A little over a year ago, in a very different world, three economic titans issued “The Carbon Principles,” a list of investment guidelines for electric power producers. Morgan Stanley, Citi, and JP Morgan Chase brought to the table environmental groups like the NRDC and the Environmental Defense Fund with the likes of American Electric Power and Southern Company. The meeting of the minds between Big Finance, Big Coal Consumers, and (relatively) Big Green was a Big Deal.
A previous Morgan Stanley report said that climate change could trigger nothing short of “an economic meltdown” through increased natural disasters, rising food prices, protectionism, and dramatic shifts in the energy economy.
Well, global warming never got the chance to ruin the world’s economy. Simple greed and lack of financial oversight beat it to the punch. We’re in such dire shape financially that anything and everything that’s not of absolutely immediate need is being tossed overboard. In the eyes of many, it’s very tempting to push climate change solutions over the rail.
The Wall Street Journal reported that venture capital investments in green technology were off by 35% in the last quarter of 2008, compared to a year earlier. As if to underscore the point, T. Boone Pickens, the Oklahoma oilman who embraced wind power in a high profile media campaign last summer, has backed off, saying that low natural gas prices won’t allow him to bankroll his enormous wind farms in West Texas. Ironically, Texas has approved $5 billion in new construction of electric transmission lines, one of the main missing pieces Pickens would need to build his windy dream.
The wind power industry, in an unprecedented growth spurt for much of 2008, was left dead in the water when loans and financial backers backed off. Entrepreneurial solar energy companies had the wind knocked out of their sails, with solar manufacturers and contractors forced into layoffs. The Obama stimulus plan, it’s hoped, will pump some air back into these operations.
The falling economy has hurt the switch toward alternatives, but it has hit hard at the fossil fuel industry as well. Former Energy Department official Joe Romm, on his outstanding blog “Climate Progress,” charted the abrupt fall of coal industry stock when President Obama’s EPA cleared the way toward regulating carbon emissions as a pollutant. The EPA’s Environmental Appeals Board ruled Monday, when the markets were closed for Presidents’ Day; by midday Tuesday, five major coal companies’ stock had each lost about 10% of their value. Exxon/Mobil’s fourth-quarter profits dropped 33% as oil prices dropped: Quite a fall, but not enough to stop Exxon from posting all-time record gains for the year.
All this gave way to an economic/environmental/ideological parade of weird soundbites. Not letting their lack of qualifications get in the way, atmospheric scientists have weighed in with economic forecasts. Paul Crutzen, who shared the Nobel in Chemistry for discovery of the ozone hole, sees a failing economy as good for the climate. "It's a cruel thing to say,” he told a recent conference, “But if we are looking at a slowdown in the economy, there will be less fossil fuels burning, so for the climate it could be an advantage.”
One of the skeptics’ favorite climatologists, Tim Ball, opted to blame the global crash on the green movement. “Business with collusion from government began the capitulation when it surrendered to the bullying of environmentalists,” Ball said in a recent column. Follow the link to read the complete column, and you still won’t see much evidence of what exactly he meant by this.
Oh, and back to the banks we mentioned at the top of this piece. Since Morgan Stanley, Citi, and JP Morgan Chase jumped on the climate bandwagon a year ago, Citi’s been bailed out by the feds, Morgan Stanley sold nearly a quarter of itself to Mitsubishi, and JP Morgan Chase gobbled up zombie financial outfits like Washington Mutual and Bear Stearns. Nobody’s gotten around to bailing out the climate yet. Perhaps we’re waiting for the sea level to sell high, and for the Arctic to build up liquidity.
Peter Dykstra, the former executive producer of CNN's Science, Tech and Weather Unit is currently a Public Policy Scholar at the Woodrow Wilson Center in Washington. He writes three columns for MNN: Media Mayhem on Mondays, Political Habitat on Wednesdays, and Green States on Fridays. (Yes, he writes a lot.)