THE FRAGILE CITY AND THE RISK NEXUS

 

 

fragile city & risk nexus

 

 

 

 

 

 

 

 

 

 

 

This is a new short book I have written with leading urbanist Charles Landry. It brings together for the first time two disconnected narratives. The first is about the future of the cities in which half the planet’s population now lives. The second is about the interaction of climate change with food, energy and water security – the risk nexus.

The success of cities – they are now responsible for 80% of the world’s economic growth – flows from their creativity in managing a torrent of material and social change. Urban politicians mobilise business, public authorities and civil society to deliver collective solutions to shared problems. This allows them to channel the turbulent stresses of city life in more sustainable directions.

Climate change threatens the fragile stability that city politicians must maintain. It does so directly by imposing huge additional costs on the physical infrastructure essential to urban life. But it also does so indirectly by undermining the food and water security without which cities quickly become dysfunctional.

Cities everywhere have not waited for governments to act. They are nimbler, more able to deliver the innovative and integrated responses required to deal with the risk nexus. But however enterprising and creative they are their own efforts will be overwhelmed if climate policy fails.

But governments are hobbled in their efforts to meet this challenge by their lack of legitimate authority. Some have the authority to act but without the legitimacy to command the support of their population. Others have legitimacy but cannot assemble enough authority to act decisively.

In both cases city politicians, closer as they are to the base of society, are better placed to respond to climate change. But they are isolated from each other. In our short book we argue that cities, if they are to continue to succeed, must combine together to negotiate a more explicit and binding political contract with their national capitals on how to manage the risks and opportunities of maintaining climate security.

 

Tom Burke

 

The book can be bought online for £9.95 here

fragile city & risk nexus

 

 

 

 

 

 

 

 

 

Posted in Business, Changing the Politics, Cities, Climate Change, Comedia, Corporate Governance, Domestic, Economics, Energy, Energy Efficiency, Energy Security, Environment, European, International, People, Politics, renewables, Sustainability | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

NO-ONE HOME

 

This piece first appeared in BusinessGreen

 

city-lights

 

There is no-one at home in Britain’s political parties. Increasingly they are empty shells with ever fewer members. On a good day less than 400,000 people belong to all our political parties combined. That is about 0.5% per cent of the population. This is a precipitous decline from the four million who belonged to Britain’s political parties in the fifties.

All 650 MPs are drawn from this rather shallow talent pool. Assuming, rather generously, that half those members are active, Britain’s political talent pool is about the size of Bournemouth. So something more than simply nostalgia for a mythical golden age may explain why our current crop of political leaders are so lacking.

By comparison, the membership of the RSPB is about 1.2 million and that of the National Trust perhaps 4 million. Membership of a political party makes you part of a marginal fringe of society. Belonging to an environmental body puts you deep in the mainstream of British public life.

This hollowing out of political parties has significant consequences. Fewer members means less income. That leads to ever more intimate relations with business and union leaders to pay for the party, especially at election time. This inexorably distorts agendas and priorities.

It also means the parties can no longer communicate directly with voters. Instead they must rely on the media to build the electoral coalitions necessary to achieve office. This makes them hugely dependent on the prejudices of editors whose primary interest is retaining the loyalty of their paying customers.

Political discourse thus becomes over focussed on the near term, emotionally potent, social issues whilst paying less attention to analysing the difficult, strategic issues that make up the national interest. In recent decades politics has boiled down to choosing which celebrity politician you prefer to micro-manage marginal improvements in public services which are actually quite good.

Of course, these realities are camouflaged by a hurricane of heroic spin whose primary purpose is to keep voters confused and distracted. The result is an ill-informed electorate, ill-prepared to deal with the multiplying stresses generated by a changing world. The empty political parties of both the right and left have been unwilling to seek electoral mandates to deal properly with an avalanche of looming threats to prosperity and security of which climate change is the most serious.

Parties of the right are pre-occupied with their drive to reduce taxes, regulations and spending by government. Their core purpose is an ever expanding realm of personal individual choice. They believe markets are always wiser than governments. As Mr Cameron has painfully discovered, it is difficult for politicians from the right to accept the level of government activism required to tackle a changing climate.

Left wing parties seek to maximise economic growth as fast as possible to create the wealth to improve public services and alleviate poverty. Anything thought to put economic growth at risk is anathema. They are not so viscerally opposed to government interventions as those from the right but they are timid, preferring marginal change to the transformations needed.

As far as national politics is concerned choice boils down to a leader who has gone form hugging a husky to throwing out the ‘green crap’ or one who after four years has yet to make a significant speech on the environment. Some choice!

But if national politics is failing the environment, the same cannot be said for local politics. After the Earth Summit in 1992 local authorities picked up Agenda 21 with far more enthusiasm – and impact – than national government. All over the country local authorities got stuck into developing their local sustainable development agendas. This was followed in 2006 by the Transition Towns movement which mobilised local communities to build a more sustainable future.

The same is now true on climate change. Throughout Britain, and across the world, cities everywhere are not waiting for national governments to act. City leaders are closer to their citizens than national leaders. They have more legitimacy to speak for their people and are better able to build consensus around common purposes and a collective response to shared problems.

They are nimbler than national governments, more able to deliver the innovative and integrated responses required. They are already doing so. City leaders everywhere are bringing together business, communities, voluntary bodies and public authorities to reduce their emissions, invest in renewables and become more resource efficient.

But however creative and enterprising cities are their own efforts will be overwhelmed if climate policy fails. Superstorm Sandy was a wake-up call. Few cities are sited in countries that can afford one $60 billion relief effort let alone the many that will be required if the 2°C threshold is passed. On current rates of carbon emissions this could well be before 2050.

The efforts by many cities around the world to make themselves more environmentally and socially sustainable are impressive and inspiring. They show what can be done where political leaders are still close to the base of society. No national political leadership has been anywhere near as effective in mobilising its people to deal with climate change. But unless city leaders can combine with each other to exercise more political authority at national level their best effort will be undone by the enfeebling emptiness of our political parties.

 

Tom Burke

August 18th 2014.

London

 

Tom Burke has recently written more on this theme with Charles Landry in their pamphlet ‘The Fragile City and the Risk Nexus’ purchasable online from www.charleslandry.com or by clicking on the image below

 

fragile city & risk nexus

 

 

 

 

 

 

 

 

 

 

 

 

Posted in Business, Business Green, Changing the Politics, Cities, Climate Change, Economics, Energy, Energy Efficiency, Energy Security, Environment, Politics, renewables, Sustainability | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

THE POWER OF DREAMS

 

 

This piece first appeared in The Guardian on Thursday 10th July

 

nuclear lights

 

 

 

 

 

 

 

It has always been difficult to see what was attractive about the proposed deal with EDF to build a nuclear reactor at Hinkley Point in Somerset. To bring this off the Government is offering to sell 35 years of index linked tax receipts to the French government to buy electricity at twice its current price.

This is a very big bet on the ability of EDF to build a reactor on time and to budget – a feat they have never accomplished with the reactor type we are buying. It is an even bigger bet on the price of electricity doubling. If it fails to do so then the Government will have to pay EDF even more subsidy.

This is because the Government has guaranteed the price that EDF will receive for all the electricity it produces. It has set this at £92.50. If EDF can only sell Hinkley’s electricity at less than this the Government makes up the difference from a levy on consumers, effectively a tax.

This creates a paradox. The Government is keen to keep electricity prices low to reduce household bills and improve industry’s competitiveness. But if this policy succeeds it will have to pay even more subsidy to EDF from its nuclear tax.

This makes the recent report by Moody’s very bad news indeed for DECC. Wholesale electricity prices have fallen ‘over 40%’ since 2011. They expect power prices to remain this low until at least 2020. Moody’s attribute the price fall to rising renewable output and falling demand.

Thanks to Russia’s intervention in the Ukraine the downward pressure on demand is likely to accelerate. The Commission’s proposal to set a Europe wide energy efficiency target of a 27% reduction by 2030 is widely seen as unambitious. Many voices are now suggesting 41% as an achievable and cost-effective target. That would reduce Europe’s dependence on Russian gas by about 80% and easily pay for the necessary investment by the efficiency saving.

Nor is there any sign that the momentum driving renewables is slowing. Renewable capacity, mainly solar and onshore wind, is now over 290GW in Europe. This is an increase of some 85GW since 2009 and equivalent to the capacity of 300 of Europe’s nuclear power stations.

This is an average of about 21GW of new capacity a year. Even if you divide that by a third to allow for the variable output of renewables, you are still adding 7GW of dispatchable electricity a year. This compares rather well with the decade or more it would take to generate that much power from new nuclear power stations in Britain.

These numbers not only make nuclear a very bad economic bet they also make it too slow to make a useful contribution to reducing carbon emissions. A combination of energy efficiency and renewables will reduce carbon pollution faster and more cheaply. If this were not bad enough news for Britain there is more to come.

Moody’s expect German wholesale power prices to stay low at around £25/MWh – half that of the UK. Nordic power prices, excluding Finland, will be even lower at about £23/MWh. Both Italy and Spain are also likely to have lower wholesale electricity prices than Britain.

It is hard to see what is clever about a policy that will damage the competitiveness of Britain’s manufacturing industry, slow rather than hasten carbon emissions reduction and force Britain’s electricity consumers to subsidise a French nationalised company. It is a tribute to the compelling power of the nuclear dream that England’s political parties have all bought into the fantasy.

 

 

Tom Burke

London

July 6th 2014

 

 

 

 

Posted in Blog, Climate Change, Economics, Energy, Energy Efficiency, Energy Security, Environment, The Guardian | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

SPEECH AT E3G TENTH ANNIVERSARY CELEBRATION – THE DECK AT THE NATIONAL THEATRE – JULY 2ND 2014.

 

REMARKS BY MR TOM BURKE CBE AT THE TENTH ANNIVERSARY CELEBRATION FOR E3G, THE DECK AT THE NATIONAL THEATRE, JULY 2ND 2014.

 

view from the deck

 

 

 

 

 

 

 

 

 

 

 

First of all, let me thank you all for coming this evening. We are celebrating an important waypoint on the journey we started ten years ago. You have all been with us on this journey – helping and encouraging us on our way.

We wanted you to join us as we celebrated our progress and as we work to maintain our reputation for throwing good parties.

I will say something about how we got here and what we do. Then Nick will tell you where we will be going next.

I learnt a long time ago that what really makes the world go round are conversations. If you want to make the world go round differently then you have to make the conversations go round differently.

E3G started in a conversation about setting up a European equivalent of the World Resources Institute. Like many good conversations it did not end up as we expected.

Quite quickly we came to the conclusion the WRI had the wrong business model. Their approach is to pour large quantities of very high quality information into the public policy process in the belief that this will eventually bring about change.

Between us we had worked for too long in government, business and civil society to believe that this works. Our experience was that changing environmental outcomes required you to tunnel through the institutional and political obstacles to change.

It was out of this insight that E3G was born.

We are often asked about the name. There is some disagreement among us as to who came up with it. Like many good ideas it has several fathers. If we have another ten years as good as the ones we are celebrating tonight perhaps it will acquire several more.

We have always been clear that we are part of a long tradition of environmentalism in Britain. The first generation of environmentalists were the conservationists from the middle of the 19th Century.

It is a tradition that is alive and thriving to this day and good to see it represented this evening by Mike Clarke from the RSPB.

The second generation were the environmental campaigners who arrived at the end of the nineteen sixties with the founding of Friends of the Earth and Greenpeace and many other campaigning organisations.

The third generation are the environmental professionals. They are largely the product of the huge success of the first two generations in raising public awareness about the fate of the earth.

When I started working for Friends of the Earth in the early seventies there were very few people working professionally on the environment. Now there are hundreds of thousands here and abroad.

They work in business, central and local government, academia, the law, accountancy and consulting and many other places. There are even environmental crime specialists in the police and customs.

What we do in E3G is not really very different from what is done by the conservation and campaigning organisations with whom we work every day. It is more the way we do things. We saw our task as to add capacity to the environmental community – to build on what had already been achieved.

So let me say something briefly about some of the distinctive features of our approach.

We understand the difference between policy and politics. Policy is about where you are going. Politics is about how you are going to get there. As a community we understand policy better than we understand politics.

We understand the need to bring a systems approach to environmental politics to avoid simply shifting problems from one place to another. Otherwise you end up with cannibalistic policies such as trying to deal with climate change by driving the price of carbon up and fuel poverty by driving the cost of energy down.

We know that dealing with climate change and the other mega-stresses facing the planet demands the pooling of sovereignty. This dissolves the difference between foreign and domestic policy. It also makes the success of the EU, as the world most ambitious experiment in the pooling of sovereignty, an imperative.

We focus on developing methodologies to encourage more systematic thinking about the politics of the challenges we face. This has taken us deep into understanding the political economy of key countries for climate change to enable better targeting of climate diplomacy activities.

We are driven as much by a sense of a planet at risk as by the need for government, business and consumers to act more responsibly.

In some ways we are a kind of hedge fund for the environment. We take some intellectual capital, we borrow a lot more and then apply some smart algorithms to leverage political outcomes.

We find ourselves at an extraordinary moment in human history. Almost exactly a hundred years ago the German poet Rilke, wrote these words on the brink of the Great War: ‘strange to see all that was once relations so loosely fluttering, hither and thither in space.’

They could not be more appropriate to now.

We learnt a hard lesson about systemic risks in recent years as the excesses of the bankers came within a whisker of bringing the global economy to its knees.

To keep the globalised economy functioning in a world of seven billion people the financial system must keep investment flowing.

But that financial system itself requires political stability. Without it, the money will not flow and the economy will seize up just like a motor running out of oil.

Few people have yet grasped that political stability requires a stable climate.

As the climate warms and politicians fail we stand on the edge of a systemic geopolitical risk that would be far more catastrophic than anything we experienced a hundred years ago.

It has been a huge privilege for me to work on these issues for the past four decades. The incredible creativity and energy of people and communities everywhere as they tackle the challenges of the Anthropocene is a constant inspiration.

We have the knowledge, the technology and the capital to solve these problems in abundance. There is nothing wrong with the people. But they are let down by the politics.

A core part of our task in E3G is to build a bridge between aspirations and abilities in the base of society and frailties in the commanding heights of government.

And now Nick will say something about how we intend to do our part as we go further along on this journey.

 

Tom Burke

London

July 2nd 2014

 

 

Posted in Business, Changing the Politics, Climate Change, Energy, Energy Efficiency, Energy Security, Environment, People, Politics, Speeches | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

CHINA NIGHTMARE

 

This piece first appeared in Business Green

 

safety first

 

 

 

 

 

 

 

 

The prospect of the Chinese becoming owners, managers and even constructors of nuclear power stations in Britain has caused anxiety in some unexpected places. Both the right and the left, united in their determination to press ahead with more nuclear, have raised objections. Carefully wrapped in a blanket of security rhetoric, their argument boils down to an Augustinian ‘Bring me nuclear, but not by them’.

Meanwhile, a truly substantial reason why we should worry about Chinese involvement in the nuclear industry is yet to be noticed by anyone but the French Nuclear Safety Authority. They have just complained publicly about the lack of communication with their Chinese counterparts. Explaining this to the French Parliament they pointed out that ‘one of the difficulties in our relations is that the Chinese safety authorities lack means. They are overwhelmed.’

This led one of the French regulators to worry that ‘It’s not always easy to know what is happening at the Taishan site.’ (where Areva are constructing a reactor of the same type as they want to build in Britain). Another French inspector reported seeing big machinery such as steam generators and pumps not being maintained at ‘an adequate level.’

So why does this matter to us? We have very good safety regulators with an impressive track record of managing nuclear facilities well. We should worry about it because the Chinese are currently building only 28 reactors at the same time. This is the fastest rate of reactor build anywhere ever. Even so, they intend to double this build rate before the end of this decade. This is likely to make ‘overwhelmed’ seem like an understatement.

The importance of a rigorous regulatory regime has long been understood by the nuclear industry to be essential to retaining public confidence. ‘ An accident anywhere is an accident everywhere.’ has long been a mantra of industry leaders. Among the many contributors to the seriousness of the accident at Fukushima were failings in the nuclear regulatory culture.

Britain’s nuclear reactor programmes may have been a regulatory success but they have been an economic failure. A former head of the then nationalised electricity industry told Parliament that the AGR programme was ‘the worst civil engineering disaster in British history’. But this had one huge, if unlooked for advantage. No-one else had reactors like them. This meant that when the accidents at Three Mile Island, Chernobyl and Fukushima happened we were well placed to argue that it couldn’t happen here.

If we go ahead with the reactor at Hinkley this comfortable position will no longer be defensible. Hinkley will be a pressurised water reactor (PWR) just like most of the reactors in operation around the world and all those the Chinese are building. If the already stretched  Chinese nuclear regulators prove unable to prevent a nuclear accident in China it will have  direct repercussions here.

This compounds the gamble that the British government is taking with Hinkley. Not only are we selling 35 years of index linked tax receipts to the French government in return for electricity at twice the price we are currently paying for it but we are also placing the security of our future electricity supply into the hands of China’s ‘overwhelmed’ nuclear regulators.

If they fail to prevent an accident at a PWR in China it is very unlikely that the people of Somerset, or the rest of the country for that matter, will consent to one continuing to operate in Britain.

 

Tom Burke

London

24th June 2014

 

 

Posted in Blog, Business Green, Economics, Energy, Energy Security, Environment, International, Nuclear | Tagged , , , , , , , , , , , , , , , , | Leave a comment

THE FUTURE IS COMING READY OR NOT

 

The following speech talks about the looming collision between $6 trillion of investment in oil and gas over the next ten years and the agreement by governments to keep the rise in global temperature below 2°C. This collision will transform the human prospect. It poses a dilemma for governments struggling to maintain both economic and climate security. The step out from between the horns of this dilemma we need imagination, Innovation, ingenuity and investment.

 

charging bull statue wall street

 

Thank you very much for asking me to come and speak to you this evening. In recent years, working with Rio Tinto, I have been much more involved with iron mountains than green mountains.

So it was a particular pleasure not only to get the invitation but also to learn about what is happening under your green mountain in Norway. It is a good story and I am pleased to be able to help to bring it to a wider audience.

The edict that you should never make predictions, especially about the future is usually attributed to the baseball player Yogi Berra.

But, as with many other lines that have passed into our collective memory, there are many claims to authorship. These have ranged from the Danish physicist Niels Bohr, one of the fathers of the atom bomb, to the Hollywood film maker Sam Goldwyn.

Since Yogi Berra also said that ‘ I never said most of the things I said’ it is quite possible that he never did say it. Indeed, several authorities have another baseball player few people have ever heard of called Casey Stengel as the author.

However, this is not a knot I am going to untangle this evening. Instead I am going to take as my theme another Yogi Berra saying: ‘The future ain’t what it used to be.’

It is definitely a different future than the one we might have expected at the beginning of this century.

And ten years from now it will be different again.

If you think you have seen a lot of change in the last ten years, then, to quote another famous American, ‘You ain’t seen nothing yet’.

This extraordinary acceleration in the rate of change is driven by the tectonic forces globalisation and population growth.

More people, doing more things with each other, faster and more often equals more change. So much change that these days the future sometimes seems almost to have passed before it arrived.

Much of this change has been for the better. More better educated people lead healthier, longer, more prosperous and more secure lives than ever before in history.

But, as the opportunities have grown so, too, have the risks. As we have learnt from our brutal experience with the bankers, it is all too easy to pay more attention to opportunities than to risks.

The hangover we are now experiencing with the economy is a consequence of political leaders everywhere, on both the left and right, being unwilling to face up to difficult choices. Instead, with the willing aid of the bankers, they dissolved those choices in an ocean of public and private debt.

As we all now know, the reckoning when it came was, and remains, painful.

We are now repeating this error in a way that will have much more serious consequences. Unwilling to make difficult choices about our energy future our political leaders are running up a colossal mountain of carbon debt.

When the reckoning with the climate comes it will be more painful and more prolonged that our reckoning with financial debt.

Economies eventually recover. The climate will not.

Many different streams of progress have contributed to the swelling river of prosperity that has enriched the lives of so many people over the last seventy years. Driving each of those streams has been the availability of abundant and cheap coal, oil and gas.

As we burnt the fossil fuels so carbon dioxide accumulated in the atmosphere. From 300 parts per million just after World War Two to today’s 400 parts per million.

As the carbon accumulated so the climate changed. The world is now about one degree warmer than it was a century ago.

This doesn’t sound like much but it is already enough to begin disrupting the prosperity and security we take for granted. As that change progresses, the disruption will grow,

It is this prospect that has compelled the world’s leaders to agree to keep the eventual rise in temperature to less than two degrees. This is a goal the leaders of the world’s largest economies have reaffirmed today at the G7 meeting in Brussels.

To get there we must build a carbon neutral global energy system by around the middle of the century.

The low carbon technology to do this is already available. There will be much more in coming decades. We do not have a technology problem.

But our leaders have yet to match their actions to their words.

Last year the world’s oil companies invested over six hundred billion dollars in getting the oil and gas to drive the economy. They plan to spend about the same for each of the next ten years to keep the oil and gas flowing.

If they do so the world will be burning more fossil fuels by the middle of the century than it is now.

A collision is looming between the six trillion dollars the oil companies are planning to spend and the aim of governments to keep the rise in temperature below two degrees.

The consequences of collisions on this scale can be spectacular but they are rarely good.

This collision will shape the future for all of us.

It cannot be avoided hence the question: Are we ready?

Because of it the world as we know it will be transformed over the next thirty years.

This is true whether climate policy succeeds or fails.

If it succeeds then our energy system will be changed beyond recognition as fossil fuels are phased out.

Success will bring with it a wide range of co-benefits in both economic efficiency and human well-being. Food and water security for billions of people will be maintained.

If it fails then global temperatures will rise inexorably, and for all practical purposes, irreversibly.

Food and water security will be undermined and ever larger numbers of people will be displaced, exposed to conflict and disease and subject to deeper climate induced poverty.

In these circumstances preserving the political support for the international institutions that have sustained the prosperity and security of billions of people over half a century will become progressively more difficult.

The challenge for governments is to maintain economic security without sacrificing climate security. This poses a real dilemma.

Without reliable access to affordable energy, economic security is put at risk. If that access is provided, as now, by fossil fuels, the climate will change. If the climate changes then economic security is put at risk.

Dilemmas are difficult. If you choose to deal with one of the horns, the other one gets you. If you do nothing – the preferred response of government to dilemmas – both horns get you.

The only effective way to deal with a dilemma is to step out from between the horns.

This means using imagination, innovation, ingenuity and investment to avoid making a false choice between economic security and climate security.

We cannot trade-off a bit less economic security for a bit more climate security – or the reverse. Such trade-offs may be possible in economists’ models but they are rarely available in the real world.

We need, and can have, both economic and climate security. But to do so we need to make full use of those human attributes that were so central to building and taking the opportunities that are exposing us to climate risk:

-     The imagination to see a better world;

-     The innovation to develop the tools to build it;

-     The ingenuity to mobilise communities to use those tools;

-     The willingness to invest the resources to make real what we can imagine.

I am not brave enough to say much with real confidence about the future. But two things seem to me to be clear. We will be living in a world that is richer in information and more capable of deriving value from it. Electricity will be a more important part of the way people access energy services.

Those companies that will succeed in the turbulent future we face as our present energy system collides with the climate will be those that are ready to face that future. They will be those companies that have the imagination, ingenuity and courage to invest in innovation to step out from between the horns. This is what Green Mountain are doing and why I have been particularly pleased to come a speak here this evening.

 

 

Tom Burke

June 5th 2014

London

 

 

Posted in Blog, Business, Climate Change, Economics, Energy, Energy Security, Oil and Gas, Politics, Speeches, The Human Cost | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Discussing why President Obama’s proposed carbon cuts are significant – BBC News at 10 – 2nd June 2014

 

coal power station

 

Discussing why new carbon cuts proposed by President Obama are significant and how they could offer much-needed momentum to UN climate talks

A president who is prepared to outflank congress, and therefore maybe produce more wrath and obstacles on other issues, is saying this is a really serious issue that I personally am going to put personal capital behind.

You can watch a clip here BBC News at 10

 

 

 

 

Posted in Energy | Leave a comment

SPEAKING WITH A FORKED TONGUE

 

This article first appeared in Business Green

 

snake_tongue

.

Last month, under pressure from activist investors, Exxon issued a report to their shareholders on climate change. To no-one’s surprise they found that “none of our hydrocarbon assets are now or will become ‘stranded’”. Some saw this as an important victory for a campaign by the ethical investment community to get oil companies to assess their climate risk. Others, on reading the statement, saw it more as a declaration of war on government efforts to meet their obligation under the climate treaty to keep the eventual rise in global temperature to below 2°C.

It is certainly wise to treat anything Exxon has to say on climate change with care. They have been known to speak with a forked tongue. At the turn of the century former Exxon CEO, Lee Raymond, came to Europe calling on governments not to ratify the Kyoto Protocol unless China also took on binding obligations to reduce emissions. He then went to China and advised the Chinese not to put their economy at risk by following Europe into limiting their carbon emissions.

Exxon are admired by their peers for their disciplined performance. They do what they do very well by focussing massive resources on problems they think important. There is no chance that a statement this significant would have been issued without the most exhaustive analysis of every single word. This makes it worthwhile to pay close attention to exactly what they are saying.

Let’s start with what they believe. “Exxon Mobile believes that changes to the earth’s climate, including those that may result from anthropogenic causes, pose a risk; and, in order to address that risk society should consider economically efficient policies that include both mitigation and adaptation, and that balance reduction in climate risk with other global needs, including the need to sustain and provide for growing populations.”

To the casual reader this sounds like a moderate acceptance of the need for governments to tackle climate change. To make decoding what it actually means easier I have italicised the flock of caveats in which whatever it is Exxon actually believes has been so carefully wrapped.

American criminals talk about the need to be ‘lawyered up’ to protect themselves from investigation. There can be little doubt about the devious part lawyers played in drafting of this statement. Reading the passage without the italicised phrases gives you a pretty good idea of what Exxon is trying so hard not to say,

The first caveat is Exxon’s get out of jail card. It means even if the climate is changing it is nothing to do with Exxon. This directly repudiates the core finding of the science of climate change. It is now clear beyond all reasonable doubt that human burning of fossil fuels, including those produced by Exxon, is causing the climate to change.

People are routinely executed in the United States on the basis of evidence far less certain than that supporting the conclusions of the IPCC. Thus Exxon have been very careful not to accept that their activities are causing the climate to change. Clearly, if you do not accept that your oil and gas assets are the problem it is much easier to conclude that they will not be stranded.

The second caveat is a very careful way of not endorsing action by governments on climate change. Most of us think that society includes government but Exxon is being very careful not to allow anyone to say to governments that even Exxon believe you should do something. In any case, Exxon does not believe that society should actually do anything, only that it should ‘consider’ policies. All over the world, especially in the United States, there are archives full of policies on climate change that have been considered but not adopted.

Furthermore, those policies to be considered should be ‘economically efficient’. Ordinary people this means something useful like at the lowest cost or in the fastest time. Actually economists mean by ‘efficient’ policies those which do not disrupt the operation of markets. But the point of climate policies is precisely to disrupt the efficiently operating fossil fuels markets. So this caveat turns out to mean that Exxon believes society should consider climate policies which will not disrupt its business.

Of all the words in the political dictionary ‘balance’ is one that most immediately signals deceit ahead. No-one using the word ‘balance’ in this context is calling for an evidence based and inclusive social judgement about priorities. Proposers of ‘balance’ are actually seeking to define anyone who does not agree with them as an unbalanced extremist. This is not Exxon calling for rational discourse so much as a pre-emptive move in a political war.

No-one should be under any illusions about where Exxon are going on climate change. They have set out their stall with typical rigour. They do not believe that climate change should impede their ability to deliver value to their shareholders from their existing asset base. They are going to do everything they can to ensure that government policies do not prevent them from doing so. The rest of the business community now needs to think much harder than it has in the past about whether this ambition is compatible with their own duty to deliver value.

.

Tom Burke

London

May 11th 2014

.

Posted in Blog, Business, Business Green, Climate Change, Economics, Energy, Energy Security, Environment, Oil and Gas | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Why Europe matters and why the European elections matter – E3G

Posted in Blog, Business, Campaigning, Changing the Politics, Climate Change, Domestic, Economics, Energy, Energy Efficiency, Energy Security, Environment, European, Politics, Video blog | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Cities lead the energy transition

This article first appeared in Revolve Magazine on April 29, 2014

Bristol

The message at Energy Cities’ annual rendez-vous was clear: cities are the interface with citizens and by default (since cities are growing exponentially around the world) they are the mandatory motors of innovative change to realize the urban energy transition more effectively and efficiently.

Despite last minute location changes of Energy Cities’ meeting this year from Riga, Latvia, to Brussels, the capital of Belgium and of Europe boasts numerous energy efficiency initiatives particularly in the building sector where efforts are being made to retrofit and to meet ‘passive’ building standards in all new construction.

Each city is special in its own way and Brussels, amongst many others, competes each year to highlight their projects and win the European Commission’s Green Capital Award. Copenhagen won in 2014, Nantes won in 2013, and Bristol – the digital urban hub – won for 2015.

Founding Director of Third Generation Environmentalism (E3G), Tom Burke, congratulates the EU for organizing this award linking the supra- and sub-national levels of communication and governance. Like financing renewable and energy efficient projects, the communications side of operations is “a note in a complicated song” in which the chorus is all about what nation-states are not doing.

Mr. Burke asserts that “national policy is failing cities”: city actions are often constrained by national level and so cities need to coordinate horizontally to apply more pressure vertically on their respective national governments. As described in the booklet “The Fragile City & The Risk Nexus”, cities need to build alliances and to reverse the flow of political power back to the citizens.

Sonderborg

Benjamin Barber, author of Jihad vs. McWorld and If Mayors Ruled the World (2013), agrees and claims that “it’s time for a cities revolution”: cities produce 80% of global wealth and they need to keep that financial power to build more sustainable urban areas rather than squandering resources on ineffective national policies.

Mr. Barber pushes for three intertwined courses of action: conservation by using less energy and better insulation for example, changing behaviors such as recycling and re-using products, and systemic change to “stop taking carbon out of the earth”. Essentially, new models of governance need to emerge and address “dysfunctional” national governments and their disconnect with citizens.

At the core of the debate is the role of cities and their relation to citizens. Interesting initiatives are underway, including twinning programs where cities and municipalities from Europe and beyond can share their projects and experiences. This is an excellent opportunity for cities to engage and learn from each other, as they did at the Energy Cities 2014 annual gathering:

Seven groups shared their cooperative initiatives including the cities of Leicester, England and Rajkot, India. These cities took their formal twinning as an opportunity to deal with joint issues, exchange technical knowledge and cooperate on renewable energy. In a project originally funded by the EU but later by the Commonwealth Local Government Forum Good Practice Scheme, they have so far achieved a great deal in mobilizing support for renewable energy, including solar and biomass, in Leicester and Rajkot.

In Rajkot, an energy park has been conceptualized, traffic blinkers and solar power street lights have been installed and a biomass and solar power advice line for the public, business and government has been established in Rajkot and Leicester. The teams in India and the UK are looking to the future for ways to work together and integrate energy issues into all new schemes: in Rajkot, for example, new social housing will have solar panels installed.

Representatives from Sønderborg, Denmark, are twinning with Haiyan County, China. This partnership was established under the framework of the EU-China Urbanization Partnership and is developing new low-carbon buildings and a new zero-carbon industrial zone. A major Danish company, Danfoss, a world leader within energy-efficient and climate-friendly solutions for industry was already localized in Haiyan, and using Danish models of energy saving solutions, three low carbon buildings in Haiyan have been developed. In the future, Sønderborg and Haiyan are hoping to develop a “Danish Zero Carbon” street in Haiyan and to establish a Danish-Chinese vocational school for sustainable construction in Haiyan.

Such constructive projects have tremendous potential to lead the energy transition and to offer solutions to current economical and political crises. Ukrainian cities, for instance, called on Energy Cities’ members to intensify cooperation and twinnings on sustainable energy (mostly via the Covenant of Mayors) to find synergies as a solution to the current regional conflict.

Posted in Business, Changing the Politics, Climate Change, Domestic, Economics, Energy, Energy Efficiency, Energy Security, European, Politics | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment