Part Six
NINETEEN
The quality of life for hundreds of millions if not billions of people, the very possibility of life over the next few decades, depends on how we confront changing climate and our role in those changes. The odds are stacked against us. At the moment, the possibility of a climate catastrophe might be likened to two express trains racing toward each other on the same track. One train is propelled by our politics and economy, which gives business as usual powerful momentum. The other train is the momentum of climate change itself, which intensifies and accelerates as we pump more and more greenhouse gases into the atmosphere. As the metaphor suggests, the time during which we might avert this train wreck shortens rapidly as these two trains accelerate and converge. Still, the train wreck is a probability, not a certainty.
Here are some of the positives:
The most promising trend has been the discovery that vast amounts of money might be made and millions of jobs created in the fight to avert this coming catastrophe. A section on the new renewable supermajors published in Bloomberg’s New Energy Outlook estimated that $11 trillion in investment will be required in renewables over the next thirty years. Bloomberg estimates, however, that even with that investment temperatures would still rise by 3.3 degrees Celsius by the end of the century. This would be ruinous, but perhaps it is still avoidable. As Steve Pacala noted, development and adoption of clean energy has proceeded far more rapidly than he anticipated little more than a decade ago.
Other developed (and some developing) countries have moved away from fossil fuels far more rapidly than the United States. More than half of Germany’s grid capacity now comes from solar and onshore wind power. Around the world there have been periods where provinces have met electricity needs without any reliance on fossil fuels. As fossil fuel projects become increasingly difficult to finance (and renewable projects easier to finance), and as rechargers expand their reach and increase their speed, and as battery technology improves, and as renewable energy storage becomes easier, and as tidal, deep geothermal, and other renewable projects proliferate, this transition might accelerate and perhaps stop the rise in emissions earlier than even the optimistic forecasts.
Stopping the rise in emissions won’t be enough, of course. Global temperatures respond to the levels of greenhouse gases and not the rate of change. Reducing levels of greenhouse gases without unleashing severe unintended consequences is a tricky business, but there are several benign, even environmentally positive strategies to suck carbon from the air at the scale needed to make a difference. Perhaps the most benign would be restoring wetlands, reducing farm emissions, and, most important, halting deforestation and reforesting degraded lands. A massive study led by Bronson Griscom, a forest expert at Conservation International, and published by the Proceedings of the National Academy of Sciences in 2017 estimated that such “natural climate solutions” could cost-effectively sequester greenhouse gases equivalent to between 11 and 15 billion tons a year, or between a quarter and a third of annual human-sourced emissions.
Then there are the industrial solutions. One of the more intriguing efforts comes from a start-up named Blue Planet, which, through a proprietary process, combines calcium and CO2 to make synthetic limestone that in turn can be used to make concrete. If adopted, this substitution has the potential to pull tens of gigatons of carbon out of the air each year. Norway has greenlighted a similar project to sequester carbon at industrial scale.
There are other scalable, financeable proposals for carbon capture. Between reducing fossil fuels usage, increasing renewables, and recapturing CO2 already in the atmosphere, it is possible that we might bring down the amount of GHGs in the atmosphere. As the global temperature record suggests, all things being equal (important caveat), climate seems to respond quickly to levels of greenhouse gases.
Preindustrial levels of CO2 were 280 parts per million. Global temperatures remained near the long-term average (based on a five-year smoothed average) until the late 1970s, when carbon concentrations reached 340 parts per million, or about 20 percent higher than the preindustrial average. Temperatures probably would have begun rising sooner, but after World War II, a massive increase in sulfate aerosols in the atmosphere, a result of the postwar boom and major volcanic activity, had an offsetting cooling effect that lasted until the 1970s. Since 1980, temperatures (again, on a five-year smoothed average basis) have been rising pretty much in lockstep with greenhouse gas emissions. If temperatures are that responsive to CO2 on the way up, there is hope that they will be equally responsive on the way down—unless, on the way up, we breach the thresholds that trigger out-of-control, self-reinforcing warming.
Collectively, we must all hope such symmetry applies and that thresholds are not crossed, as the consequences of a self-reinforcing warming would exceed the death and misery resulting from a global nuclear war. This is not hyperbole.
Humanity has enjoyed a ten-thousand-year honeymoon under the climate regime that has prevailed since the end of the last ice age. During that period our numbers have expanded from a few million to 7.8 billion. Civilizations have arisen, and we have expanded our cultivation practices over most arable land and into every ecosystem, including the oceans. To use an analogy from finance, humanity has leveraged its position far beyond what is ecologically sustainable based on the assumption that the benign climate that nurtured our dominance would continue.
But climate is changing. As Stefan Rahmstorf noted, we have left the Holocene, that benign hiatus during which we have been fruitful and multiplied. Carbon dioxide levels are now what they were during the Pliocene, roughly four million years ago. This was before the ice ages began. Temperatures back then were 2 to 3 degrees Celsius warmer than they are now. The Greenland Ice Sheet had yet to form and sea levels were about 80 feet higher. There was plenty of life on the planet, and plenty of apes too, but there were no humans. That’s where we’re headed on our present path.
We know where we’re going, we know what the likely consequences are, and we have the tools to temper, if not avert, a coming catastrophe. The existential question: Will we?
The “we,” of course, is humanity, which includes a few hundred million people deeply concerned about global warming, several hundred million people well aware of the dangers ahead, as well as several billion people who are either unaware or only vaguely aware of the threat. Fortunately, those several hundred million people live in developed societies that account for most global emissions and have the technological sophistication to reduce emissions and recapture greenhouse gases already in the atmosphere. Unfortunately, as yet, this group is neither sufficiently alarmed nor sufficiently organized to do what will be necessary. Recall that the Climate Protection Index that ranks nations for their efforts to combat the threat has consistently left the top three spots open because, in the opinion of the groups that contribute to the index, no country has done enough to avoid dramatic warming. And as recent history has shown, the decision by China and India to embrace coal to power their development in the 1990s proved more consequential for climate than the patchwork of many thousands of greenhouse gas reduction initiatives launched by cities, states, provinces, and nations in the developed world during that same period. And thanks to a release of documents by Greenpeace, we discover that as late as October 2021, influential nations such as Japan, Australia, and India were still trying to water down language on the transition away from coal and fossil fuels in submissions to an important IPCC meeting.
What may prove to be the fatal flaw of our modern market economy is that it can’t do collective action. Our tightly coupled global economy fosters the immediate transmission of bad things such as computer viruses, actual viruses, and financial panics. But our responses to any of these outbreaks is typically fragmented and slow.
The most recent crisis—the COVID pandemic—crisply illustrates the limitations of the current economic/political paradigm. Even with immediate life-and-death consequences, our current global order is not configured to respond to a global crisis. The virus somehow jumped to humans in Wuhan, China, and then exploded because Wuhan officials at first refused to acknowledge the outbreak. The United States was slow to react because the Trump administration had ended funding for a pandemic early-warning initiative called PREDICT and two years earlier dismantled a directorate on pandemics in the National Security Council. The Trump administration consistently downplayed and politicized the pandemic, allowing cases and deaths to explode in the United States. Commonsense measures such as mask wearing and social distancing were viewed as assaults on liberty and freedom by significant percentages of the population.
The result of this politicization has been near utter failure in the United States to contain the pandemic relative to other countries with reliable health statistics. The U.S. population, for instance, is a little more than 2.5 times the size of Japan’s but has had roughly ten times as many deaths from the disease and nearly one hundred times as many cases (as of this writing). The United States is six times the population of South Korea but has had (as of this writing) about four hundred times the number of deaths. The United States is thirteen times the size of Australia but has had close to four hundred times the number of deaths. Adjust for demographics and comorbidity factors all you want—there remains an astonishing gap between the performance of the United States, the world’s dominant economy, and dozens of nations that have been somewhat successful in keeping the disease under control. Of course, the United States was not alone in failing to contain the pandemic. Russia, Brazil, Mexico, India, South Africa, France, Spain, the United Kingdom, and a number of other nations have also seen the virus rip through their populations.
Piecemeal does not work with a global problem. Even if a nation has eliminated the virus, it will still suffer economically so long as the virus is rampant elsewhere, disrupting travel, economic activity, and supply chains. The implications of the COVID crisis for the climate crisis are obvious. Only collective action can resolve either one. If the global community cannot come together to deal with a disease that is killing and debilitating people on a scale not seen in the developed world in a hundred years, how can it come together to deal with an atmospheric threat that for most of the world’s population is either unknown or who believe that the danger lies off in the future?
In the United States, the response to COVID suggests that the nation is not ready to grapple with any global problem. Perhaps the only thing that might be less subject to politics than a virus might be physics, but as we have seen, both the virus and climate change have become completely politicized. The rise of partisanship has reversed more than fifty years of progress in terms of American attitudes toward the environment.
This realization has shaken me to the core. It used to be said that environmental awareness has become an American value. Polls have shown consistent support for environmental initiatives.
The rise of intense partisanship may partially explain voter behavior and attitudes toward climate change, but a broader question involves the decline of critical thinking on issues of importance. After the 2020 election, Trump had large swaths of the Republican electorate believing a bizarre conspiracy about Dominion voting machines. The accusation was that Dominion was switching votes, even in states governed by pro-Trump Republicans and even where the voting machines were backed up by paper ballots. He continued to push this conspiracy and his supporters continued to believe it, even after the Republican secretary of state in Georgia finished a recount comparing the paper ballots with the voting machine results and found no meaningful difference.
And then, of course, his backers invaded the Capitol on January 6, 2020, in an attempt to disrupt the counting of the Electoral College votes even as it was proceeding. So, even though Trump’s arguments about a stolen election fell apart upon the slightest scrutiny, defied common sense, and had been rejected in more than sixty court cases, a few of which reached the Supreme Court (which is dominated by conservatives and judges he appointed), thousands of his followers were moved to invade the seat of U.S. democracy, a place whose sanctity had been violated by a mob only once before, more than two hundred years ago. Moreover, this insurrection was supported by about 45 percent of Republicans according to a poll conducted by YouGov after the event.
Susceptibility to conspiracy theories has long been a subject of fascination and research for political and social scientists. As the mainstreaming of truly absurd conspiracy theories such as those espoused by QAnon demonstrates, this susceptibility has only grown in recent years and has now reached a point where it interferes with public policy, legislation, and the democratic process itself. Technological change has enhanced this susceptibility, which means that our elected leaders are going to have to solve the problem of a public passionately clinging to “alternate facts” even as they try to act on climate change. This does not bode well for our future.
One factor that has left people vulnerable to conspiracy theories has been the decline of traditional authorities. Trust in academia, policymakers, and the scientific community has steadily eroded, an alienation exacerbated by income inequality and the growing cultural divide between the educated elite and an increasingly tattered middle class. Trump accelerated this process with his attacks on expertise and his appointments of quacks and hacks to positions that formerly required legitimate credentials. With critiques from traditional authorities drained of their authority, preposterous ideas persist and fester. There’s a deep need in people to attach themselves passionately to ideas and structures larger than themselves. A Trump rally had more the flavor of a religious revival than a political event, and when people went all in on Trump, they also went all in on his articles of faith—one of which was that COVID was fake news. Many would cling to those articles of faith even as it was costing them their lives because the belief that COVID was a hoax had become a key part of the integrated Trumpian worldview, and to abandon that belief would undermine all the other fictions they had bound themselves to.
The rise of the internet and social media has been matched by the decline of intermediaries in all fields, including finance, politics, and, perhaps most of all, the media. The intermediaries in the media were the editors, producers, and fact-checkers who previously provided a tether to a common set of facts and also friction so that unsubstantiated fabrications wouldn’t gain traction before they were vetted.
Now, on the internet, fact-checkers have disappeared, as have most editors, all news sites look equally authoritative on a screen, and people can choose news sources that bolster the isolation of whatever silo they choose to inhabit. Newsmax, a peripheral, far-right news source that became the go-to place for those who think the 2020 election was stolen, went from just over 58,000 prime-time viewers on its obscure cable channel to more than 1.1 million viewers for its most watched shows in the weeks after the election, according to Ben Smith, the media critic for The New York Times. Those ratings are better than all but the very most popular mainstream news shows on cable. Christopher Ruddy, the founder of Newsmax, told Smith, “In this day and age, people want something that tends to affirm their views and opinions.” And for all the thundering about liberal bias in the media, Fox had four of the top five cable news-related shows in the weeks after the election.
How likely is it that climate change will shed thirty years of political spin and disinformation? It’s true that at least some of Rupert Murdoch’s children recognize the seriousness of climate change. Perhaps they will exert pressure on the Fox network to abandon its divisiveness on the issue. As the example of the 2020 election showed, however, when Fox News recognized the reality of the Biden win, a significant portion of their audience vilified the network and sought out outlets such as Newsmax that still reinforced the delusion that the election was stolen. If Fox changes its tune on climate change, there will still be plenty of alternative news sources that reinforce the notion that global warming is some sort of hoax.
Daunting as is the prospect of a collective recognition of the seriousness of the threat, there is an even more formidable impediment to collective action: the very nature of our modern market economy. The late Charles Reich, author of The Greening of America, once remarked to me that the corporate elites don’t run the “system” (the word for the establishment very much in vogue in the late 1960s when Reich made that remark), they “tend” it. That observation was subtle, and brilliant. Over the decades, our consumer society has become optimized toward identifying opportunities for profitable investment as well as hedging, spreading, and shifting the risks entailed. Those who contribute to profits and defanging risks get rewarded; those who don’t eventually find themselves marginalized or shed.
The system is amoral. If a cohort of ethical investors shies from a particular area—porn, cigarettes, coal—earnings ratios fall, offering fat returns for investors who care for profits more than probity. So long as there is consumer interest or a market anywhere and a product can be profitably produced, front-line agents will continue to sell it until they can’t. And so long as there is profit to be made, an industry’s lobbyists, lawyers, and other support systems will try to protect it.
This gives established businesses tremendous inertia. Once a profit engine is identified and infrastructure has emerged to support it, it becomes entrenched in the economy and it takes enormous energy to dislodge it. Recall that the global community took action on CFCs only when there was “smoking gun” proof that they posed a threat to life on earth, several years after the ozone hole was first discovered. Even then, action might not have been taken had not the dominant producer, DuPont, also had the lead in producing alternative refrigerants, which made it in their interest to ban CFCs.
If the CFC business is a molehill in the global economy, the fossil fuels complex is Everest. The momentum of this colossus is infinitely greater than that of the CFC industry. Oil, coal, and natural gas are entrenched throughout the modern economy, with trillions invested in infrastructure, supporting millions of jobs, and protected by a massive network of lobbyists and politicians. Fossil fuel’s power and persistence is evident in the fact that the overwhelming majority of the world’s vehicles still rely on an engine that was invented before the Civil War—the internal combustion engine—to power all manner of vehicles even as we enter the third decade of the new millennium.fn1 Yes, an accelerating transition to clean power and EVs is underway, but we shouldn’t discount the truly massive numbers of workers, investors, bankers, and managers, not to mention local, state, and national politicians, who have a vested interest in continuing the use of fossil fuels.
If the system is amoral, it is also blind. Its genius at organizing itself to exploit profit opportunity wherever it arises is matched only by the ingenuity with which it hedges, spreads, and shifts risk. The ace in the hole is that last point—the shifting of risk. As discussed in earlier chapters, the ingenuity of the insurance industry and the wizardry of Wall Street financial engineers have been very successful at delaying any reckoning for the risks of climate change, which have been surfacing as steadily mounting claims for flood, wind, fire, and drought damages from natural disasters. In the ultra-low interest rate environment that has prevailed for the past dozen years, there will always be investors, looking for higher yields, who will buy a CAT bond paying 8 percent while crossing their fingers that a hurricane won’t hit Miami in the next three years. And if that market dries up due to a surge of catastrophes, there’s the ultimate ace in the hole—the taxpayers of the United States. Once risk has been spread so wide that it ends up with the nation’s taxpayers, it is also effectively camouflaged, and camouflaging risk allows business as usual to continue long after financial prudence would dictate changing course.
The net effect of spreading risk is to allow it to accumulate. To repeat, if a risk is real, it can’t be destroyed through financial wizardry. And if a risk is real, each year it isn’t expressed increases the probability that it will be expressed in much larger terms in the future. For example, wildfires are part of the natural ecology of the West. Suppressing smaller fires, as most states did for decades, allowed massive buildups of fuels and tinder. Then, as climate change raised temperatures, dried out the air and soil, and increased the intensity of Santa Ana winds, much of the West became a tinderbox, and the probabilities of a major conflagration rose to a certainty. So too with the financial risks of climate change. To the degree to which spreading risk to the taxpayers underprices insurance for homes and businesses in fire, flood, and other zones vulnerable to the changes wrought by climate change, the current system allows people to be blind to the risk of global warming and guarantees that these risks will become systemic.
If we actually lived in a true free-market libertarian paradise, it would be horribly ill-equipped to deal with a collective-action problem like climate change, but at least risks would be borne by those who were paid a lot to take those risks. Some would go bust, survivors would raise their prices, and people would adjust. Effectively, this would be the equivalent of a prescribed burn of western brush. That doesn’t happen anymore in the United States.
Consider 2008, when the housing collapse rendered much of our financial system insolvent. Faced with systemic risk, the federal government stepped in with bailouts, effectively protecting shareholders, bondholders, and management from bearing the risks they had been handsomely paid to assume. In a classic act of the barn door closing after the cows have fled, Congress passed the Dodd-Frank Act, restricting some of the more irresponsible risk taking of financial institutions and setting up the Consumer Financial Protection Bureau (CFPB) to give some voice to the millions who didn’t get a bailout—a group that included the homeowners and consumers forced into bankruptcy by the crisis.
Then lobbyists began picking away at Dodd-Frank and Trump gutted enforcement actions by the CFPB, setting the stage for another multitrillion-dollar bailout as COVID caused a panicked deleveraging in the funding markets in March 2020. The overnight funding markets that provide liquidity for much of the banking system dried up, once again threatening systemic risk. The need for financial system bailouts every ten years caused Minneapolis Fed president Neel Kashkari to describe our financial system as “absurd” in a September 2020 speech to the Council of Institutional Investors.
The socialization of risks related to climate change has proceeded differently. The camouflaging of these risks is the result of an accumulation of different backstops implemented over the years in response to a wide variety of threats. Federal subsidies come through the deficit of the National Flood Insurance Program; through the Disaster Relief Fund, which provides assistance for declared emergencies; and through separate programs for various agencies such as the $3 billion appropriated for the USDA to cover crop losses related to natural disasters. Then there are the state and local programs. Apart from the backstop state-sponsored insurance programs in Florida and California, most states have disaster relief programs or other ways of socializing risk.
Regardless of how those programs are structured, the ultimate backstop for those risks is the American taxpayer. California, for instance, is either going to have to relieve the bankrupt giant utility PG&E of some portion of future liability to wildfires, buy the utility, or allow the utility to increase rates. In every single case, climate change liability ultimately lands on customers, taxpayers, or both.
In 2019 in the United States, 52 percent of weather-related losses were insured. State and federal programs closed some of that gap, and they will increasingly bear that burden in the future. Figures from the Peterson Institute show that weather- and climate-related losses since 2010 were 56 percent higher than the previous decade and nearly three times losses in the 1990s. These numbers will continue to grow as climate change worsens, putting an even greater burden on budgets at all levels of government. Socializing climate risks has enabled the United States to kick the can down the road, but each year thus kicked, the can gets bigger. At some point, perhaps soon, it will become too big to kick anymore.
Our current system is amoral, blind, and, not least, it can be gamed. A perfect example came from the response to the COVID crisis. Congress gave $670 billion to the Paycheck Protection Program in the first round of stimulus to provide forgivable loans that would protect jobs for small businesses. Subsequent analysis showed that most of that money went to large businesses, that many of the loans protected only one job, and that significant funds went to billionaire-owned businesses and even private-equity firms. Unable to get funds, tens of thousands of small businesses went under, while the stock market soared. The fundamental problem was that grants didn’t go to the most in need, they went to those companies whose managers and lawyers were adept at filing forms and/or had the connections to speed the applications along.
The problem of a system ripe for gaming is that funds directed at a problem often don’t get to where they’re needed. As the example of CDM funds going to build a coal-fired electric plant in India illustrates, this is not just a U.S. problem. One wonders, for instance, to what degree the push for building coal-fired plants throughout Asia was propelled by off-the-books “incentives” at all levels of these heavily state-controlled economies. The susceptibility of federal programs to succumb to either bureaucratic inertia or perversion of their mission through gaming is perhaps the most credible of all the libertarian critiques of big government.
What we have right now is a blind, amoral system that invites gaming and manipulation by the clever. It is a system that preserves entrenched interests and camouflages risk, reducing the motivation to adapt when problems appear. It is a system whose default is to drive off cliffs. It is not the system you want when confronted by an existential threat that demands extremely rapid adjustments to the sources of energy that power the economy. But it’s the system we have.
“We have a system that is so supremely adaptable that it has lost the ability to adapt to true danger.” That’s a sentence that I wrote in 1980. Now true danger is upon us. The most likely path is that we will drive off the climate cliff.
Through our ingenuity, adaptability, and greed, we have created a trap for ourselves. All too many of us remain oblivious to the danger. The next and final chapter will offer some thoughts on how we might yet escape.