The Year Public Pressure Influenced Lending Practices

Development banks around the world face increasing public pressure as their lending practices support eco-damaging projects.
Development banks around the world face increasing public pressure as their lending practices support eco-damaging projects.

SOMERSET, KY — Rex Tillerson, the chairman of ExxonMobil, asked by president-elect Donald Trump to serve as secretary of state. Scott Pruitt, the climate-denying, energy-financed attorney general of Oklahoma, nominated for EPA administrator. Rick Perry, former governor of Texas and a board member of Energy Transfer Partners (developer of the Dakota Access Pipeline), nominated to oversee the Energy Department.

The intent in Trump’s brotherhood of black fuels is clear enough — stabilize erratic global markets, push energy prices up, recover assets that were on the way to being stranded, and cash flow again on producing expensive oil, coal, and natural gas.

Ample fossil energy supplies and favorable prices serve as the two central themes of Trump’s pledge to “Make America Great Again.” In service to that goal Trump invited Vladimir Putin, the Russian president, to sit as a sort of cabinet member ex-officio. The Koch brothers, along with the executives of most every other American fossil energy company, cheer from the bench.

Americans of clear mind and useful values are demonstrably nervous. The White House and the executive offices of the world’s fossil fuel companies are powerful forums to exert influence. Can Trump and his fossil fuel allies succeed? Of course they can. I do not, however, believe they will.

I’ve reported extensively since visiting the Indian Himalayas in 2013 on the more powerful global trends that not only are impeding conventional energy development, they have initiated a sweeping transition in production practices, technology, and use. Coal production and consumption is falling in China. The Philippines is closing damaging mines. Civic rebellion is blocking new coal-fired power plants in Bangladesh, and impeding development of oil and natural gas pipelines in the United States.

Solar and wind generating technology is now cheaper than new coal-fired power generation and comparable in cost to natural gas-fueled generation. India is abandoning its mega power program to build mammoth 4,000-megawatt coal-fired power plants. Instead it is pursuing new solar and wind generating installations. South Africa has developed one of the world’s successful clean energy development programs.

Floods, droughts, earthquakes, and fire are causing havoc in the world’s fossil energy regions. And the costs of developing all of the fossil fuels is rising as prices for alternatives drop.

It is these trends that are stranding billions of dollars of resource assets around the world and causing a growing panic in the halls of government, boardrooms, and executive suites. And none are likely to be slowed.

This year, during seven weeks of reporting in South Africa, I learned about another new and powerful trend that is reshaping markets around the world — the pressure that communities and a select group of investigative groups are putting on the world’s big banks to change their lending practices.

The headwinds of transition are whipping through the energy sector. The Trump administration’s effort to stabilize oil prices confronts the elements of the rugged weather — erratic markets, new transportation and efficiency technology, and rapidly rising production costs. He may try to suspend NEPA requirements on big projects. He also could try to withdraw non-profit status from important NGOs, a tactic developed in other nations. But the American president-elect and his allies face powerful civic opposition around the world and in the red rural counties that voted for him. Here in Kentucky, I wrote about a big fight over a natural gas pipeline. Continue reading “The Year Public Pressure Influenced Lending Practices”

Do Republicans Hate Cities? Generally Yes

Grand Central Station on 42nd Street is a hive of energy every day using a transport technology that Republicans don't support. Photo/Keith Schneider
Grand Central Station on 42nd Street is a hive of energy every day using a transport technology that Republicans don’t support. Photo/Keith Schneider

NEW YORK — In the evenings the sidewalks along First Avenue, between 10th and Houston Streets, are a jammed bustle of young people crowded into bars, lined up for tables at good restaurants, or walking fast with heads bowed and faces lit by incoming smart phone texts.

First Avenue, like so many other neighborhoods in New York, is a tableau of urban revival, an example of what happens when smart investments and informed entrepreneurism foster economic and environmental transition. New York City, you may recall, was in such dire shape in the 1970s and 1980s that crime ruled the streets, fiscal collapse was ever-present, and people and companies left in droves. First Avenue in those days was dirty, dark, and dangerous.

New York is not that place anymore, and hasn’t been since the start of the century. New York is an engine of growth and job opportunities, a city with clean air, ample and safe parks, improving water quality, slim people, improving schools, and an attitude of confidence and hope. In all of these attributes New York also resembles Chicago, Boston, Philadelphia, Louisville, Pittsburgh, Washington, Denver, Portland, Seattle, San Francisco, Boise, Dallas, Charleston, Cincinnati and most other major American metropolitan regions.

In each of these cities job growth is climbing rapidly, crime is stable or declining, unemployment rates are lower than the state at large, and real estate values are heading up, in many instances swiftly. In other measures American cities are a study in improving social conditions and prosperity. Wages are rising. Young adults attend college and are getting married. And, just as First Avenue’s businesses and watering holes are busy with customers, so too are the mercantile streets of big cities across the country.

Oh! There’s one more distinction. American cities are overwhelmingly filled with adults who support Democrats for state and national offices. They are also filled with adults who not only generally believe that the rest of America is getting along better like they are, they have just the scantest idea of the depth of the dismay, the anger, the resentment that people in the far suburbs and rural regions have for cities and their residents.

The High Line, an elevated park in New York built with public and private funds on an old rail service train line. Photo/Keith Schneider
The High Line, an elevated park in New York built with public and private funds on an old rail service train line. Photo/Keith Schneider

Those divisions now express themselves in dangerous ideas harbored in the Republican party about limiting state and federal investments in transit, education, streets, law enforcement, housing, business loans, and environmental safeguards. But even as they support a risky agenda of tax-cutting and smaller government, many of those very same voters and their families have also chosen you’re-on-your-own results — limited job opportunities, low wages, and hardship.

Nonmetro and metro quarterly employment indices
Continue reading “Do Republicans Hate Cities? Generally Yes”

Peru’s Recession and Insurgency Revives Its Democracy; Example For the U.S.?

More than 5,000 campesinos from the Andes march in a show of unity in Cajamarca, Peru. Photo/Keith Schneider
More than 5,000 campesinos from the Andes march in a show of unity in Cajamarca, Peru. Photo/Keith Schneider

CAJAMARCA, Peru – North of Lima, 350 miles, this regional capital is spread across a high mountain valley near the northern terminus of the Andes Mountains. Spanish conquistadors began their conquest of Latin America here in the early 16th century when they murdered the last Incan emperor. The room where the Incan chief is said to have spent his last days is a half-block from Cajamarca’s central square. Roman Catholic cathedrals flank the southern and northern boundaries of the square, which is alive with strollers and skateboarders and people warming themselves in a bright winter sun.

The scene of order that greets visitors, the clean streets and the shops that stay open well past sunset, is a display of order that while not new isn’t all that old either. In the 1980s this city, which today numbers 250,000 residents, was one-third as large and engulfed by the same national economic depression that produced rampant joblessness, and inflation that essentially rendered the currency worthless. In the 1990s, Cajamarca and the villages in the surrounding Andes became a place where leaders and soldiers of the Shining Path, the leftist insurgency, came to heal during the nearly decade-long civil war that killed 70,000 people, according to government estimates.

Members of the Shining Path were a murderous bunch. With death threats, coercion, and targeted killing they sowed fear and disorder. Those who could leave the country, did. Peru’s president, Alberto Fujimori, responded by forming death squads that attacked the insurgents and also murdered a good number of innocent citizens. Fujimori was prosecuted for crimes against humanity, convicted, and in 2009 sentenced to a 25-year prison term.

Earlier this month a social scientist from Australia, Martin Scurrah, who’s spent much of his adult life in Peru, explored the history of Peru’s dark era with me. As his narrative neared its end I remarked that in its basic details — severe economic pain, political insurgency, social disorder, rampant death — it resembled what the United States is now experiencing. Peru’s recent story also produced a contemporary chapter that could hold lessons for the United States.

The matchless alpine meadows of the Peruvian Andes. Photo/Keith Schneider
The matchless alpine meadows of the Peruvian Andes. Photo/Keith Schneider

Continue reading “Peru’s Recession and Insurgency Revives Its Democracy; Example For the U.S.?”

The Society of Foolhardy Folly: Anglers and Hunters Against the Environment

Ice and snow make their final appearance this week in northern Michigan. Fishermen put their hooks in clean water even as their votes supported lawmakers devoted to dismantling safeguards. Otter Creek runs cold and clear in Sleeping Bear Dunes National Lakeshore this week. Photo/Keith Schneider
Ice and snow make their final appearance this week in northern Michigan. Fishermen put their hooks in clean water even as their votes supported lawmakers devoted to dismantling safeguards. Here, Otter Creek runs cold and clear in Sleeping Bear Dunes National Lakeshore. Photo/Keith Schneider

EMPIRE, MI — Days before ice crowded back into Lake Michigan’s Platte Bay late last week, the shallow waters opened and fishermen planted their poles in the soft sand at the mouth of the Platte River and waited for steelhead and maybe a brown trout. Clean, cold water is abundant in our region in large part due to the safeguards contained in the 1972 Clean Water Act, arguably the most important environmental protection statute in history.

The law set limits on multiple pollutants from multiple sources. American courts enforced its provisions. Governments around the world enacted their own versions of the clean water law. And in the United States cleaner water gave rise to multi-billion dollar fisheries, new shoreline development in the nation’s cities, hundreds of thousands of businesses and millions of jobs in the recreational economy, and the untold satisfaction that the United States once was capable of responding effectively to a big national problem.

But when I wandered up to the parking area the pickups sported troubling evidence of how estranged we are, how politically disembodied we’ve become. The anti-EPA bumper stickers were apparent. “Defund the EPA.” “Regulate the EPA.” The men so intent on securing the fish that swam in the clean water of Lake Michigan also were engaged in a political abstraction. They very clearly voted for the right’s insurgent lawmakers, men and women in our state Legislature and national Congress not at all interested in advancing a tradition of environmental safeguards.

Disagreement about the scope and intensity of environmental regulations is a half-century old in the United States. What’s more — if you ask GOP voters what regulation they’d like to weaken — one that makes the air and water dirtier, opens the meadow next door to toxic waste dumping, allows the favorite wetland to be filled — they most often don’t have an answer. That’s because most Americans appreciate the cleaner and safer country we’ve produced with our environmental protections. I know a Republican family in Kentucky who took a trip to China, breathed the filthy air, smelled the putrid water, and returned home with this vow: “I’ll never complain about the EPA again.”

Platte Bay in Sleeping Bear Dunes National Lakeshore last week. The park was established in 1970 at the height of American passion for protecting its best natural places. Photo/Keith Schneider
Platte Bay in Sleeping Bear Dunes National Lakeshore last week. The park was established in 1970 at the height of American passion for protecting its best natural places. Photo/Keith Schneider

Environmental regulations and the EPA, though, are part of the nihilistic GOP message machine that asserts nothing really matters except shrinking the government, lowering taxes, ending regulation, opposing gun control and hating Obama. That’s a management menu, while provocative, that offers not a single cogent response to the economic and ecological storms that are battering us now. The Democrats are less dangerous, but also not nearly as articulate and determined.

Neither party is ready to describe the risks of what we face, and the many changes that are required to build a new era of safety and prosperity. Certainly, defending the nation’s existing environmental safeguards is a priority. Continue reading “The Society of Foolhardy Folly: Anglers and Hunters Against the Environment”

Steps To A Safer World

World leaders gathered in Copenhagen in 2009 to reach agreement on slowing climate change. Not much was done. Photo/Keith Schneider
World leaders gathered in Copenhagen in 2009 to reach agreement on slowing climate change. Not much was done at the time. More may be possible now. Photo/Keith Schneider

Bloomberg reported today that Royal Dutch Shell and Unilever NV joined 68 other companies in urging world governments to cap carbon emissions at levels that scientists say could stabilize the rising temperatures and keep the planet safer. Governments also are still working to develop a treaty for consideration in 2015 that would limit carbon emissions and keep the temperature rise since the late 19th century to 2 degrees Celsius or 3.6 degrees Fahrenheit.

Even Exxon Mobil takes seriously the threat of climate change, or at least the risk that governments may regulate carbon emissions. In March, at the insistence of shareholders, Exxon Mobil agreed to publish a report on its vulnerability to such regulations and the potential that some portion of its oil, gas, and coal reserves could become stranded assets.

Of all the steps that need to be taken to secure the planet from certain ecological turmoil caused by the warming atmosphere, arguably none is more critical than reducing carbon pollution. In April 2009, researchers from Germany, England, and Switzerland, led by Malte Meinshausen, a climatologist at Germany’s Potsdam Institute for Climate Impact, published “Greenhouse-Gas Emission Targets for Limiting Global Warming to 2C” in Nature, the science journal.

The authors found that human beings had no chance to keep global temperatures below 2 degrees Celsius unless the world released no more than 1,437 gigatons (1 gigaton is 1 billion metric tons) of carbon dioxide from 2000 to 2050. The scientists made a strong case for ensuring that the world’s atmospheric temperature not increase 2 degrees by limiting carbon emissions to 886 gigatons.

The problem is that 234 gigatons had already been emitted and at that rate the proposed 886 gigaton limit would be exceeded by 2024. Bill McKibben, in a breath-taking article in Rolling Stone two years ago, explained that if the world’s energy companies developed and sold all of the fossil energy in their global reserves, the amount of carbon released into the atmosphere would vastly exceed any of the proposed gigaton limits.

We live on a beautiful planet that is warming. This is Bass Lake in Sleeping Bear Dunes National Lakeshore. Photo/Keith Schneider
We live on a beautiful planet that is warming. This is Bass Lake in Sleeping Bear Dunes National Lakeshore. Photo/Keith Schneider

Most of the world’s governments have been slow to embrace the idea that climate change is an authentic threat to their national well-being. That’s because the killing hurricanes and typhoons, the murderous floods, the crop-ravaging and food price-raising droughts, the wicked fires aren’t wearing military uniforms. The attackers don’t carry guns and don’t seek to plant flags of invasion.

But the world’s people are coming to recognize the danger that is unfolding around them. And with steady strength they are calling for regulation on carbon emissions. It’s unclear how long a political breakthrough will take in the United States, Europe, China, India and other big carbon-producing regions. But pricing carbon and limiting carbon combustion seems inevitable, which is why energy markets are nervous about stranding trillions of dollars in coal and oil that will need to be left undeveloped. Continue reading “Steps To A Safer World”