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Business and NGOs

Reaching for a longer spoonThe disaster in the Gulf of Mexico is straining ties between companies and activists

Jun 3rd 2010 | NEW YORK | From The Economist print edition

IT IS not just Barack Obama and Tony Hayward, BP’s boss, who are under fire because of the environmental catastrophe unfolding in the Gulf of Mexico. In the decade or so since BP acknowledged the need to slow climate change and signalled its commitment to investing in cleaner sources of energy with the slogan “Beyond Petroleum”, many environmental activists and NGOs have laid down their placards and helped the firm execute its green strategies. They are now facing intense criticism of that collaboration from their own supporters, who say the oil spill has left BP’s (always contentious) green claims “Beyond Parody” and the company “Beyond the Pale”.

The website of one such NGO, the Nature Conservancy, has been bombarded with complaints from donors horrified by the discovery (although it had never hidden the fact) that over the years it had received around $10m in gifts of cash and land from BP, and had even given the oil giant a seat on its “International Leadership Council”. Another, Conservation International, has accepted over $2m from BP, advised the firm on its oil extraction methods, and from 2000 to 2006 included on its board John Browne, BP’s boss at the time and the moving force behind the firm’s conversion to greenery. The Environmental Defense Fund, another big NGO, had helped BP develop its internal carbon-trading system, and more recently campaigned alongside it for a law to cap America’s emissions of greenhouse gases through the US Climate Action Partnership (USCAP), an alliance of NGOs and big businesses. Other prominent NGO members of USCAP include the Nature Conservancy, the Pew Center on Global Climate Change, the Natural Resources Defense Council and the World Resources Institute.

The scrutiny of these ties to BP is intensifying the perennial debate about how long a spoon NGOs should use when supping with corporate devils. The failure of governments to make progress on a new climate deal in Copenhagen last December had already prompted some debate among activists about whether a more confrontational style of campaigning was needed to stir the world from its torpor.

The renewed debate comes when relations between business and NGOs (environmental and otherwise) are closer than ever before. In 1990, when Environmental Defense announced an agreement to help McDonald’s reduce the environmental impact of its packaging, there was shock and dismay from activists and business alike. Environmental Defense was accused of selling out, while the fast-food retailer, which had previously had a reputation for hostility to green causes, was chided by some of its peers for allowing tree-huggers into the boardroom. “At the time, it was heresy to say that companies and NGOs could work together; now it is dogma, at least for the Fortune 500,” says Gwen Ruta, who oversees Environmental Defense’s corporate partnerships. Its current collaborators include such frequent targets of activists’ ire as Wal-Mart, a giant retailer with no time for unions, and Kohlberg Kravis Roberts (KKR), a private-equity firm often depicted as a financial predator.

The spill seems certain to prompt NGOs to review their ties to business. Lenny Mendonca of McKinsey, one of the authors of a new report, “Shaping the Future: Solving Social Problems through Business Strategy”, sees a “risk of heading into a vicious circle of antagonism.” But he believes that would be a mistake.

The report, published by a group called the Committee Encouraging Corporate Philanthropy, whose members include dozens of corporate bigwigs, argues that various factors will encourage firms to embrace worthy causes more warmly in future: the likelihood of government action on climate change, the growing importance of a firm’s reputation when it comes to recruiting and the emphasis that the governments of booming emerging markets place on good corporate citizenship. All this, the report optimistically argues, could drive a “self-reinforcing state of trustworthy, pro-social corporate behaviour that simultaneously delivers bottom-line results and community benefits.”

Collaboration between business and NGOs, if well designed, can certainly yield significant mutual benefit. This week Environmental Defense and KKR reported that the first two years of their partnership, which aims to cut costs in KKR’s portfolio of companies through energy efficiency and other green measures, had already generated savings of $160m. The same approach has now been adopted by at least one of KKR’s rivals, the Carlyle Group.

The efforts of McDonald’s to address NGOs’ concerns, starting with its partnership with Environmental Defense, have been “as important to the company’s success as the Happy Meal”, says Walter Massey, a director who chairs the firm’s committee on corporate social responsibility. He was particularly delighted by a partnership with Greenpeace to exclude soyabeans grown on deforested land in the Amazon from the company’s supply chain, which “led to the Greenpeace campaign director issuing a statement congratulating McDonald’s for pushing ‘a multimillion-dollar industry towards a more sustainable future’.”

For several years Mr Massey has also been on the board of BP, which he believes benefited from its work with NGOs after a deadly accident at a refinery in Texas in 2002. “The company’s reservoir of goodwill, built up over years of committed corporate stewardship, was of critical aid in helping us to weather the storm,” he said in March. The latest crisis suggests that the reservoir is not bottomless, however.

BP’s travails (see article) illustrate the limits of enthusiastic corporate citizenship. However much BP works with NGOs, it will find it impossible to move beyond petroleum, with all its attendant environmental problems. Likewise, PepsiCo will struggle to live up to the spirit of its pledge to promote healthier living while the bulk of its profits comes from fattening drinks and snacks.

Partnerships that address NGOs’ misgivings about a firm’s supply chain are likely to prove much more successful. That has certainly been the case at Wal-Mart, which has demanded higher environmental standards from its suppliers, to widespread acclaim. Efforts by firms such as Coca-Cola to work with NGOs to conserve water and increase access to it in the developing world have promise since they should make it easier for the firm to secure a reliable supply of the main ingredient of its drinks.

The spill also highlights the question of whether NGOs should accept money for the advice they give to companies. For organisations such as the Nature Conservancy, which protects ecologically sensitive spots by buying them or persuading others to set them aside, businesses are a big source of income. But partnerships with grubby firms risk turning off its million-odd individual donors.

Campaigning NGOs, which rely on a reputation for righteousness, are particularly at risk. The website of Greenpeace, whose activists like to chain themselves to things, is full of reminders that it never accepts money from companies. Similarly, there has been relatively little criticism of Environmental Defense because, from its first dealings with McDonald’s, it has never accepted any corporate dollars. Ironically, this policy had prompted grumbles from some big individual donors, who asked why firms as rich as Wal-Mart and KKR should be the ultimate recipients of their charity.

The spill has presumably squelched such talk. Firms on the lookout for ways to improve their image and NGOs hoping to bring about meaningful change seem like natural partners. Most of the time the benefits of co-operation outweigh the risks. But whenever money changes hands, suspicions are bound to arise. The NGOs which accepted BP’s largesse presumably now wish that they had brought a longer spoon to the feast.

By ADC | Published: APRIL 16, 2010

 

Calera's CO2 capture systems would treat flue gas from power plants to create a cement.

As the largest source of CO2 emissions in the United States, scientists have long sought a process to clean up the coal-fired power industry. Unfortunately the solutions to capture and sequester carbon have yet to be economically feasible without the government placing a hefty price on carbon emissions. The new Silicon Valley start-up, Calera, claims to have developed a process that sequesters carbon dioxide emissions from flue gas (the gaseous product of coal or natural gas combustion in a power plant) in a cement product, as reported in a recentNYTimes article. Considering that in 2007 we produced 91 million tons of Portland cement and 4 million tons of masonry cement with a value of $9.7 billion, cement from a CO2 capture plant would be entering a large and profitable market. In addition, the US cement industry is one of the largest contributors to industrial process-related GHG emissions. Thus, capturing CO2 from power plants in a cement product could mitigate emissions from both the coal combustion and conventional cement production.

Generally when people talk about carbon capture and sequestration, they’re referring to the chemical absorption of CO2 in a liquid (usually ammonia based) solution. This solution is then passed through a stripper (funny name, I know!) where the liquid is heated to release the captured CO2. Finally, the CO2 is compressed and injected into geological formations underground. The exact details of the Calera process are unknown, but we do know that the process involves combining the flue gas (containing CO2) with sea water (containing calcium, magnesium, and oxygen). The process produces calcium carbonate and magnesium carbonate which are then used to make cement and aggregate. To make the resulting carbon capture cement compatible with Portland cement, Calera makes a 20% CO2 cement and 80% Portland cement blend.

A test plant in California has been found to capture 86% of CO2 in the flue gas (though it is unclear how much of the flue gas the Calera plant treats). Though Calera has had success in their pilot plant, questions remain as to the scalability of the process. Critics of the technology are concerned with an acid byproduct from the reaction that must be neutralized and disposed of. I also have questions about the water requirements of the process. To produce cement the Calera process must have a plentiful source of sea water or brine, so how will they implement their idea at inland and water starved power plants? And what are the energy requirements of the Calera process? One of the main downsides of ammonia based CO2 capture systems is that they require about 30% of the energy produced by the power plant to treat the plant’s flue gas. This means that to continue to produce the same amount of energy, the plant will have to increase its capacity (and emissions) by 30%. To be a winner in the CO2 capture race, Calera should also perform well on the energy front. I suppose we’ll have an answer to these questions soon, Calera has announced it will open its first commercial plant next year.

Bottom line: Calera’s CO2 capture technology has given us hope that CO2 capture can be economical, and produce useful byproducts, but they still have to prove that it’s actually viable at a large scale.

SOLUTIONSBuilding a Green Economy
to Avoid Climate Catastrophe:
We Can Do Thisby Paul Krugman
Nobel Prize in Economic Science 2008

 

Climate Science & Climate Economics 
If you listen to climate scientists — and despite the relentless campaign to discredit their work, you should — it is long past time to do something about emissions of carbon dioxide and other greenhouse gases. If we continue with business as usual, they say, we are facing a rise in global temperatures that will be little short of apocalyptic. And to avoid that apocalypse, we have to wean our economy from the use of fossil fuels, coal above all. But is it possible to make drastic cuts in greenhouse-gas emissions without destroying our economy?

Like the debate over climate change itself, the debate over climate economics looks very different from the inside than it often does in popular media. The casual reader might have the impression that there are real doubts about whether emissions can be reduced without inflicting severe damage on the economy. In fact, once you filter out the noise generated by special-interest groups, you discover that there is widespread agreement among environmental economists that a market-based program to deal with the threat of climate change — one that limits carbon emissions by putting a price on them — can achieve large results at modest, though not trivial, cost. There is, however, much less agreement on how fast we should move, whether major conservation efforts should start almost immediately or be gradually increased over the course of many decades.

Environmental Econ 101
If there’s a single central insight in economics, it’s this: There are mutual gains from transactions between consenting adults. Free markets are “efficient” — which, in economics-speak as opposed to plain English, means that nobody can be made better off without making someone else worse off. Now, efficiency isn’t everything. In particular, there is no reason to assume that free markets will deliver an outcome that we consider fair or just. So the case for market efficiency says nothing about whether we should have, say, some form of guaranteed health insurance, aid to the poor and so forth. But the logic of basic economics says that we should try to achieve social goals through “aftermarket” interventions. That is, we should let markets do their job, making efficient use of the nation’s resources, then utilize taxes and transfers to help those whom the market passes by.

But what if a deal between consenting adults imposes costs on people who are not part of the exchange? What if you manufacture a widget and I buy it, to our mutual benefit, but the process of producing that widget involves dumping toxic sludge into other people’s drinking water? When there are “negative externalities” — costs that economic actors impose on others without paying a price for their actions — any presumption that the market economy, left to its own devices, will do the right thing goes out the window. So what should we do?Environmental economics is all about answering that question. 

One way to deal with negative externalities is to make rules that prohibit or at least limit behaviour that imposes especially high costs on others. That’s what we did in the first major wave of environmental legislation in the early 1970s: cars were required to meet emission standards for the chemicals that cause smog, factories were required to limit the volume of effluent they dumped into waterways and so on. And this approach yielded results; America’s air and water became a lot cleaner in the decades that followed.

But while the direct regulation of activities that cause pollution makes sense in some cases, it is seriously defective in others, because it does not offer any scope for flexibility and creativity. Consider the biggest environmental issue of the 1980s — acid rain. Emissions of sulphur dioxide from power plants, it turned out, tend to combine with water downwind and produce flora- and wildlife-destroying sulphuric acid. In 1977, the government made its first stab at confronting the issue, recommending that all new coal-fired plants have scrubbers to remove sulphur dioxide from their emissions. Imposing a tough standard on all plants was problematic, because retrofitting some older plants would have been extremely expensive. By regulating only new plants, however, the government passed up the opportunity to achieve fairly cheap pollution control at plants that were, in fact, easy to retrofit. 





A. C. Pigou was an early-20th-century British don, whose 1920 book, “The Economics of Welfare,” is generally regarded as the ur-text of environmental economics. He enunciated a principle: economic activities that impose unrequited costs on other people should not always be banned, but they should be discouraged. And the right way to curb an activity, in most cases, is to put a price on it. Pigou proposed that people who generate negative externalities should have to pay a fee reflecting the costs they impose on others — what has come to be known as a Pigovian tax. The simplest version of a Pigovian tax is an effluent fee: anyone who dumps pollutants into a river, or emits them into the air, must pay a sum proportional to the amount dumped. With the rise of environmental regulation, economists dusted off Pigou and began pressing for a “market-based” approach that gives the private sector an incentive, via prices, to limit pollution, as opposed to a “command and control” fix that issues specific instructions in the form of regulations. What has caught on is a variant that most economists consider more or less equivalent: a system of tradable emissions permits, a k a cap and trade.

In this model, a limited number of licenses to emit a specified pollutant, like sulphur dioxide, are issued. A business that wants to create more pollution than it is licensed for can go out and buy additional licenses from other parties; a firm that has more licenses than it intends to use can sell its surplus. This gives everyone an incentive to reduce pollution, because buyers would not have to acquire as many licenses if they can cut back on their emissions, and sellers can unload more licenses if they do the same. In fact, economically, a cap-and-trade system produces the same incentives to reduce pollution as a Pigovian tax, with the price of licenses effectively serving as a tax on pollution.

Politically speaking, doling out licenses to industry isn’t entirely bad, because it offers a way to partly compensate some of the groups whose interests would suffer if a serious climate-change policy were adopted. This can make passing legislation more feasible. These political considerations probably explain why the solution to the acid-rain predicament took the form of cap and trade and why licenses to pollute were distributed free to power companies. In the US, the Waxman-Markey bill, a cap-and-trade setup for greenhouse gases, starts by giving out many licenses to industry but puts up a growing number for auction in later years, and was actually passed by the House of Representatives last year; it’s hard to imagine a broad-based emissions tax doing the same for many years. Some senators have recently floated a proposal for a hybrid solution, with cap and trade for some parts of the economy and carbon taxes for others — mainly oil and gas. The political logic seems to be that the oil industry thinks consumers won’t blame it for higher gas prices if those prices reflect an explicit tax.

In any case, experience suggests that market-based emission controls work. Our recent history with acid rain shows as much. The US Clean Air Act of 1990 introduced a cap-and-trade system in which power plants could buy and sell the right to emit sulphur dioxide, leaving it up to individual companies to manage their own business within the new limits. Sure enough, over time sulphur-dioxide emissions from power plants were cut almost in half, at a much lower cost than even optimists expected; electricity prices fell instead of rising. Acid rain did not disappear as a problem, but it was significantly mitigated. The results, it would seem, demonstrated that we can deal with environmental problems when we have to.

The emission of carbon dioxide and other greenhouse gases is a classic negative externality — the “biggest market failure the world has ever seen,” in the words of Nicholas Stern, author of a report on the subject for the British government. Textbook economics and real-world experience tell us that we should have policies to discourage activities that generate negative externalities and that it is generally best to rely on a market-based approach. 

Climate of Doubt?
This is an article on climate economics, not climate science. But before we get to economics, it’s worth establishing three things about the state of the scientific debate. The first is that the planet is indeed warming. Weather fluctuates, and as a consequence it’s easy enough to point to an unusually warm year in the recent past, note that it’s cooler now and claim, “See, the planet is getting cooler, not warmer!” But if you look at the evidence the right way — taking averages over periods long enough to smooth out the fluctuations — the upward trend is unmistakable: each successive decade since the 1970s has been warmer than the one before. 

Second, climate models predicted this well in advance, even getting the magnitude of the temperature rise roughly right. While it’s relatively easy to cook up an analysis that matches known data, it is much harder to create a model that accurately forecasts the future. So the fact that climate modellers more than 20 years ago successfully predicted the subsequent global warming gives them enormous credibility. 

Supposed recent climate science scandals evaporate on closer examination, revealing only that climate researchers are human beings, too. Yes, scientists try to make their results stand out, but no data were suppressed. Yes, scientists dislike it when work that they think deliberately obfuscates the issues gets published. What else is new? Nothing suggests that there should not continue to be strong support for climate research.

And this brings me to my third point: models based on this research indicate that if we continue adding greenhouse gases to the atmosphere as we have, we will eventually face drastic changes in the climate. Let’s be clear. We’re not talking about a few more hot days in the summer and a bit less snow in the winter; we’re talking about massively disruptive events, like the transformation of the Southwestern United States into a permanent dust bowl over the next few decades. 

Now, despite the high credibility of climate modellers, there is still tremendous uncertainty in their long-term forecasts. But as we will see shortly, uncertainty makes the case for action stronger, not weaker. So climate change demands action…My initial reaction, which I suspect most economists would share, is that the very scale and complexity of the situation requires a market-based solution, whether cap and trade or an emissions tax. After all, greenhouse gases are a direct or indirect by-product of almost everything produced in a modern economy, from the houses we live in to the cars we drive. Reducing emissions of those gases will require getting people to change their behaviour in many different ways, some of them impossible to identify until we have a much better grasp of green technology. So can we really make meaningful progress by telling people specifically what will or will not be permitted? Econ 101 tells us that the only way to get people to change their behaviour appropriately is to put a price on emissions so this cost in turn gets incorporated into everything else in a way that reflects ultimate environmental impacts. 

When shoppers go to the grocery store, for example, they will find that fruits and vegetables from farther away have higher prices than local produce, reflecting in part the cost of emission licenses or taxes paid to ship that produce. When businesses decide how much to spend on insulation, they will take into account the costs of heating and air-conditioning that include the price of emissions licenses or taxes for electricity generation. When electric utilities have to choose among energy sources, they will have to take into account the higher license fees or taxes associated with fossil-fuel consumption. And so on down the line. A market-based system would create decentralized incentives to do the right thing, and that’s the only way it can be done. That said, some specific rules may be required. James Hansen, the renowned climate scientist who deserves much of the credit for making global warming an issue in the first place, has argued forcefully that most of the climate-change problem comes down to just one thing, burning coal, and that whatever else we do, we have to shut down coal burning over the next couple of decades. My economist’s reaction is that a stiff license fee would strongly discourage coal use anyway. But a market-based system might turn out to have loopholes — and their consequences could be dire. So I would advocate supplementing market-based disincentives with direct controls on coal burning.

The bottom line, is that while climate change may be a vastly bigger problem than acid rain, the logic of how to respond to it is much the same. What we need are market incentives for reducing greenhouse-gas emissions — along with some direct controls over coal use — and cap and trade is a reasonable way to create those incentives. 

The Cost of Action
Just as there is a rough consensus among climate modellers about the likely trajectory of temperatures if we do not act to cut the emissions of greenhouse gases, there is a rough consensus among economic modellers about the costs of action. That general opinion may be summed up as follows: Restricting emissions would slow economic growth — but not by much. The US Congressional Budget Office, relying on a survey of models, has concluded that the Waxman-Markey Bill “would reduce the projected average annual rate of growth of gross domestic product between 2010 and 2050 by 0.03 to 0.09 percentage points.” That is, it would trim average annual growth to 2.31% at worst, from 2.4%. Over all, the Budget Office concludes, strong climate-change policy would leave the American economy between 1.1% and 3.4% smaller in 2050 than it would be otherwise. One recent review of the available estimates put the costs of a very strong climate policy — substantially more aggressive than contemplated in current legislative proposals — at between 1 and 3% of gross world product.

While it’s unlikely that the models get everything right, it’s a good bet that they overstate rather than understate the economic costs of climate-change action. That is what the experience from the cap-and-trade program for acid rain suggests: costs came in well below initial predictions. And in general, what the models do not and cannot take into account is creativity; surely, faced with an economy in which there are big monetary payoffs for reducing greenhouse-gas emissions, the private sector will come up with ways to limit emissions that are not yet in any model.

What you hear from American conservative opponents of a climate-change policy, however, is that any attempt to limit emissions would be economically devastating…this extreme pessimism about the economy’s ability to live with cap and trade  is very much at odds with typical conservative rhetoric. After all, modern conservatives express a deep, almost mystical confidence in the effectiveness of market incentives. They believe that the capitalist system can deal with all kinds of limitations, that technology, say, can easily overcome any constraints on growth posed by limited reserves of oil or other natural resources. And yet now they submit that this same private sector is utterly incapable of coping with a limit on overall emissions, even though such a cap would, from the private sector’s point of view, operate very much like a limited supply of a resource, like land. Why don’t they believe that the dynamism of capitalism will spur it to find ways to make do in a world of reduced carbon emissions? Why do they think the marketplace loses its magic as soon as market incentives are invoked in favour of conservation?

Clearly, conservatives abandon all faith in the ability of markets to cope with climate-change policy because they don’t want government intervention. Their stated pessimism about the cost of climate policy is essentially a political ploy rather than a reasoned economic judgment. The giveaway is the strong tendency of conservative opponents of cap and trade to argue in bad faith. The truth is that there is no credible research suggesting that taking strong action on climate change is beyond the economy’s capacity. Even if you do not fully trust the models history and logic both suggest that the models are overestimating, not underestimating, the costs of climate action. We can afford to do something about climate change.

The massive extent of eastern China air pollution visible from space: 
Beijing has completely disappeared under the haze (courtesy NASA).  

The China Syndrome
The United States is still the world’s largest economy, which makes the country one of the world’s largest sources of greenhouse gases. But it’s not the largest. China, which burns much more coal per dollar of gross domestic product than the United States does, overtook us by that measure around three years ago. Over all, the advanced countries — the rich man’s club comprising Europe, North America and Japan — account for only about half of greenhouse emissions, and that’s a fraction that will fall over time. In short, there can’t be a solution to climate change unless the rest of the world, emerging economies in particular, participates in a major way.

Inevitably those who resist tackling climate change point to the global nature of emissions as a reason not to act. Emissions limits in America won’t accomplish much, they argue, if China and others don’t match our effort. And they highlight China’s obduracy in the Copenhagen negotiations as evidence that other countries will not cooperate. Indeed, emerging economies feel that they have a right to emit freely without worrying about the consequences — that’s what today’s rich countries got to do for two centuries. It’s just not possible to get global cooperation on climate change, goes the argument, and that means there is no point in taking any action at all.

For those who think that taking action is essential, the right question is how to persuade China and other emerging nations to participate in emissions limits. Carrots, or positive inducements, are one answer. Imagine setting up cap-and-trade systems in China and the United States — but allow international trading in permits, so Chinese and American companies can trade emission rights. By setting overall caps at levels designed to ensure that China sells us a substantial number of permits, we would in effect be paying China to cut its emissions. Since the evidence suggests that the cost of cutting emissions would be lower in China than in the United States, this could be a good deal for everyone. 

But what if the Chinese, Indians or Brazilians do not want to participate in such a system? Then you need sticks as well as carrots. In particular, you need carbon tariffs. A carbon tariff would be a tax levied on imported goods proportional to the carbon emitted in the manufacture of those goods. Suppose that China refuses to reduce emissions, while the United States adopts policies that set a price of $100 per ton of carbon emissions. If the United States were to impose such a carbon tariff, any shipment to America of Chinese goods whose production involved emitting a ton of carbon would result in a $100 tax over and above any other duties. Such tariffs, if levied by major players — probably the United States and the European Union — would give non-cooperating countries a strong incentive to reconsider their positions. 

To the objection that such a policy would be protectionist, a violation of the principles of free trade, one reply is, So? Keeping world markets open is important, but avoiding planetary catastrophe is a lot more important. In any case, however, you can argue that carbon tariffs are well within the rules of normal trade relations. As long as the tariff imposed on the carbon content of imports is comparable to the cost of domestic carbon licenses, the effect is to charge your own consumers a price that reflects the carbon emitted in what they buy, no matter where it is produced. That should be legal under international-trading rules. In fact, even the World Trade Organization, which is charged with policing trade policies, has published a study suggesting that carbon tariffs would pass muster.

Needless to say, the actual business of getting cooperative, worldwide action on climate change would be much more complicated and tendentious than this discussion suggests. Yet the problem is not as intractable as you often hear. If the United States and Europe decide to move on climate policy, they almost certainly would be able to cajole and chivvy the rest of the world into joining the effort. We can do this. 

The Costs of Inaction
Climate modellers themselves have grown increasingly pessimistic. What were previously worst-case scenarios have become base-line projections, with a number of organizations doubling their predictions for temperature rise over the course of the 21st century. Underlying this new pessimism is increased concern about feedback effects — for example, the release of methane, a significant greenhouse gas, from seabeds and tundra as the planet warms. 
At this point, the projections of climate change, assuming we continue business as usual, cluster around an estimate that average temperatures will be about 9 degrees Fahrenheit higher in 2100 than they were in 2000. That’s a lot — equivalent to the difference in average temperatures between New York and central Mississippi. Such a huge change would have to be highly disruptive. And the troubles would not stop there: temperatures would continue to rise. 
Furthermore, changes in average temperature will by no means be the whole story. Precipitation patterns will change, with some regions getting much wetter and others much drier. Many modellers also predict more intense storms. Sea levels would rise, with the impact intensified by those storms: coastal flooding, already a major source of natural disasters, would become much more frequent and severe. And there might be drastic changes in the climate of some regions as ocean currents shift. It’s always worth bearing in mind that London is at the same latitude as Labrador; without the Gulf Stream, Western Europe would be barely habitable.

There are at least two reasons to take sanguine assessments of the consequences of climate change with a grain of salt. One is that, as I have just pointed out, it’s not just a matter of having warmer weather — many of the costs of climate change are likely to result from droughts, flooding and severe storms. The other is that while modern economies may be highly adaptable, the same may not be true of ecosystems. The last time the Earth experienced warming at anything like the pace we now expect was during the Paleocene-Eocene Thermal Maximum, about 55 million years ago, when temperatures rose by about 11 degrees Fahrenheit over the course of around 20,000 years (which is a much slower rate than the current pace of warming). That increase was associated with mass extinctions, which, to put it mildly, would not be good for living standards.

Most important is the matter of uncertainty. We’re uncertain about the magnitude of climate change, which is inevitable, because we’re talking about reaching levels of carbon dioxide in the atmosphere not seen in millions of years. The recent doubling of many modellers’ predictions for 2100 is itself an illustration of the scope of that uncertainty; who knows what revisions may occur in the years ahead. Beyond that, nobody really knows how much damage would result from temperature rises of the kind now considered likely.

You might think that this uncertainty weakens the case for action, but it actually strengthens it. As Harvard’s Martin Weitzman has argued in several influential papers, if there is a significant chance of utter catastrophe, that chance — rather than what is most likely to happen — should dominate cost-benefit calculations. And utter catastrophe does look like a realistic possibility, even if it is not the most likely outcome.
 
Weitzman argues — and I agree — that this risk of catastrophe, rather than the details of cost-benefit calculations, makes the most powerful case for strong climate policy. Current projections of global warming in the absence of action are just too close to the kinds of numbers associated with doomsday scenarios. It would be irresponsible — it’s tempting to say criminally irresponsible — not to step back from what could all too easily turn out to be the edge of a cliff… All we need now is the political will.

The  widely admired progressive economist Paul Krugman won the 2008 Nobel Memorial Prize in Economic Science. The above is an edited synopsis of his longer original in The New York Times magazine, (April 2010), which can be consulted for an more extensive discussion of certain economic & political factors in the US.

MONDAY, FEBRUARY 15, 2010CORRUPTION IN WASHINGTON IS SMOTHERING OUR FUTUREBy Johann Hari

For over a century, the U.S. has slowly put some limits - too few, too feeble - on how much corporations can bribe, bully or intimidate politicians. Now, they have beeb burned up away in one whoosh. The Supreme Court has ruled that corporations can suddenly run political adverts during an election campaign - and there is absolutely no limit on how many, or how much they can spend. So if you anger Goldman Sachs by supporting legislation to break up the too-big-to-fail banks, you will smack into a wall of 24/7 ads exposing your every flaw. If you displease Exxon-Mobil by supporting legislation to deal with global warming, you will now be hit by a tsunami of advertising saying you are opposed to jobs and The American Way. If you rile the defence contractors by opposing the gargantuan war budget, you will face a smear-campaign calling you Soft on Terror.

Representative Alan Grayson says: "It basically institutionalizes and legalizes bribery on the largest scale imaginable. Corporations will now be able to reward the politicians that play ball with them - and beat to death the politicians that don't... You won't even hear any more about the Senator from Kansas. It'll be the Senator from General Electric or the Senator from Microsoft." In 2008, Exxon Mobil made profits of $85bn. So if they dedicated just 10 percent to backing a President who would serve their interests, they would have $8.5bn to spend - more than every candidate for President and every candidate for Senate spent at the last election. And that's just one corporation.

To understand the impact this will have, you need to grasp how smaller sums of corporate money have already hijacked American democracy. Let's look at a case that is simple and immediate and every American can see in front of them: healthcare. The United States is the only major industrialized democracy that doesn't guarantee healthcare for all its citizens. The result is that, according to a detailed study by Harvard University, some 45,000 Americans die needlessly every year. That's equivalent to 15 9/11s every year, or two Haitian earthquakes every decade.

This isn't because the American people like it this way. Gallup has found in polls for a decade now that two-thirds believe the government should guarantee care for every American: they are as good and decent and concerned for each other as any European. No: it is because private insurance companies make a fortune today out of a system that doesn't cover the profit-less poor, and can turn away the sickest people as "uninsurable". So they pay for politicians to keep the system broken. They fund the election campaigns of politicians on both sides of the aisle, and in return, those politicians veto any system that doesn't serve their paymasters. Look for example at Joe Lieberman, the former Democratic candidate for Vice-President. He has taken $448,066 in campaign contributions from private healthcare companies while his wife has raked in $2m as one of their chief lobbyists, and he has loyally blocked any attempt in the Senate to break the stranglehold of the health insurance companies and broaden coverage.

The US political system now operates within a corporate cage. If you want to run for office, you have to take corporate cash - and so you have to serve corporate interests. Corporations are often blatant in their corruption: it's not unusual for them to give to both competing candidates in a Senate race, to ensure all sides are indebted to them. This runs so deep that Congressman James Clyburn says the US has become a "corpocracy." It has reached the point that lobbyists now often write the country's laws. Not metaphorically; literally. The former Republican congressman Walter Jones spoke out in disgust in 2006 when he found that drug company lobbyists were actually authoring the words of the Medicare prescription bill, and puppet-politicians were simply nodding it through.

But what happens if politicians are serving the short-term profit-hunger of corporations, and not the public interest? You only have to look at the shuttered shops outside your window for the answer. The banks were rapidly deregulated from the Eighties through the Noughties because their lobbyists paid politicians on all sides, and demanded their payback in rolled-back rules and tossed-away laws. As Senator Dick Durbin says simply: "The banks own the Senate," so they had to obey. The result was that the banks made staggering profits - and were immediately rescued when they smashed the world economy. The only people who paid for it were the public, all over the world.

It is this corruption that has prevented Barack Obama from achieving anything substantial in his first year in office. How do you reregulate the banks, if the Senate is owned by Wall Street? How do you launch a rapid transition away from oil and coal to wind and solar, if the fossil fuel industry owns Congress? How do you break with a grab-the-oil foreign policy if Big Oil provides the invitation that gets you into the party of American politics?

His attempt at healthcare reform is dying because he thought he could only get through the Senate a system that the giant healthcare corporations and drug companies pre-approved. So he promised to keep the ban on bringing cheap drugs down from Canada, he pledged not to bargain over prices, and he dumped the idea of having a public option that would make sure ordinary Americans could actually afford it. The result was a Quasimodo healthcare proposal so feeble and misshapen that even the people of Massachusetts turned away in disgust.

Yet the corporations that caused this crisis are now being given yet more power. Bizarrely, the Supreme Court has decided that corporations are "persons", so they have the "right" to speak during elections. But corporations are not people. Should they have the right to bear arms, or to vote? It would make as much sense. They are a legal fiction, invented by the state - and they can be fairly regulated to stop them devouring their creator. This is the same Supreme Court that ruled that the detainees at Guantanomo Bay are not "persons" under the constitution and are deserving of basic protections. A court that says a living breathing human is less of a "person" than Lockheed Martin has gone badly awry.

Obama now faces two paths - the Clinton road, or the FDR highway. After he lost his healthcare battle, Clinton decided to simply serve the corporate interests totally. He is the one who carried out the biggest roll-back of banking laws, and saw the largest explosion of inequality since the 1920s. Some of Obama's advisors are now nudging him down that path: the pledge for an appalling anti-Keynesian spending freeze on social programmes for the next three years to pay down the deficit is one of their triumphs.

But there is another way. Franklin Roosevelt began his Presidency trying to appease corporate interests - but he faced huge uproar and disgust at home when it became clear this left ordinary Americans stranded in the fog of a depression. He switched course. He turned his anger on "the malefactors of great wealth" and bragged: "I welcome the hatred... of the economic royalists." He launched a programme of redistributing power from the corporations back towards the people, and put in place tough regulations that prevented economic disaster and spiralling inequality for three generations.

There were rare flashes of what Franklin Delano Obama would look like in his reaction to the Supreme Court decision. He said: "It is a major victory for big oil, Wall Street banks, health insurance companies, and other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americas." But he has spent far more time coddling those interests than taking them on. The great pressure of strikes and protests put on FDR hasn't yet arisen from a public dissipated into hopelessness by an appalling media that convinces them they are powerless and should wait passively for a Messiah.

Very little positive change can happen in the U.S. until they clear out the temple of American democracy. In the State of the Union, Obama spent one minute on this problem, and proposed restrictions on lobbyists - but that's only the tiniest of baby steps. He evaded the bigger issue. If Americans want a democratic system, they have to pay for it - and that means fair state funding for political candidates. Candidates are essential for the system to work: you may as well begrudge paying for the polling booths, or the lever you pull. At the same time, the Supreme Court needs to be confronted: when the Court tried to stymie the New Deal, FDR tried to pack it with justices on the side of the people. Obama needs to be pressured by Americans to be as radical in democratizing the Land of the Fee.

None of the crises facing us all - from the global banking system to global warming - can be dealt with if a tiny number of super-rich corporations have a veto over every inch of progress. If Obama flunks this challenge now, he may as well put the US government on eBay and sell it to the highest bidder. How would we spot the difference?

To join the campaign to democratize the United States of America, clickhere.
Johann Hari is a writer for the Independent.POSTED BY ECOLOGICAL BUDDHISM AT 4:11 PMOlder PostHomeBUDDHIST DECLARATION ON CLIMATE CHANGESign the Buddhist DeclarationJanuary 2010Count of signatories -
7000 from over 100 countries(incl. 70 Buddhist teachers
of all traditions). The documentand signatories were presented
to world leaders at the COP-15
conference by the U.N.
Environment Programme.Given the Copenhagen outcome,
the Declaration remains open
for signing.
THE VIEW

The time has surely come when we must speak out as Buddhists,with firm views of harmony as the Tao.
I suggest that it is also time for us to take ourselves in hand…This would be engaged Buddhism where the Sangha is not merely parallel to the forms of conventional society and not merely metaphysical in its universality…This greater Sangha is, moreover, not merely Buddhist. It is possible to identify an eclectic religious revolution that is already underway, one towhich we can lend our energies.
—Robert Aitken Roshi

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