous chemicals. REE extraction in China has resulted  threatens rural groundwater aquifers as well as rivers and streams.

Although large-scale mining is often economically efficient, it has limited employment potential, only set to worsen with the recent arrival of fully automated mines. Even where there is relative political stability and stricter regulatory regimes in place, there can still be serious environmental failures, as exemplified by the recent global rise in dam failures at settling ponds for mine tailings. The level of distrust of extractive industries has even led to countrywide moratoria on all new mining projects, such as in El Salvador and the Philippines.

Traditional labor-intensive mechanisms of mining that involve less mechanization are called artisanal and small-scale mining (ASM). Although ASM is not immune from poor governance or environmental harm, it provides livelihood potential for at least 40 million people worldwide…. It is also usually more strongly embedded in local and national economies than foreign-owned, large-scale mining, with a greater level of value retained and distributed within the country. Diversifying mineral supply chains to allow for greater coexistence of small- and large-scale operations is needed. Yet, efforts to incorporate artisanal miners into the formal economy have often resulted in a scarcity of permits awarded, exorbitant costs for miners to legalize their operations, and extremely lengthy and bureaucratic processes for registration….There needs to be a focus on policies that recognize ASM’s livelihood potential in areas of extreme poverty. The recent decision of the London Metals Exchange to have a policy of “nondiscrimination” toward ASM is a positive sign in this regard.

A great deal of attention has focused on fostering transparency and accountability of mineral mining by means of voluntary traceability or even “ethical minerals” schemes. International groups, including Amnesty International, the United Nations, and the Organisation for Economic Co-operation and Development, have all called on mining companies to ensure that supply chains are not sourced from mines that involve illegal labor and/or child labor.

Traceability schemes, however, may be impossible to fully enforce in practice and could, in the extreme, merely become an exercise in public relations rather than improved governance and outcomes for miners…. Paramount among these is an acknowledgment that traceability schemes offer a largely technical solution to profoundly political problems and that these political issues cannot be circumvented or ignored if meaningful solutions for workers are to be found. Traceability schemes ultimately will have value if the market and consumers trust their authenticity and there are few potential opportunities for leakage in the system…

Extended producer responsibility (EPR) is a framework that stipulates that producers are responsible for the entire lifespan of a product, including at the end of its usefulness. EPR would, in particular, shift responsibility for collecting the valuable resource streams and materials inside used electronics from users or waste managers to the companies that produce the devices. EPR holds producers responsible for their products at the end of their useful life and encourages durability, extended product lifetimes, and designs that are easy to reuse, repair, or recover materials from. A successful EPR program known as PV Cycle has been in place in Europe for photovoltaics for about a decade and has helped drive a new market in used photovoltaics that has seen 30,000 metric tons of material recycled.

Benjamin K. Sovacool et al., Sustainable minerals and metals for a low-carbon future, Science, Jan. 3, 2020

540 Katrina Oil Spills Equal an Exxon Valdez Disaster

The federal agency overseeing oil and gas operations in the Gulf of Mexico after hurricane Katrina reported that more than 400 pipelines and 100 drilling platforms were damaged. The U.S. Coast Guard, the first responder for oil spills, received 540 separate reports of spills into Louisiana waters. Officials estimated that, taken together, those leaks released the same amount of oil that the highly publicized 1989 Exxon Valdez disaster spilled into Alaska’s Prince William Sound — about 10.8 million gallons…

While hurricanes gain speed due to the effects of climate change, the push for oil leasing in the Gulf of Mexico shows no sign of slowing down. In 2014, the Obama administration opened up 40 million new acres in the Gulf for oil and gas development. Four years later, the Trump administration announced plans to open up most of the rest, in what would be the largest expansion of offshore oil and gas drilling in U.S. history. Many of these 76 million acres are to be offered at reduced royalty rates to encourage additional near-shore drilling in Louisiana waters…

“In the Gulf, storms are predicted to be less frequent but more intense when they do come,” said Sunshine Van Bael, an ecologist at Tulane University who evaluated damage to marsh ecosystems from the BP oil spill. “One thing that storms do is, if oil has been buried underneath the marsh because it wasn’t rehabilitated, a storm could come along and whip that back up to the surface. So, the aftereffects of the oil spills might be greater [with climate change] since the storms are predicted to be more intense.”…

In 2009, a class-action lawsuit against Murphy Oil Corp. ended in a settlement requiring the company to pay $330 million to 6,200 claimants, including owners of about 1,800 homes in St. Bernard Parish. The damage occurred when one of Murphy’s storage tanks floated off its foundation during Katrina and dumped over a million gallons of crude oil into a square-mile segment of Meraux and Chalmette….

To date, more than $19 million has been paid out from the federal Oil Spill Liability Trust Fund to reimburse at least two oil companies for costs they incurred cleaning up oil they spilled during Katrina…

“We don’t normally penalize [companies] for act of God events,” Greg Langley of the Department of Environmental Quality said. “We just get right to remediation.”

Excerpts from Joan Meiners, How Oil Companies Avoided Environmental Accountability After 10.8 Million Gallons Spill, ProPublica, Dec. 27, 2019

How Sand Extraction Damages Ecosystems

The world uses nearly 50bn tonnes of sand and gravel a year—almost twice as much as a decade ago. No other natural resource is extracted and traded on such an epic scale, bar water. Demand is greatest in Asia, where cities are growing fast (sand is the biggest ingredient in concrete, asphalt and glass). China got through more cement between 2011 and 2013 than America did in the entire 20th century (the use of cement is highly correlated with that of sand).

Since the 1960s Singapore—the world’s largest importer of sand—has expanded its territory by almost a quarter, mainly by dumping it into the sea. The OECD thinks the construction industry’s demand for sand and gravel will double over the next 40 years. Little wonder then that the price of sand is rocketing. In Vietnam in 2017 it quadrupled in just one year.

In the popular imagination, sand is synonymous with limitlessness. In reality it is a scarce commodity, for which builders are now scrabbling. Not just any old grains will do. The United Arab Emirates is carpeted in dunes, but imports sand nonetheless because the kind buffeted by desert winds is too fine to be made into cement. Sand shaped by water is coarser and so binds better. Extraction from coastlines and rivers is therefore surging. But according to the United Nations Environment Programme (UNEP), Asians are scooping up sand faster than it can naturally replenish itself. In Indonesia some two dozen small islands have vanished since 2005. Vietnam expects to run out of sand this year.

All this has an environmental cost. Removing sand from riverbeds deprives fish of places to live, feed and spawn. It is thought to have contributed to the extinction of the Yangzi river dolphin. Moreover, according to WWF, a conservation group, as much as 90% of the sediment that once flowed through the Mekong, Yangzi and Ganges rivers is trapped behind dams or purloined by miners, thereby robbing their deltas both of the nutrients that make them fecund and of the replenishment that counters coastal erosion. As sea levels rise with climate change, saltwater is surging up rivers in Australia, Cambodia, Sri Lanka and Vietnam, among other places, and crop yields are falling in the areas affected. Vietnam’s agriculture ministry has warned that seawater may travel as far as 110km up the Mekong this winter. The last time that happened, in 2016, 1,600 square kilometres of land were ruined, resulting in losses of $237m. Locals have already reported seeing dead fish floating on the water.

 
Curbing sand-mining is difficult because so much of it is unregulated. Only about two-fifths of the sand extracted worldwide every year is thought to be traded legally, according to the Global Initiative Against Transnational Organised Crime. In Shanghai miners on the Yangzi evade the authorities by hacking transponders, which broadcast the positions of ships, and cloning their co-ordinates. It is preferable, of course, to co-opt officials. Ministers in several state governments in India have been accused of abetting or protecting illegal sand-mining. “Everybody has their finger in the pie,” says Sumaira Abdulali of Awaaz Foundation, a charity in Mumbai. She says she has been attacked twice for her efforts to stop the diggers.

Excerpts from Bring me a nightmare: Sand-Mining, Economist, Jan. 18, 2019

The Eco-Villain of the 2020s: Moving

[E]ven “green” transport risks becoming a villain… Transport has been the only sector in which greenhouse-gas emissions have consistently risen both in the U.S. and in the European Union… Road, aviation, waterborne and rail transportation put together now account for eight metric gigatons of carbon-dioxide equivalents, which is 24% of global greenhouse-gas emissions, according to the International Energy Agency. In the U.S. this figure rises to 34%….To be consistent with the existing Paris Agreement goals, transport emissions need to peak around 2020 and then fall around 70% relative to 2015 levels, estimates by the International Energy Agency show.

In theory, electric and plug-in hybrid vehicles chart a clear path to lower emissions. Even once the costs of making the batteries and generating the electricity that feeds them is taken into account, most estimates suggest that they emit roughly half as much greenhouse gases as a gasoline car. But recent experience proves that consumer tastes can easily sabotage steps toward sustainability: In the U.S., rising demand for pickup trucks has offset any gain from electric vehicles. And faster economic development in emerging nations will inevitably mean higher emissions, even if each vehicle pollutes less.

In China and India, the number of motorized vehicles per person quintupled and tripled, respectively, between 2007 and 2017, according to U.S. Department of Energy data. Catching up with U.S. levels of motorization—which admittedly are very high—both countries would need two billion extra vehicles. Even if 100% of those were electric, they would add more emissions on their own than the total level allowed by the Paris goals.

Greenhouse gases coming from aviation also keep surging despite the fact that planes are becoming increasingly fuel efficient because air traffic growth has surged. Furthermore, while environmental policies have tended to focus on passenger transport, this misses a big chunk of the picture, because almost half of transportation emissions now come from freight.

Adoption of rail, a cleaner alternative, isn’t picking up. Meanwhile ocean freight, which is by far the most efficient form of transport per ton mile, faces a reckoning from new rules that take effect in January 2020 because it relies on the dirtiest fuel to be so economical.

Excerpts from  Jon Sindreu, In the Green Transition, Transportation Is the Next Big Baddie, WSJ, Dec. 23, 2019

The Privilege of Polluting v. Decarbonization

The Paris climate agreement of 2015 calls for the Earth’s temperature to increase by no more than 2°C over pre-industrial levels, and ideally by as little as 1.5°C. Already, temperatures are 1°C above the pre-industrial, and they continue to climb, driven for the most part by CO2 emissions of 43bn tonnes a year. To stand a good chance of scraping under the 2°C target, let alone the 1.5°C target, just by curtailing greenhouse-gas emissions would require cuts far more stringent than the large emitting nations are currently offering.

Recognising this, the agreement envisages a future in which, as well as hugely reducing the amount of CO2 put into the atmosphere, nations also take a fair bit out. Scenarios looked at by the Intergovernmental Panel on Climate Change (IPCC) last year required between 100bn and 1trn tonnes of CO2 to be removed from the atmosphere by the end of the century if the Paris goals were to be reached; the median value was 730bn tonnes–that is, more than ten years of global emissions…

If you increase the amount of vegetation on the planet, you can suck down a certain amount of the excess CO2 from the atmosphere. Growing forests, or improving farmland, is often a good idea for other reasons, and can certainly store some carbon. But it is not a particularly reliable way of doing so. Forests can be cut back down, or burned—and they might also die off if, overall, mitigation efforts fail to keep the climate cool enough for their liking. …But the biggest problem with using new or restored forests as carbon stores is how big they have to be to make a serious difference. The area covered by new or restored forests in some of the ipcc scenarios was the size of Russia. And even such a heroic effort would only absorb on the order of 200bn tonnes of CO2 ; less than many consider necessary.

The world has about 2,500 coal-fired power stations, and thousands more gas-fired stations, steel plants, cement works and other installations that produce industrial amounts of CO2. Just 19 of them offer some level of Carbon Capture and Storage (CCS), according to the Global Carbon Capture and Storage Institute (GCSI), an advocacy group. All told, roughly 40m tonnes of CO2 are being captured from industrial sources every year—around 0.1% of emissions.

Why so little? There are no fundamental technological hurdles; but the heavy industrial kit needed to do CCS at scale costs a lot. If CO2 emitters had to pay for the privilege of emitting to the tune, say, of $100 a tonne, there would be a lot more interest in the technology, which would bring down its cost. In the absence of such a price, there are very few incentives or penalties to encourage such investment. The greens who lobby for action on the climate do not, for the most part, want to support CCS. They see it as a way for fossil-fuel companies to seem to be part of the solution while staying in business, a prospect they hate. Electricity generators have seen the remarkable drop in the price of wind and solar and invested accordingly.

Equinor, formerly Statoil, a Norwegian oil company, has long pumped CO2 into a spent field in the North Sea, both to prove the technology and to avoid the stiff carbon tax which Norway levies on emissions from the hydrocarbon industry. As a condition on its lease to develop the Gorgon natural-gas field off the coast of Australia, Chevron was required to strip the CO2 out of the gas and store it. The resultant project is, at 4m tonnes a year, bigger than any other not used for EOR. But at the same time, what the Gorgon project stores in a year, the world emits in an hour.

In Europe, the idea has caught on that the costs of operating big CO2 reservoirs like Gorgon’s will need to be shared between many carbon sources. This is prompting a trend towards clusters that could share the storage infrastructure. Equinor, Shell and Total, two more oil companies, are proposing to turn CCS into a service industry in Norway. For a fee they will collect CO2 from its producers and ship it to Bergen before pushing it out through a pipeline to offshore injection points. In September Equinor announced that it had seven potential customers, including Air Liquide, an industrial-gas provider, and ArcelorMittal, a steelmaker.

Similar projects for filling up the emptied gasfields of the North Sea are seeking government support in the Netherlands, where Rotterdam’s port authority is championing the idea, and in Britain, where the main movers are heavy industries in the north, including Drax.

The European Union has also recently announced financial support for CCS, in the form of a roughly €10bn innovation fund aimed at CC S, renewables and energy storage. The fund’s purpose is not to decarbonise fossil-fuel energy, but rather to focus on CCS development for the difficult-to-decarbonise industries such as steel and cement.

Excerpts from, The Chronic Complexity of Carbon Capture, Economist, Dec. 7, 2019

The Carbon-Neutral Europe and its Climate Bank

The European Union (EU) Green Deal, a  24-page document reads like a list of vows to transform Europe into a living demonstration of how a vast economy can both prosper and prioritise the health of the planet. It covers everything from housing and food to biodiversity, batteries, decarbonised steel, air pollution and, crucially, how the EU will spread its vision beyond its borders to the wider world….The plan is large on ambition, but in many places frustratingly vague on detail.

Top billing goes to a pledge to make Europe carbon-neutral by 2050….Current policies on renewable energy and energy efficiency should already help to achieve 45-48% cuts by 2030. Green NGOs  would like to see the EU sweat a bit more and strive for 65% cuts by 2030, which is what models suggest is needed if the bloc is to do its share to limit global warming to 1.5-2ºC.

All this green ambition comes at a price. The commission estimates that an additional €175bn-€290bn ($192bn-$320bn) of investment will be needed each year to meet its net-zero goals. Much of this will come from private investors. One way they will be encouraged to pitch in is with new financial regulations. On December 5th, 2019 EU negotiators struck a provisional agreement on what financial products are deemed “green”. Next year large European companies will be forced to disclose more information about their impacts on the environment, including carbon emissions. These measures, the thinking goes, will give clearer signals to markets and help money flow into worthy investments.

Another lever is the European Investment Bank, a development bank with about €550bn on its balance-sheet, which is to be transformed into a climate bank. Already it has pledged to phase out financing fossil fuels by 2021. By 2025 Werner Hoyer, its boss, wants 50% of its lending to go to green projects, up from 28% today, and the rest to go to investments aligned with climate-change goals. Some of that money will flow into a “just transition” fund, worth €100bn over seven years. Job losses are an unavoidable consequence of decarbonising Europe’s economy; the coal industry alone employs around 250,000 people, mainly in eastern Europe. The fund will try to ease some of this pain, and the political opposition it provokes.

The Green Deal goes beyond the scope of previous climate policies. One area it enters with gusto is trade. Under the commission’s proposals, the eu will simply refuse to strike new trade deals with countries that fail to comply with the Paris agreement’s requirement that signatories must increase the scale of their decarbonisation pledges, known as “nationally determined contributions” or NDCs, every five years. That would mean no new deals with America while Donald Trump is president; it is set to drop out of the Paris agreement late in 2020. And, because the first round of enhanced ndcs is due next year, it would put pressure on countries that are dragging their feet on these, of which there are dozens—including China and India.

The deal also sketches out plans for a carbon border-adjustment levy. Under the eu’s emission-trading scheme, large industries pay a fee of about €25 for every tonne of carbon dioxide they emit. Other regions have similar schemes with different carbon prices. A border-adjustment mechanism would level the playing field.

Excerpts from, The EU’s Green Deal, Economist, Dec. 2019

The Fight for the Remnant Trees of Europe

For 120 years RWE has been one of Europe’s biggest emitters of carbon dioxide. The German utility cleared almost all of Hambacher forest, a once-vast wood in western Germany, to mine lignite, an especially filthy fossil fuel, which it burned to generate electricity. What is left of “Hambi” has become a symbol of the anti-coal movement, occupied by activists camping in 80-odd tree houses.  RWE is under fire even where it does not operate. A Peruvian farmer has sued it in a German court for its contribution to climate change that led to the melting of an Andean glacier, which threatens to flood his home. He lost but is appealing.

Peruvian farmer who sued RWE

But  in September 2019, the EU agreed to a €43bn ($47.5bn) asset swap between RWE and its rival E.ON. It turns E.ON into Europe’s largest power-grid operator by assets and RWE into the world’s second-biggest producer of offshore wind power and Europe’s third-biggest producer of renewable energy. [RWE] has vowed to become carbon neutral by 2040

Of the eu’s 28 members, 18 have pledged to emit no net carbon by 2050. Germany says it will stop using coal by 2038 and stump up €40bn to ease the transition.   RWE is demanding a chunk of the transition pot. It still runs three lignite mines, which directly employ 9,900 people and indirectly support another 20,000 jobs in the Rhine region….  [To complicate matters further], in October 2019 a court ordered a halt to the clearing of its remaining 200 hectares of the forest…RWE says the forest could be left as it is—but at a price. It may cost the company €1.5bn or so to find an alternative to a planned expansion of an open-pit mine at Hambach.

Excerpts from  RWE: After Hambi, Economist, Nov. 23, at 59