Writing on the wall for oil growth?

The players in this look at the economics of climate change and opportunities for investment include Alan Greenspan, Paul Volcker, Shell CEO Ben van Beurden and Warren Buffett.

Money on the move

Jennifer A Dlouhy writes that an all-star lineup of economists, from Alan Greenspan to Paul Volcker, is endorsing a plan to combat climate change by slapping a tax on greenhouse gas emissions and then distributing the revenue to American households. All living former Federal Reserve chairs, several Nobel Prize winners and previous leaders of the president’s Council of Economic Advisers have signed on to a statement asserting that a robust, gradually rising carbon tax is “the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.”

common ground on carbon tax

Many economists have favored a carbon tax as the most effective strategy for discouraging greenhouse gas emissions and combating climate change. But the economists now are going further by stressing that the revenue should be rebated to citizens, instead of being used to reduce the deficit, fund government or pare income taxes.
“For the first time, there’s consensus among economists on what to do with the money, and the answer is to give it back to the American people,” said Ted Halstead, head of the Climate Leadership Council backing the plan.
That approach is key to ensuring it is a progressive tax that ends up helping the poor, instead of just hiking their energy bills. The premise is that periodic dividend checks could more than make up for the hike in costs for poor- and middle-income Americans.1 

Ron Bousso and Dmitry Zhdannikov of Reuters report that Royal Dutch Shell (RDSa.L) still sees abundant opportunity to make money from oil and gas in coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive, Ben van Beurden, said. The amount of carbon dioxide emitted from Shell’s operations and the products it sells rose by 2.5% between 2017 and 2018. A defiant van Beurden rejected a rising chorus from climate activists and parts of the investor community to transform radically the 112-year-old Anglo-Dutch company’s traditional business model.

Some common ground

“Despite what a lot of activists say, it is entirely legitimate to invest in oil and gas because the world demands it,” van Beurden said.
“We have no choice” but to invest in long-life projects, he added.
Shell and its peers have long insisted that switching away from oil and gas to cleaner sources of energy will take decades as demand for transport and plastics continues to grow. Investors have warned, however, that oil companies often rely on forecasts that underestimate the pace of change.
Shell plans to greenlight more than 35 new oil and gas projects by 2025, according to an investor presentation from June.2

The CBC reports that a Warren Buffett-linked company will build a $200M wind power farm in Alberta. The Rattlesnake Ridge Wind project will be undertaken by Calgary-based BHE Canada, a subsidiary of Buffett's Berkshire Hathaway Energy. The Rattlesnake Ridge Wind project will be located southwest of Medicine Hat and will produce enough energy to supply the equivalent of 79,000 homes.

chorus from climate activists

Berkshire Hathaway Energy also owns AltaLink, the regulated transmission company that supplies electricity to more than 85 per cent of the Alberta population.
BHE Canada says an unnamed large Canadian corporate partner has signed a long-term power purchase agreement for the majority of the Rattlesnake Ridge energy output.
The project is being developed by U.K.-based Renewable Energy Systems, which is building two other Alberta wind projects totalling 134.6 MW this year and has 750 MW of renewable energy installed or currently under construction in Canada.3

The “wise money” seems to be seeking long term investment in areas where carbon pricing is creating incentives to transition away from fossil fuel investment.

References

1	(2019, January 16). From Greenspan to Yellen, Economic Brain Trust Backs .... Retrieved October 15, 2019, from https://www.bloomberg.com/news/articles/2019-01-17/from-greenspan-to-yellen-economic-brain-trust-backs-carbon-tax
2	(2019, October 14). Exclusive: No choice but to invest in oil, Shell CEO says .... Retrieved October 15, 2019, from https://www.reuters.com/article/us-shell-climate-exclusive/exclusive-no-choice-but-to-invest-in-oil-shell-ceo-says-idUSKBN1WT2JL
3	(2019, October 15). Warren Buffett's firm to launch $200M wind power farm in Alberta. Retrieved October 15, 2019, from https://www.cbc.ca/news/canada/calgary/wind-farm-warren-buffett-alberta-berkshire-hathaway-calgary-1.5321345

Fear grief and lack of talk on climate change

The answer to the question posed by Canadian climate scientist Katherine Hayhoe “What's the big deal about a few degrees anyway?”

includes exploration of our possible fear and denial even as expert scientists, economists, and psychologists present their study of the effect of the climate emergency on people and our planet.

the effect of the climate emergency on people and our planet1

Annette Dubreuil explores the question of why we stop talking about climate change.

 This “spiral of silence” is itself a big problem: “People concerned about the climate avoid voicing their worry because they rarely hear others discussing the topic, and thus the spiral continues.” But collective silence is dangerous, especially for a problem as large and urgent as climate change. How do we pull out of this spiral? According to Hayhoe, we have to talk about it. But that can be hard to do. Humans are social creatures. Belonging is a fundamental and universal human need, and as a result, we often choose to conform to our group. That’s why our friends and family have far more influence on our view than do experts. Research suggests that the silencing effect is most powerful when talking to family, friends, or neighbours about obtrusive issues. So, the need for belonging makes overcoming the spiral of silence with friends and family even harder. But in fact, we have much more common ground on climate change than expected: in a research project using dialogue between people of opposing views, participants agreed on key points, and in each case there was at least one topic where the two took positions contrary to what they predicted of the other.Even when we do talk about climate change, our instinct on what to talk about is typically unhelpful. Rather than starting with the science and facts as we’re apt to do, Hayhoe suggests that we find that common ground by looking for shared values. For example, maybe you’re both parents, or maybe you both have the same hobby. Second, don’t use fear, but rather rational hope. Talk about solutions that are “practical, viable, accessible and attractive”.2

Katherine Hayhoe recently gave a TED talk titled “The most important thing you can do to fight climate change: talk about it.”

In it, she cites the Yale Program on Climate Change Communication, which finds that two-thirds of Americans never talk about climate change even though 70% believe it is a real problem.

Jennifer A Dlouhy comments that an all-star lineup of economists, from Alan Greenspan to Paul Volcker, is endorsing a plan to combat climate change

Common ground on Climate

by slapping a tax on greenhouse gas emissions and then distributing the revenue to American households.

All living former Federal Reserve chairs, several Nobel Prize winners and previous leaders of the president’s Council of Economic Advisers have signed on to a statement asserting that a robust, gradually rising carbon tax is “the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.”
“A carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future,” the 45 economists say in the opinion piece, published by the Wall Street Journal late Wednesday.3 

Olivia Goldhill asks if therapists have a duty to confront climate change denial. The research of Dr. Renee Lertzman, an expert in the psychosocial aspects of climate change communications has inspired a video. There are various psychoanalytical theories as to why we might be psychologically resistant to addressing climate change, notes philosopher and psychoanalyst Donna Orange, an adjunct professor at New York University. Social scientist Renee Lertzman, who works on the psychology of environmental communications, believes that people are suffering from “environmental melancholia.”

Freud believed that melancholia reflected a sense of loss that is not fully conscious and so cannot be fully mourned, and Lertzman argues this state describes our response to climate change. That many are aware of the effects of climate change but do little about it suggests dissociation, the Freudian concept explaining how we bury traumatic memories in the unconscious, and regression, Freud’s explanation for why people show childlike rather than adult behavior as a defense mechanism for coping with stress, argues Orange.4 

Sara E. Gorman, PhD, MPH, a public health specialist working on mental health and Jack M. Gorman, MD, former Professor and Chair of Psychiatry and Professor of Neuroscience at the Mount Sinai School of Medicine, faculty of Columbia University's Department of Psychiatry for 25 years, find there are at least two psychological reasons that encouraging people to adopt climate protection activities in their daily lives may help promote action on the larger scale.

First, denial is a response to something we fear, and we know from animal and human studies that fear induces freezing and passivity. But studies also demonstrate that giving a fearful animal or human a task that even symbolically addresses what is feared can minimize freezing and promote action. Thus, recommending tasks that we can perform in our daily lives may help us overcome our feeling that mitigating climate change is a hopeless enterprise and motivate us join the voices insisting on ending burning fossil fuels.
Second, these quotidian activities can be the basis for the formation of committees and communities that bring people together with the common goal of addressing climate change. Being part of a group with a common goal may help people overcome denial and have the courage to face the realities of climate change, however grim they may be. It may be easier and more effective for groups of people to demand that countries impose carbon taxes and spend heavily on sustainable energy than it is for individuals.5 

Being frozen in fear and presenting symptoms of grief

Climate stages of grief

at our loss are delaying the relief we will find in beginning to seek common ground with others as we speak about our concerns.

References

1	(n.d.). Global Weirding with Katharine Hayhoe - YouTube. Retrieved February 22, 2019, from https://www.youtube.com/channel/UCi6RkdaEqgRVKi3AzidF4ow
2	(n.d.). Annette Dubreuil, Author at Canada's Ecofiscal Commission. Retrieved September 7, 2019, from https://ecofiscal.ca/author/adubreuil/
3	(2019, January 16). From Greenspan to Yellen, Economic Brain Trust Backs .... Retrieved September 7, 2019, from https://www.bloomberg.com/news/articles/2019-01-17/from-greenspan-to-yellen-economic-brain-trust-backs-carbon-tax
4	(2019, February 21). Do therapists have a duty to confront climate change denial. Retrieved September 7, 2019, from https://qz.com/1554808/fighting-climate-change-with-psychoanalysis/
5	(2019, January 12). Climate Change Denial | Psychology Today. Retrieved September 7, 2019, from https://www.psychologytoday.com/us/blog/denying-the-grave/201901/climate-change-denial