8 03 2007

There was an unexpected development in Texas this month. TXU, that state’s largest utility, had been gearing up for a battle with environmentalists over its plan to build fifteen new, dirty, coal-fired power plants in Texas. It wasn’t just hardcore hippie environmentalists fighting this— the Mayor of Fort Worth and a coalition of other Texas mayors had raised over six hundred thousand dollars to try and stop these plants. Texas Governor Rick Perry, a Bush protege, to judge by his behavior, (“We’re not going to let these bureaucrats jerk us around,” he said, as he attempted to jerk everyone else around.) had moved to”fast-track” the approval process—the courts ruled that he couldn’t. The University of Texas did a study and announced that the plants would, no surprise, negatively impact air quality over most of Texas, dropping it below federal standards in places as far apart as Beaumont, Houston, and Fort Worth. The plants would spew an estimated 78 million tons of carbon and other greenhouse gases into the atmosphere annually, twice what California’s clean car initiative is expected to save. The Environmental Defense Fund had taken up the struggle, but didn’t expect to succeed in stopping the plants.

It was starting to look like a Mexican standoff in Texas, when a couple of strangers stepped into the bar and changed everything: Two large private equity firms–Kohlberg Kravis and Reilly and Texas Pacific–made TXU a buyout offer it just about couldn’t refuse. It seems that, due to investor concerns over the environmental battle shaping up, the company’s stock price was slipping, (which is a grievous sin in the religion of economics) and the private investors’ offer would reimburse TXU’s stockholders for their losses. Halleljuah, brothers and sisters, we have been saved!

KKR and TP offered an olive branch to the environmentalists, as well: they would drop eight of the eleven proposed coal plants, pledge to reduce emissions at all of TXU’s plants to 1990 levels, begin an energy-conservation program, erect wind turbines, and put its support behind carbon-emissions caps, which, if not quite a carbon tax, are at least on the way there. The Environmental Defense Fund has hailed this as a victory and dropped its opposition in the case, but the three plants that may still be built are the three dirtiest, according to Texas Public Citizen. Across the country, utilities are trying to build a hundred and fifty new coal plants before the emissions standards get raised. That would inject about another eight billion tons of carbon dioxide into the atmosphere annually…can you say, “worst-case scenario,” boys and girls? The fight will go on.

I had to wonder why, in a sunny, windy place like Texas, they were building coal-fired power plants in the first place. I learned that there is local coal in Texas—lignite, which is the youngest, most polluting grade of coal. Local coal—how green! Not! Well, digging it up and burning it now means that people millions of years in the future, when it might have become bitumous or anthracite coal, will never be tempted. We’re saving future generations from sin by burning lignite, yes, sir. Of course, they’ll have to deal with the carbon dioxide, but hey, that’s a small price to pay, isn’t it, kids?

What this story reveals to me is, on one hand, the depth of the environmental movement—with William H. Reilly, daddy Bush’s man at the EPA, coming across as one of the good guys in this story. We have Goldman-Sachs, renowned for its dizzying levels of employee compensation, helping broker the environmental deal and saying they will not fund projects that “significantly convert or degrade a critical natural habitat.” On the other hand, it shows the limited vision that still rules. Centralized power grids and centralized governments go hand in hand. Even with the best of intentions, they respond poorly to local needs, and they are not subject to local control.

At a less broad, philosophical level, we can look at TXU’s new owners’ pledge to reduce power prices by ten percent. Texas Public Citizen has pointed out that TXU’s rates are about 30% higher than those charged by co-ops and municipal utilities. BUT one of the things that makes people conserve is higher prices. That has contributed to California’s status as one of the most energy-efficient states in the country. Texas, by the way, is one of the least energy-efficient states in the country. If Texans used energy like Californians, they wouldn’t be building power plants, they’d be closing them down.

Here we are up against one of the drawbacks of our worship of economic growth—the notion that it is better for utilities to sell more and more electricity and make more and more money doing it, as if there were an infinite supply of energy and no environmental consequences for using it. California attempted to counter this with a technique called “decoupling,” in which utilities were closely regulated by the state and allowed to make a reasonable return on their investment regardless of how much electricity they sold. This was swept away by the deregulation mania of the nineties, when voodoo economics put a spell on America that resulted, for California, in the energy trainwreck that removed Gray Davis and put Arnold Schwarzenegger in charge of the state—and about the first thing Ahnuld did was effect a low -dollar settlement of the Enron lawsuit…but, I digress….

The perceived danger from global warming is great enough that some people with enough money to matter are taking it seriously, and for the foreseeable future, very unspectacular events like buying power companies and changing their policies are the ways in which we will inch back towards a planet in balance.

But what about the unforseeable future? We have a tendency to assume that things will continue to be as they have always been. Well, those money people are doing their best to get ahead of the curve on that one, too. I have recently read a document entitled, “ Impacts of Climate Change–A System Vulnerability Approach to Consider the Potential Impacts to 2050 of a Mid-Upper Greenhouse Gas Emissions Scenario.” It’s put out by the Global Business Network subdivision of The Monitor Group. GBN “specializes in helping organizations adapt and compete more effectively and more responsibly in the face of mounting uncertainty—whether it’s uncertainty about their future, the future of their industry, or the future of the world at large…. GBN’s consulting and training services focus on strategy, decision-making, innovation, visioning and alignment, and organizational and leadership development.”

The Monitor Group “ offers a portfolio of strategic consulting services to clients who seek to grow top-line revenue, shareholder value, and individual and organizational capabilities. The firm works with the world’s foremost business experts and thought leaders to help major multinational companies, governments and philanthropic institutions develop specialized capabilities in areas including competitive strategy, marketing and pricing strategy, innovation, national and regional economic competitiveness, non-profit management, technology/e-business, organizational design and development, and scenario planning.” Their best-known client is Muhamar Qaddafi, ruler of Libya, who has engaged them to modernize his country Chinese-style—economic liberalization without any letup in political repression. So Monitor Group and Global Business Network are not “good guys”–they’re typical, opportunistic neoliberals, the kind that are running (and ruining) the planet these days, so it’s important to know what they are thinking, especially on the issue of what kind of future we are all going to have together.

The white paper starts with a quote from futurist Thomas Homer-Dixon, who says, “I’m a believer in non-linear systems theory. I don’t think that a lot of these things will manifest themselves in an incremental way. I would expect, instead, that we might see some pretty sharp system shocks…. I think that the kind of crisis we might see would be a result of systems that are kind of stressed to the max already, where policymakers are trying to keep ten balls in the air simultaneously and keep all the various constituencies satisfied as best they can. And then there’s some exogenous shock on an already highly stressed system that produces a kind of overload situation.” Key phrase: “we might see some pretty sharp system shocks.”

So how does the business community propose to deal with “sharp system shocks” and still stay in business? First of all, what do they think might happen? GBN assumes the IPCC‘s “A2” scenario, which postulates “continuously increasing population. Economic development is primarily regionally oriented and per capita economic growth and technological change more fragmented and slower than other (scenarios).” Basically, a continuation of current trends. The A2 scenario posits the most extreme rises in CO2, temperature, and sea level.

This could lead, speculates the report, to such things as “Increasing temperatures and rainfall result in the reemergence of malaria in the southern U.S. Local environmentalists mount a massive PR campaign to prevent the spraying of pesticides such as DDT, leaving the government with the dilemma of how to stop the disease from spreading.” To which I would add, that a combination of rising sea level, increased likelihood of tropical disease and the reluctance of insurers to guarantee the safety of homes and businesses in hurricane-prone areas could lead to the depopulation of the southern US. And then there’s the little item of insect resistance to pesticides…

Another scenario: “A paralyzing dust storm sweeps through Cairo, exacerbating an already precarious supply of water and food. The government’s inability to respond sparks riots in the streets and creates an opportunity for the Muslim Brotherhood to step in as the de facto provider to the people, rallying them around the incompetencies of the state.” My comment: the business community would prefer a secular state to the Muslim Brotherhood/Hezbollah—but can they prevail over wind, sand, and declining rainfall?

Closer to home, the report posits: “A major earthquake in California combined with flooding along the eastern seaboard pushes a major reinsurer to the brink of bankruptcy. As a major financial crisis takes shape, the U.S. Treasury and a coalition of financial institutions devise a bailout plan.” My comment: because if millions of people can’t somehow be compensated for their losses, the US middle class will have taken a fatal hit. Any massive insurance bailout will also be hindered by the fact that most of our government’s credit has been used up paying for the war for oil in Iraq.

This one was interesting: “Climate change creates an influx of “participation science,” where amateurs become the leading purveyors of information related to the human impact of climate change., a user-generated online site that styles itself a “wikipedia of ecosystems,” becomes the “authority” on climate impacts, providing a heady mix of scientific half-truths and doomsday reporting on the local impacts of climate change. As it morphs into an organizational platform for transnational environmental activists, the site becomes one of the most frequently visited pages in the developed world.” So, they’re worried about us amateurs taking over, eh? Well, it’s a fine mess the professionals have got us into, isn’t it? Why the bleep should we trust the neoliberals any longer?

So…what does this business white paper say its wealthy clients should DO about the cascading crises that it forecasts? Learn to anticipate ’em and ride ’em out, basically—no “preventive” strategies are presented. And that’s the nut right there, folks—GBN and the Monitor Group, the cream of the economic brains at Harvard, seem to me to be agreeing here that things are spinning out of control and the best we can do is try and take a whole-systems approach to anticipating the breakdown of global—and local– order that will inevitably occur.

To quote further: “In its analysis of climate change impacts, this paper makes the assumption that the global political economy will continue to operate under more or less the same conditions as it does today—in other words, with a continued emphasis on expanding global GDP as the No. 1 economic priority, heavy reliance on fossil fuels, no radical redistribution of global wealth or power, and no major political breakthrough on how to curb global greenhouse gas (GHG) emissions. “ So—IF we can change any of these “givens”–and the more we can change, the better–there is a chance of ameliorating the bleak range of scenarios envisioned by the Harvard boys.

If we can’t change any of the current vectors of our culture, then this old gloom-and-doom voice in the wilderness isn’t a crazy pessimist—I’ve intuited what the smart money boys just made a lot of smart money figuring out.

music: Eliza Gilkyson, “Requiem”




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