At the Front Lines of the Global Transition

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Cities Are Stronghold of Performance in Maelstrom of American Disarray

Ohio's capital city adopted a reconstruction plan for encouraging development 14 years ago that emphasized three unexpected ingredients: more grass, less water and targeted taxpayer spending. Photo/Keith Schneider

Ohio’s capital city adopted a reconstruction plan for encouraging development 14 years ago that emphasized three unexpected ingredients: more grass, less water and targeted taxpayer spending. Photo/Keith Schneider

COLUMBUS, OH — In the year of Trump it’s plain that the United States is entering a new and reckless age. Our federal lawmakers neglect their constitutional duties to legislate in the public interest. Ideology and inflexibility, the gravest threats to a democracy, are elevated as virtues on the political right and political left. Random massacres occur with weekly frequency. Fear and distrust and racism and hate have been unleashed as mainstream attitudes.

Where are the places that inspire order? Where are the places that effectively manage their affairs with a goal of adding to civility and the common good?

Perhaps it is surprising, but a good number of American cities answer those questions. As readers of ModeShift know, some of my time each year is taken up with reporting real estate articles for The New York Times. Generally the narrative that emerges from details about construction costs and square feet amounts to a profile of the cities that I visit.

What I find, from New York to Boston to San Francisco, Grand Rapids to Louisville, Buffalo to Cleveland to Toledo to Cincinnati, is that many of America’s big cities, and a good number of its mid-size cities, are thriving. Largely without the help of the federal government and state Legislatures, elected leaders are collaborating with business executives and civic organizations to invest in ways that respond intelligently to the market conditions of this century.

In each city the formula for progress differs in the specifics. Buffalo reorganized itself around a university medical center and a transit line. Toledo turned to Chinese investors. Cleveland spent $800 million on entertainment and transit infrastructure – two stadiums, the Rock and Roll Hall of Fame, a bus rapid transit route, and moving a commuter rail station — to invite $5 billion in mostly private downtown redevelopment. Sacramento tore down a moribund downtown shopping mall and built a new arena for the NBA Sacramento Kings.

Taken collectively, though, the various development strategies pursued by American cities have some common traits. Excellent elected leadership and pragmatic business collaboration are essential to developing and executing redevelopment ideas that take at least a decade, and often a generation, to complete. Redevelopment plans incorporate one or more of the following ingredients — competent municipal agencies, park construction, improved transit, strengthened schools, public safety, adequate amounts of reasonably priced housing, recruiting innovators and entrepreneurial businesses.

Over the next month or so I’ll be reporting on cities in the South and Midwest – Columbus, Cleveland, and Chattanooga –all of which are doing well. They are following effective redevelopment strategies that are much bolder, and more effective, than anything pursued by most states and certainly by America’s imprudent Congress. The latest report from a city making strong progress in adding value to the lives of its citizens is from Columbus, which I visited early in May. Read More

South Africa Bullied by Climate Change

There are numerous places in the world now to measure the effects of climate change. One of them is in Stellenbosch, South Africa. Photo/Keith Schneider

There are numerous places in the world now to measure the effects of climate change. One of them is in Stellenbosch, South Africa. Photo/Keith Schneider

Until a ferocious drought withered crops, turned rivers to trickles, and dried up municipal drinking water supplies, one of Limpopo province’s distinctions was the ample sun and good soil that made it South Africa’s premier producer of fruits and vegetables.

Another distinction was that farmers developed an informal accord to share scarce water with coal companies that were busy developing the Waterberg Coalfield that lies beneath dry central Limpopo.

This week Yale Environment 360, the fine online environmental news platform edited by Roger Cohn and Fen Montaigne, published my account of the consequences of climate change in South Africa. Since Yale e360 went online in 2008 Roger and Fen have published 10 of my articles about the singular environmental and social trends taking shape globally, the merger of economy and ecology, and its unforgiving collisions. One of those articles in 2010 on North America’s unconventional fuels boom was one of the first national reports on the “economically promising and ecologically risky race to open the next era of hydrocarbon development.”

The rocky and dry valley where Cape Town's water supply starts. Photo/Keith Schneider

The rocky and dry valley where Cape Town’s water supply starts. Photo/Keith Schneider

The current piece describes new findings about climate change and drought in South Africa from a seven-week reporting trip for Circle of Blue earlier this year. The South African drought, the deepest since the early 20th century, shattered the fragile equilibrium in Limpopo between the farm and coal sectors. Pitched battles between farmers, residents, and security officers who support coal development have broken out south of Musina, where Coal Africa proposes to build a $406 million mine, and where some of the country’s most productive vegetable farms operate. The mine would consume 1 million gallons of water a day, according to company disclosures. Both the mine and neighboring irrigated farms are dependent on the Nzhelele River, which has diminished to a shallow stream.

Limpopo, about the size of Louisiana, borders Zimbabwe in South Africa’s north. In Lephalale, about 210 miles east of Musina, farmers and other rural residents are locked in battles to protect water supplies from new power plants, and plans to expand mining in the Waterberg Coalfield.

Eskom, South Africa’s state-owned electric utility, is building one of the new plants, the 4,800-megawatt Medupi coal-fired power station, on a stretch of dry land west of Lephalale. When fully operational, perhaps by the early 2020s, the plant will consume 6.9 billion gallons of water annually. South Africa anticipated the need for a torrent of process water for the plant by spending $1 billion to build pumping stations, water supply and storage infrastructure, and 130 miles of pipeline to tap the distant Crocodile and Mokolo rivers. The drought, though, is producing fresh evidence that neither the Crocodile nor the Mokolo may have sufficient water in the 2020s and beyond to sustain agriculture, a fast-growing population, existing industries, and a gigantic power plant now estimated to cost $16 billion to complete.

“There are significant difficulties from this drought,” said Dhesigen Naidoo, the chief executive of the National Water Commission, a research and science agency in Pretoria. “The drought cannot be managed the way previous droughts have been managed. In previous droughts we hadn’t factored in climate change. We are convinced that this drought is not part of a normal drought cycle that previously we’ve had in the past. This one is quite different. The combination with the heat wave is unique. The heat wave builds itself into an extreme example of the weather pattern in this part of the world we’ve experienced for at least six years. It tells us we are in quite a different regime. So we regard this as a drought in the climate change scenario, and our planning is working around that.”

South Africa's magnificent Paarl valley north of Cape Town. Photo/Keith Schneider

South Africa’s magnificent Paarl valley north of Cape Town. Photo/Keith Schneider

There are numerous places in the world now to measure the effects of climate change. A June 2013 climate-related flood in the Himalayas wrecked ten hydropower dams and killed thousands of people in Uttrakhand, India. A 12-year drought that ended in Australia in 2010 closed the largest rice production sector in the southern Hemisphere. A four-year drought in California caused hundreds of thousands of acres of orchards and cropland to be idled, contributing to higher food prices in the United States. Greenland’s icecap is melting.

Arguably, though, there are few places where climate change has produced more visible and dire ecological, economic, and social consequences than in Limpopo and South Africa’s eight other provinces. Sixteen years into the 21st century, South Africa forms a kind of regional study center for understanding how climate change can bully governments, economies, and communities.

Read the piece at Yale e360 here.

— Keith Schneider

Millions of South Africans live in informal settlements with scant access to electricity, running water, and sanitation. This settlement is in Paarl. Photo/Keith Schneider

Millions of South Africans live in informal settlements with scant access to electricity, running water, and sanitation. This settlement is in Paarl. Photo/Keith Schneider

President Obama’s Flint Visit is Critique of “Culture of Neglect” That Damages Nation’s Water

Barack Obama, the first president to visit Flint in 42 years, was summoned by water contamination. Photo/Keith Schneider

Barack Obama, the first president to visit Flint in 42 years,
was summoned by water contamination. Photo/Keith Schneider

FLINT, MI —FLINT, MI – Before Barack Obama spent the afternoon in this tormented post-industrial Michigan city last week, the last president that visited Flint was Gerald Ford. That was 1974, just a few months after Richard Nixon resigned the presidency.

Flint in the 1970s provided the vital equipment, and perfectly reflected the auto-oriented, resource-abundant, mobile American way of life nearly half a century ago. General Motors employed 80,000 people in its Flint car and truck production plants, and the city was home to 190,000 residents. The city displayed what happens when manufacturing skill and labor strength delivered the highest industrial wages in the world, and handsome tree-lined neighborhoods.

On a characteristically chilly and rainy early spring Michigan day, President Obama dropped into an apprehensive city that is less than half the size it was in 1970, and a victim of state government mismanagement that contaminated its drinking water with lead.

The poisons in the city’s water supply are a manmade catastrophe, exposing children to unsafe levels of lead, frightening parents, and damaging Flint’s redevelopment. Flint’s local health crisis also is having national consequences. It is another in a growing number of water-related emergencies in the United States – along with deep droughts in Texas and California, poisoned algae in Lake Erie, depleted groundwater in the Great Plains, and killing floods in the Southeast – that are elevating to public attention grave weaknesses in the nation’s water management programs. More than any of the other water-related events, Flint’s poisoned water has crystalized the need for lawmakers to actively support the $1 trillion in infrastructure projects over the next generation to fix it.

President's listeners in Flint's Northwestern High School gymnasium. Photo/Keith Schneider

President’s listeners in Flint’s Northwestern High School gymnasium. Photo/Keith Schneider

Two Goals For Visit
The president had two missions during his Wednesday meetings here. The first was to listen to residents and assure them that he is personally leading the government project to replace lead water lines and make Flint’s drinking water safe again. Obama said he rode in the presidential limousine with Flint’s Democratic Mayor Karen Weaver, and Republican Governor Rick Snyder, to assure that he and they were collaborating on the project. Read More

Public Opposition, Changing Ecology Sap Strength of Fossil Fuel Industries

Coal consumption is rising in India, and opposition to coal use is too as water supplies drop. Here, mining in Meghalaya. Photo/Keith Schneider

Coal consumption is rising in India. Opposition to mining and coal combustion also is increasing as water supplies drop. Here, mining in Meghalaya. Photo/Keith Schneider

It’s been nearly three years since I traveled in Uttarakhand, India to report on the aftermath of a murderous Himalayan flood that killed thousands of Hindu pilgrims and wrecked at least 10 big hydropower dams. Witnessing that much damage from an ecological event changed how I viewed the power of Mother Nature and the wrath she is exhibiting to human communities.

It’s been nearly two years since I reported on how citizens in Assam, India halted construction of the Lower Subansiri dam midway through completion. The moldering concrete of a dam that was supposed to generate 2,000 megawatts of energy was a convincing display of the power of public protest.

It wasn’t until late last year, while reporting from China, that I recognized that both of the events in India, and other human and ecological barriers to development that I’d seen on four other continents were tied together. Changing ecological conditions are prompting powerful civic responses and together are impeding or halting development of mega energy projects around the world.

Economists and financial analysts are starting to recognize the trends, which are translating into powerful signals of economic distress in the energy, mining, power-producing, and farm industries. A good deal of the distress is linked to the Earth’s shifting hydrological conditions caused by climate change. At Circle of Blue, where I serve as senior editor and chief correspondent, we’ve started a project to report on the relationship of water risks to what the financial community calls “stranded assets.”

Concerns about rising carbon levels in the atmosphere, and competition from natural gas suppliers and renewable energy, dampen demand for coal. Global prices for coal, oil, and minerals have tumbled to near-record lows in constant dollars. Coal-fired power plants are being cancelled across Asia. The largest coal companies in the United States are in bankruptcy.

Almost $400 billion in planned development in Canada’s oil sands region, where water volumes in the Athabasca River are in doubt, have been cancelled, according to an analysis by Wood MacKenzie, a research firm.

Hard rock mineral mines are closing on five continents, and fossil fuel developments all over the world are being impeded because of civic rebellions fueled by fears of disruptions to local water supplies. See the teaser for this powerful new film about the global rebellion occurring around the mining, drilling, and combustion of fossil fuels.

Stranded in the Ground
Taken in aggregate the various signals, like channel buoys frantically bobbing in tempestuous seas, cause bankers and economists to express conflicting views about the severity of the market turmoil and whether the global financial system is sound. For the time being, much of the analysis on the financial losses focuses on the plunge in oil and coal prices, and the potential that a huge portion of the global reserves of oil, gas, and coal will be “stranded’ in the ground to curb climate change.

Robert Kaplan, the president of the Dallas Federal Reserve, said earlier this month that banks will suffer losses on energy loans following the collapse in global oil prices, but they will not pose a broad risk to the economy.

“We watch this issue very carefully and we watch related areas of commercial real estate exposure. There will be losses,” Kaplan said in an interview on CNBC. “I don’t think this will be a systemic issue.”

But Mark Harrington, an oil industry consultant, asserted on CNBC in January that defaults on debts in the fossil fuel sector could exceed losses sustained in the 2007-2008 market crash.

“Oil and gas companies borrowed heavily when oil prices were soaring above $70 a barrel,” he wrote on CNBC. “But in the past 24 months, they’ve seen their values and cash flows erode ferociously as oil prices plunge—and that’s made it hard for some to pay back that debt. This could lead to a massive credit crunch like the one we saw in 2008. With our economy just getting back on its feet from the global 2008 financial crisis, timing could not be worse.”

The $16 billion, 4800-megawatt Kusile coal-fired power station in South Africa. It's cost, complexity, size, and water consumption may make the plant a potential stranded asset years before its anticipated completion in the early 2020s. Photo/Keith Schneider

The $16 billion, 4800-megawatt Kusile coal-fired power station in South Africa. It’s cost, complexity, size, and water consumption may make the plant a potential stranded asset years before its anticipated completion in the early 2020s. Photo/Keith Schneider

The difficulty in gaining a firm understanding of the global risk to world financial markets is due, in no small part, to the sharply accelerating pace of environmental and social change. For much of human history ecological transformation took centuries, and seminal social change took generations. In the 21st century the shift in hydrological cycles is occurring over a decade, and social changes – like the global rebellion over mega industrial projects – develop in just a few years. Global markets respond in weeks in some cases, and overnight in others.

“The economic impact of environmental risks is incredibly large already and is now accelerating. Uncertain physical climate change impacts and volatile societal responses to such impacts will almost certainly increase losses across all sectors of the global economy,” said Ben Caldecott, director of the Sustainable Finance Program at the University of Oxford, in an email message. “Given that these impacts are large, growing, and systemic, they can have implications for financial stability. We don’t know whether this might happen and from which part of the financial system.” Read More

Earth Day At 47: Lessons For Sound Development

California Pacific coast at sunset. An oil spill in 1969 that soiled beaches in Santa Barbara was an instigating event for Earth Day. Photo/Keith Schneider

California Pacific coast at sunset. An oil spill in 1969 that soiled beaches in Santa Barbara was an instigating event for Earth Day. Photo/Keith Schneider

OWENSBORO, KY — By now, the 47th observance of Earth Day, the point of summoning people to protect Mother Nature is clear. What started in 1970 as a call to action from the youthful wing of American society has matured into mainstream global operating principles for assuring that human life thrives in the 21st century.

Essentially, that is what the founders of Earth Day anticipated. Earth Day was never just about preventing pollution or conserving imperiled landscapes, though both objectives served as galvanizing ideas for the early annual observances. The organizers correctly predicted that the resource-conserving, waste-reducing, energy-efficient lessons of Earth Day would eventually serve as a development template for nations to succeed.

Natural systems, after all, are powerful. Far more potent, in fact, than mankind’s flimsy transport, food production, electrical distribution, and communications networks. Anybody who tries to switch planes during a mild snowstorm at Chicago O’Hare International Airport knows all about that.

What Happens With Ignorance
What Earth Day’s founders could not have foreseen was how quickly nations would deteriorate by failing to heed environmental values. Mother Earth no longer tolerates wasteful and dirty development paths. Neither do national economies.

Studies of economic performance consistently find that the nations that insist on challenging the Earth’s rapidly evolving environmental conditions are experiencing heightened economic damage — joblessness, social instability, deteriorating health, more poverty, and eroding GDP. South Africa, India, Brazil, Mexico, China, and Russia are visible examples.

One more point. Just as the first Earth Day was inspired by a river that caught fire in Cleveland, Ohio, and a Great Lake that was declared near dead, securing the world’s freshwater reserves is a central goal of Earth Day 2016.

More powerful storms require changes in development strategies around the world. Here, a storm cloud in Indiana. Photo/Keith Schneider

More powerful storms require changes in development strategies around the world. Here, a storm cloud in Indiana. Photo/Keith Schneider

The world recognizes that preventing water pollution is a measure of sound public health management. The world also sees that access to adequate supplies of clean water is an essential economic resource. One reason that American cities have again become some of the world’s most beautiful and livable is the investments made in building new shoreline parks, pedestrian promenades, and neighborhoods along cleaned-up waterways.

Corporate social responsibility executives all over the world spend much of their time today developing new industrial practices that conserve water and use less energy. In California, recycled municipal wastewater, once disparaged as “toilet water,” is now seen as a resource to replenish drinking water aquifers and irrigate cropland. The United Nations last year published its Sustainable Development Goals, a global economic development strategy founded on ecological principles. Access to clean water, and saner water use and consumption, form the basis for 10 of the 17 goals. Read More