Clean Green Bellarine

Trouble in fracking paradise

By Chris Nelder | August 7, 2013, 1:32 AM PDT
For complete article and graphics refer: http://www.smartplanet.com/blog/take/trouble-in-fracking-paradise/1028
The shale revolution is “a little bit overhyped,” Shell CEO Peter Voser said last week as his company announced a $2.1 billion write-down, mostly owing to the poor performance of its fracking adventures in U.S. “liquids-rich shales.” Which of its shale properties have underperformed, Shell didn’t say, but CFO Simon Henry admitted that “the production curve is less positive than we originally expected.”
Shell was a latecomer to the tight oil game. As late as 2010 it was acquiring mineral rights at inflated prices, predicting that those properties would produce 250,000 barrels per day in five years. Three years down the road, they are yielding only 50,000 barrels per day, and the company intends to sell half of its shale gas and tight oil portfolio. Shell has officially abandoned its production target of 4 million barrels per day by 2012-2018. Instead, Voser said, “we are targeting financial performance.”
Second-quarter earnings were dismal for the so-called oil supermajors. Shell, BP, Exxon Mobil, Chevron, Total SA, Statoil, and Eni SpA all reported sharply lower profits.
Production was also down nearly across the board, with only Total SA reporting an increase.
Of course, none of this would be a surprise for those who read my article from March, “Oil majors are whistling past the graveyard.”
The declining profitability and production primarily owed to lower oil prices and rising costs. AsPlatts reported in June, total capital spending for the top 100 U.S. producers in 2012 rose 18 percent year on year. Costs will be higher still this year.
Rising costs are partly due to the tight oil boom itself. Producers that invested heavily in tight oil production are struggling to maintain output against the accumulating undertow of existing wells, where output declines rapidly. Geologist David Hughes finds an average decline rate of 60 percent to 70 percent for the first year of production in new wells in the Bakken shale of North Dakota. And a new statistical analysis by Rune Likvern at The Oil Drum shows production from most Bakken wells falls by 40 percent to 65 percent in the second year.
For the Bakken field as a whole, Hughes calculated an annual production decline rate of 40 percent per year in his February report, Drill, Baby, Drill.
The problem is obvious. Decline rates that sharp make tight oil production a treadmill that speeds up a little more every year. Producers have to keep drilling more each year to simply keep output flat. That increases costs.
Other factors contribute to rising costs across the industry globally, including the ever-increasing difficulty of finding new prospects, and overall price inflation for basic commodities like cement and steel.
A good summary by Tom Fowler and Daniel Gilbert in the Wall Street Journal quotes analysts at Bernstein & Co. who see trouble ahead. “This cannot continue. . . . As long as oil prices stay flat and costs continue to rise, it will be impossible for the industry to sustain the current levels” of spending. If their spending drops off, production will too.”
Declining performance
One thing that doesn’t help the cost curve is unprofitable investments, and some of the newer tight oil plays aren’t panning out as hoped. In April, Bloomberg reported that the four biggest stakeholders in the Utica shale of Ohio were divesting, due to “disappointing” results. And the Monterey shale in California has continued to prove troublesome.
A growing consensus suggests that only the Bakken, Eagle Ford, and Permian formations will be major tight oil producers.
Prices are going higher
To be clear, smaller companies who are extremely focused on U.S. tight oil exploration are still turning profits. Tight oil production is still growing, and should continue to grow for several more years at least, just not as quickly as it has for the last several years. However, I am dubious about its production increasing from a bit over 2 million barrels a day today to 5 or 8 million barrels per day by 2020, as some have forecast.
We’ll probably drill around 19,000 horizontal wells this year, which will push production another few hundred thousand barrels per day higher. But we’re not going to raise production by a million barrels per day in a year anymore.
And it’s gonna cost ya. U.S. oil prices have bounced around $95 this year (as I predicted) but that has not been high enough for Shell to make money in tight oil and shale gas. It has not been high enough to sustain high drilling rates in the Bakken. It has not been high enough for most of the supermajors to turn a profit.
The decline in Bakken drilling could have been partly due to the glut at the Cushing, OK delivery point, which forced Bakken producers who ship by pipeline to accept a steep discount. (Bakken producers who shipped by rail directly to coastal refineries could fetch higher prices.) That is now partially relieved due to new pipeline capacity, and U.S. oil prices have risen back to global price levels. That may spur a new uptick in production as we head into the end of the year. As I explained in my last column, tight oil production supports price, it doesn’t reduce it.
But the decline in Bakken drilling can’t be wholly explained by the temporary glut at Cushing. The entire U.S. tight oil boom appears to be running into more systemic problems.
Analyst Bob Brackett of AllianceBernstein says, “the prime locations have already been drilled” in U.S. tight oil plays, and that drillers are moving on to less prospective areas. He sees the U.S. oil price benchmark WTI averaging $103 per barrel in 2015, while the European benchmark Brent rises to $113.
Rising costs across the industry, and declining profitability for the supermajors in an era of triple-digit global prices, suggest that oil prices need to be higher to maintain output. Since domestic gasoline and diesel prices, which are strongly linked to global prices, have remained stubbornly high even while U.S. oil prices were falling this year, that suggests we will likely see gasoline prices pushing toward $4.50 a gallon next year in higher-priced U.S. markets like San Francisco and New York City.
From an oil booster’s perspective, drilling 19,000 new horizontal wells (and 35,000 new wells in total) this year is a good sign. But regular folks might want to think about how much longer such a frenetic pace can go on, about the incursion of fracking into their backyards, about the environmental cost, and about the financial cost of keeping the “bonanza” going.
There is trouble in fracking paradise. A $2 billion write-down by Shell doesn’t quite spell the end of the U.S. oil boom, but it doesn’t bode well either. The “Saudi America” craze was cute, but that slogan isn’t going to make you any happier when you’re shelling out $4.50 and more for a gallon of fuel.
Want my advice? Get a more efficient vehicle. Don’t settle for less than 40 mpg. If your habits and pocketbook allow, consider an electric vehicle. And if energy independence is really your thing, then make it an EV with a rooftop solar PV system. That’s your best protection against the persistently rising cost of fuel.
My thanks to David Hughes and Rune Likvern for their contributions to this article.

Native algae biofuel could make Australia oil rich

Date: July 24, 2013

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Australia could become a major oil exporter like the Middle East if it starts farming native algae, researchers say.

University of Queensland experts say Australian algae species hold great promise in the race for cheap, efficient biofuels that can compete with fossil fuels.

UQ’s Dr Evan Stephens says microscopic algae from Australia’s fresh and saltwater environments have proven to be hardy and fast-growing.

The most promising are now being trialled at a pilot processing plant in Brisbane.

"If we devoted just 1 per cent of our land mass to algae farming, we could theoretically produce five times more oil than we currently consume," he said.

"We could potentially become an oil exporter, rather than an importer. We could be like the Middle East."

He said previous research had focused on oil-rich algae, but those species had their shortcomings.

"Usually these are not fast-growing and they are tastier to predators – like microscopic scoops of ice-cream," Dr Stephens said.

He said new technologies meant researchers could now look at a broader range of algae, including Australian species that grow well, and are resistant to predators and temperature changes.

Dr Stephens said algae fuels were some way off being commercially viable, but identifying the best species was a critical step.

"We know we can produce algae oil that is even higher quality than standard petroleum sources," he said.

The challenge now is to develop efficient production processes.

Read more: http://www.smh.com.au/national/native-algae-biofuel-could-make-australia-oil-rich-20130724-2qibs.html#ixzz2a86EZ7Xo

To view: http://video-subtitle.tedcdn.com/talk/podcast/2012G/None/JonathanTrent_2012G-low-en.mp4

Beyond Zero Emissions are seeking an experienced and passionate CEO

 
 

Beyond Zero Emissions Chief Executive Officer Wanted

The company

Beyond Zero Emissions is a not-for-profit research and communication organisation developing solutions for the implementation of climate change mitigation programmes. Their objective is to transform Australia from a fossil fuel based economy to a renewable powered clean tech economy. Sharing this research with tens of thousands of Australians via a multitude of external channels, the organisation is engaging, educating and inspiring stakeholders with real and positive solutions to climate change.
 
As one of the fastest growing NGOs in Australia, BZE are seeking an experienced and passionate CEO who can lead and consolidate the organisation through the next period of change and growth.
 
The role
Reporting to the Board of Management, your role as CEO will be to provide the collaborative leadership needed to ensure the organisation can deliver on its ambitious goals. You will work to foster an environment of courage, collaboration and accountability alongside staff and volunteers alike.
 
The key responsibilities for the role are:

  • Staff management and leadership
  • Operational management
  • Fundraising
  • External stakeholder engagement
  • Media communications

 
The requirements
As someone with proven leadership, coaching and management experience you will be thoroughly committed to, and passionate about, action on climate change and the work that the organisation undertakes. As a strong communicator you will be the focal point externally therefore it is essential that you have advanced influencing skills.
 
Further key requirements include, but are not limited to:
 

  • Excellence in organisational and project management with the ability to coach staff, manage, and develop high-performance teams, set and achieve strategic objectives.
  • P/L management, ensuring the fiscal viability and sustainability of the organisation.
  • Strong marketing, public relations, and fundraising experience with the ability to engage a wide range of stakeholders.
  • Experience developing productive, collaborative partnerships with external agencies and influential individuals.

 
The rewards
You will be given the platform to be a highly visible exponent of climate change mitigation, engaging with influential private and public stakeholders across Australia and potentially further afield. This is a fantastic opportunity for you to help shape the future of the Australian energy industry and build on the progress that this organisation has achieved to date.
 
For a confidential discussion contact Ben Cartland on 0413 555 632 or Richard Evans on 0431 414 883 or send your resume to apply@talentnation.com.au
 

UPDATE – Beyond Zero Emissions welcomes a new CEO

Posted on 26 Aug 2013
It is our pleasure to announce that after a long and exhaustive search we are finally able to announce the appointment of our new Chief Executive Officer – Dr Stephen Bygrave.
Stephen will be commencing as CEO of Beyond Zero Emissions on Monday the 9th of September 2013.
Stephen has worked on climate change, renewable energy, energy efficiency and sustainable transport for the past 20 years, primarily in policy and research positions at a local, national and international level.
Dr Stephen Bygrave

To Bee or Not to Bee – a must read.

Saturday July 13 at 1 pm on CBC-TV

Related Video

bee

TO BEE OR NOT TO BEE

Watch this film online.
45:05 min
Bees are all around us. And while some might consider them no more than a nuisance, the role that bees play in nature simply cannot be overstated – they pollinate many of the food crops that we depend on. A world without bees would be unrecognizable since they also pollinate many of the plants and trees in our gardens, forests and meadows.
When the news broke three and a half years ago that honeybee populations around the globe were declining at an alarming rate, it was no surprise that scientists took notice. What was happening to the bees, and could they be saved?
These are but two of the questions To Bee or Not To Bee explores, taking us headlong into a world of nature, science and big business.
Our story begins in 2006, when Pennsylvania beekeeper David Hackenburg went public when over half of his honeybee hives died from a mysterious disease. That disease soon had a name – Colony Collapse Disorder, and it rapidly led to record colony losses for beekeepers across the United States. At the same time, in other parts of the world, domesticated honeybees and wild bee populations were sickening and dying as well. A number of factors seemed to be triggering those die-offs. The search for a single cause and its cure has become more and more desperate over time.
As the problem becomes more severe, scientists and beekeepers in Europe and North America work tirelessly to find the cause of these deadly declines: is it genetic, a virus or pollution, or some combination of them? Today beekeepers are hanging on by a thread, food supplies are threatened, and the biodiversity of the planet itself has been endangered.

Could bees be an early warning sign of a larger problem with our ecology? Are they the canary in the coal mine for the health of Planet Earth?
Like many scientific mysteries, the answers are rarely found in one place. To Bee or Not To Bee takes viewers to France, Germany, Canada and the U.S.A., and into laboratories, bee yards, landfills, almond orchards and breeding grounds, all in search of clues.
The picture that emerges is at once hopeful and disturbing. The stresses bees face today are numerous – from the use of chemical pesticides, to viruses, to the loss of natural bee habitats. Although, these enterprising insects are resilient and adaptable, will they be able to change fast enough? Will science find solutions to the problems they face?
To Bee or Not to Bee is directed by Mark Johnston and produced by Natalie Dubois and Christine Le Goff, for Galafilm Productions.

Economic growth and conservation – Garnaut reconciles

 

Extract from: http://theconversation.com/garnaut-reconciles-economic-growth-and-conservation-15269?

 
 

Ross Garnaut warned against over-playing the dangers of economic growth damaging the ecosystems AAP/Julian Smith

Economist Ross Garnaut has warned against over-playing the dangers of economic growth damaging the ecosystems that are important to life.
Current patterns of economic growth had those effects, he said, but “economic growth is not inherently in conflict with conservation of the natural environment”.
Garnaut, who did much of the groundwork for Labor’s carbon pricing, was launching a booklet of essays titled “Placing global change on the Australian election agenda”.
It has been issued by Australia21, a non-profit group, chaired by a former secretary of the defence department, Paul Barratt, that promotes research on big issues.
The aim of the booklet is to “stimulate a constructive discussion between voters and political aspirants from all parties about the kind of Australia we will leave to our children in an increasingly hazardous, globalised and resource-constrained world”.
The essays have a heavy emphasis on climate change but also cover such topics as defence, the global financial future and the threat from chemical and antibiotic overuse.
Garnaut said that increases in material wellbeing (“economic growth”) derived from increases in population, in the amount of capital each worker used and in productivity.
While an inexorable increase in population was by definition in conflict with finite natural resources, experience showed that rising living standards reduced fertility, in a process that was stronger “than the edicts of imans as well as popes”.
Increases in capital per worker could be resource-saving or resource-using – and he suggested China would provide an example of the former, Garnaut said.
The same went for productivity growth which came from technological change – much technological improvement resulted in less pressure on natural systems per unit of economic value.
“When we see economic growth in this light, we do not need to make enemies of the whole of the developing world’s people as they seek higher standards of living.
“When we see economic growth in this light, we recognise that the important thing is to make sure that we put in place policies that encourage resource-conserving and discourage resource-using capital intensification and technological change”.
That was what Australia had done in a small but so far effective way with its carbon pricing and associated clean energy policies.
He conceded that the linking of the Australian price to the European Union from 2015 would probably lead to lower carbon prices for a while and diminished pressure for the use of carbon-conserving investments and technologies.
“However, the pressure of the carbon pricing causes firms to consider the likelihood that European prices will rise in future, and to think twice about the carbon intensity of future output from investments that they are making now”.
In a shot at the opposition, which is pledged to remove the carbon tax, Garnaut said: “To expect Australians to put the welfare of future Australians near the top of their priorities may be too much to ask as we live through what I hope are the later days of the great Australian complacency.
“But surely it is not too much to expect that we will not make things worse, by retreating on the modest steps forward that we have made in addressing one of the great challenges facing our people”.
In the preface to the booklet Barratt and editor Bob Douglas, former director of the National Centre for Epidemiology and Population Health at ANU, have framed a dozen sets of questions that they hope “become part of the political discourse in the lead up to the election of our next government”.
If you want to grill your local candidates during this election, here are some of the questions. (Good luck with them.)
GREENHOUSE GASES. Do you believe we should radically curtail energy production from fossil fuels? If so, over what timeframe? Should we also curtail our mining and export of fossil fuels to other countries?
ECONOMIC MANAGEMENT AND GROWTH. Do we need to develop a more “steady state” approach to economic management, in which we can maintain full employment without rapid growth in the demands placed upon our resources and the biosphere?
DEFENCE POLICY. Are we spending enough on defence for the Australian Defence Force to be able to meet your expectations? Are you concerned about the prospect of strategic competition emerging between China and the US, and how should Australia respond?
FOOD FOR OUR FUTURE. What are the prospects of Australia feeding itself in the context of rising temperatures, declining extent and health of croplands, and rising food prices and international famine?
OUR DEPENDENCY ON OIL Should the government adopt policies to ensure we have specified stock levels of fuels and lubricants in-country?
PROSPECTS FOR THE GLOBAL ECONOMY What is the likelihood of another global financial crisis? What should we do to prepare for such an eventuality?
PROTECTION AGAINST TOXINS AND ANTIBIOTIC RESISTANCE. What role should government play in protecting the community against exposure to toxins and deterioration in antibiotic sensitivity?
THE VALUATION OF SERVICES PROVIDED BY ECOSYSTEMS. Should we include in our evaluation of proposed developments or changed land use the economic value of the services provided by local ecosystems to human communities and to industry?
ECOLOGICAL FOOTPRINTS AND EQUITY. How can we reduce our per capita footprint in a way that both assists developing countries and makes limited resources more equitably available to all Australians?
ENVIRONMENTAL REFUGEES. How should we best integrate provision for refugees from the results of climate change into our immigration policy?
DOMESTIC TRAVEL. Do you think that the rising demand for rapid movement between our major cities can be met into the indefinite future by increasing civil aviation capacity?
RESPONDING TO THE NEEDS OF THE COMING GENERATION. Is Australia preparing its younger population adequately for the likely risks ahead as climate change and resource scarcity challenge the conventional wisdom of endless economic growth?

10 REASONS EARTHSHIPS ARE AWESOME.

Earthships are 100% sustainable homes that are both cheap to build and awesome to live in.
They offer amenities like no other sustainable building style you have come across.
For the reasons that follow, I believe Earthships can actually change the world. See for yourself!
brigthon-earthship-blog

CLICK IMAGE BELOW FOR VIDEO
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1) SUSTAINABLE DOES NOT MEAN PRIMITIVE

When people hear about sustainable, off-the-grid living, they usually picture primitive homes divorced from the comforts of the 21st century. And rightfully so, as most sustainable solutions proposed until now have fit that description. Earthships, however, offer all of the comforts of modern homes and more. I’ll let these pictures do the talking…
earthship2 10 Reasons Why EarthShips Are F!#%ing Awesome
 10 Reasons Why EarthShips Are F!#%ing Awesome
 10 Reasons Why EarthShips Are F!#%ing Awesome
 10 Reasons Why EarthShips Are F!#%ing Awesome
inline1 earthship 10 Reasons Why EarthShips Are F!#%ing Awesome
PHOENIXBATH 625x416 10 Reasons Why EarthShips Are F!#%ing Awesome
 10 Reasons Why EarthShips Are F!#%ing Awesome
phoca thumb l living phoenix plants web 625x416 10 Reasons Why EarthShips Are F!#%ing Awesome
Brighton Earthship Picture1 625x833 10 Reasons Why EarthShips Are F!#%ing Awesome
earthship3 10 Reasons Why EarthShips Are F!#%ing Awesome

2) FREE FOOD

Each Earthship is outfitted with one or two greenhouses that grow crops year-round, no matter the climate. This means you can feed yourself with only the plants growing inside of your house. You can also choose to build a fish pond and/or chicken coop into your Earthship for a constant source of meat and eggs.
phoenix blackwater planters1 625x468 10 Reasons Why EarthShips Are F!#%ing Awesome
earthships 7 960x6401 625x416 10 Reasons Why EarthShips Are F!#%ing Awesome
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3) BRILLIANT WATER RECYCLING

Even the most arid of climates can provide enough water for daily use through only a rain-harvesting system. The entire roof of the Earthship funnels rain water to a cistern, which then pumps it to sinks and showers when required. That used ‘grey water’ is then pumped into the greenhouse to water the plants. After being cleaned by the plants, the water is pumped up into the bathrooms for use in the toilets. After being flushed, the now ‘black water’ is pumped to the exterior garden to give nutrients to non-edible plants.
earthship2 625x377 10 Reasons Why EarthShips Are F!#%ing Awesome

4) WARMTH & SHELTER

The most brilliant piece of engineering in the Earthship is their ability to sustain comfortable temperatures year round. Even in freezing cold or blistering hot climates, Earthships constantly hover around 70° Fahrenheight (22° Celsius).
This phenomenon results from the solar heat being absorbed and stored by ‘thermal mass’ — or tires filled with dirt, which make up the structure of the Earthship. The thermal mass acts as a heat sink, releasing or absorbing heat it when the interior cools and heats up, respectively.
The large greenhouse windows at the front of the house always face south to allow the sun to heat up the thermal mass throughout the daytime.
 10 Reasons Why EarthShips Are F!#%ing Awesome

5) ENERGY

Solar panels on the roof and optional wind turbines provide the Earthship with all of the power it needs. As long as you’re not greedily chewing through electricity like a typical first-world human, you’ll never be short of power.
 10 Reasons Why EarthShips Are F!#%ing Awesome

6) FREEDOM

With all of your basic needs provided for and NO bills each month, you’re free! You don’t have to work a job you hate just to survive. So you can focus your time on doing what you love, and bettering the world around you.
Imagine if the entire world was able to focus on doing extraordinary things instead of just making enough to get by. Imagine if even 10% of the world could do this. What would change?

7) EASY TO BUILD

At a recent Earthship conference in Toronto, Canada, a married couple in their forties shared about how they built a 3-story Earthship by themselves in 3 months. They had never built anything before in their lives and were able to build an Earthship with only the printed plans. They did not hire any help, nor did they use expensive equipment to make the job easier.
If one man and one woman can do this in 3 months, anyone can do it.

8) CHEAP

Earthships are exorbitantly cheaper than conventional houses. The most basic Earthships cost as little as $7000 (The Simple Survival model) with the most glamorous models costing $70,000 and up, depending on how flashy you want to be with your decorating.
With these cost options, Earthships can fit the needs of everyone — from the least privileged to the most worldly.

9) MADE OF RECYCLED MATERIALS

Much of the materials used to build Earthships are recycled. For starters, the structure is built with used tires filled with dirt:
Earthship tyre walls1 625x416 10 Reasons Why EarthShips Are F!#%ing Awesome
 10 Reasons Why EarthShips Are F!#%ing AwesomeIf there’s one thing we’re not short of on Earth, it’s used tires! There are tire dumps like the one pictured here in every country in the world. There are even places that will pay you by the tire to take them away.
The walls (above the tires) are created by placing plastic and glass bottles in concrete. When the Earthship team was in Haiti after the earthquake, they employed local kids to both clean up the streets and provide all of the bottles required for building their Earthship. Plus, they look pretty sexy.
 10 Reasons Why EarthShips Are F!#%ing Awesome

10) THINK DIFFERENT

The most powerful thing Earthships do is force people to think differently about how we live. If housing can be this awesome, and be beneficial to the environment, then what else can we change? What else can become more simple, cheaper and better at the same time?
It’s time for us to re-think much of what we consider normal.
Source: http://valhallamovement.com/

Toxic Water: Across Much of China, Huge Harvests Irrigated with Industrial and Agricultural Runoff

Author: Nadya IvanovaNadya Ivanova, a Bulgaria native, is a Chicago-based reporter for Circle of Blue. She co-writes The Stream, a daily digest of international water news trends. Interests: Europe, China, Environmental Policy, International Security.

FRIDAY, 18 JANUARY 2013 15:03

The dirty truth about the world’s largest grain producer.
water pollution contamination trash garbage Yellow River Lanzhou China

Photo © Aaron Jaffe / Circle of Blue

Polluted water and trash mingle on the bank of the Yellow River in Lanzhou, China. Click image to enlarge slideshow.
JINAN, Shandong — The horizon gleams with a golden hue from the wheat fields that spread in all directions here in Shandong, a prime food-growing province on the lower reaches of the Yellow River. As hundreds of farmers spread the wheat like massive carpets to dry on country roads, combine machines are busy harvesting the grain. The same afternoon that the wheat harvest is finished, farmers will already be planting corn and other crops. This is how China feeds 1.4 billion citizens and millions of livestock.
“There’s no water source except for this dirty water. We have to use it.” – Farmer in Shandong Province
The seeds of the economic miracle that have lifted China to the world’s second-largest economy are in the farm fields and tumbledown villages that each year grow the nearly 600 million metric tons of food that sustain public trust in the country’s dramatic transition.
Yet the ample harvest also comes with significant public health risks, as a farmer here explains.
Damp with sweat, dust, and chaff, he pulls a plastic hose into a water pump that is powered by a truck with a belt-drive. The moment the engines roar, the ingenious makeshift machine fills the hose with turbid water from the nearby canal where a pharmaceutical factory has just dumped its rancid effluent.
“There’s no water source except for this dirty water,” the farmer says. “We have to use it.”
POLLUTION MOVES WEST
Shigong, a 50-year-old farmer from the village of Tizi, has spent his lifetime tilling the craggy desert hills that for centuries have been the only lifeline in dry Gansu Province. In this remote area of western China, the farmer’s life is guided by the whims of the seasons, the flow of the nearby Yellow River, and the fruits of the land.
The rice paddies that feed Shigong’s home are giving an unmistakable sign of change. Salt and alkaline from a nearby chemical factory, as well as fertilizer overuse, have tainted the land and cut productivity.
Rice is now the only crop that survives here in Tizi, and even that is struggling: one mu (roughly 0.07 hectares, 0.17 acres) produces about half a metric ton of rice annually, which is only half of what the land yielded less than a decade ago.
“Water pollution affects our production very badly,” he says, looking at the nearby hills covered with salt. “The salt and alkaline are moving to the land. In two to three years, all the land will be wasted.”
Shigong’s plight is shared by other local farmers whose lands and lives are roiled by water shortages and pollution. In this arid corner of northwestern China – where rainfall measures in mere millimeters – small plots of maize and wheat squeeze between barren hills that are as dry as desert slopes. Rice paddies dot the banks of the Yellow River and its tributaries. Seen from above, the farms look like little oases surrounded by a barren wasteland.
But the landscape is steadily changing.
Since 2000, when China launched the “Go West” program to encourage industrial development and job growth in 11 of its western provinces and autonomous regions, Gansu’s industries and income levels have been rising. The development has turned Gansu and its neighboring provinces from primarily agricultural societies to ones that are putting more attention on developing heavy industry.
In an attempt to expand coal production westward, for example, China plans to open 15 large coal bases by 2015, mostly in Inner Mongolia, Ningxia, Shaanxi, and Shanxi.
Despite better regulation, experts worry that, as China’s development moves west, it will transfer its pollution as well.
“Pollution is getting worse and worse here. Many heavy metal companies and plants have moved to Gansu from the east, “ Su Yongzhong, an expert at the Gansu Academy of Agricultural Sciences, told Circle of Blue. “These factories are producing dirty products. The trend is already there. We can see it happening.”
When the water turned black last month, he adds, most of the crop died after being irrigated with it — and what did not wither was sent to the market.
The farmer’s plight underlies a dirty truth about China’s fast development: the nation’s rivers, lakes, and falling water tables are enduring deficits of clean water that often force farmers to grow food using water that is tainted with heavy metals, organic pollutants, and nitrogen. Much of China’s water is so contaminated that it should not even be touched, yet tremendous amounts of the grains, vegetables, and fruits that are served in homes and restaurants, as well as textiles that are sold in markets, are irrigated with untreated industrial wastewater.
Contaminated Food
Crash programs to build highways, railways, airports, modern manufacturing bases, and other equipment have distinguished China for a generation. The country has not, however, launched any similarly comprehensive or sustained programs to clean up its filthy water, though reforms may be on the horizon.
Water and soil pollution in China are so prevalent that the nation’s farm productivity, its economy, and the people’s health are at risk as modernization, urbanization, and food demand are steadily increasing.
Furthermore, China’s Ministry of Land and Resources estimates that heavy metal pollution destroys 10 million metric tons of grain and contaminates another 12 million metric tons annually, incurring billions of dollars in direct economic losses each year as China struggles to satisfy the evermore-sophisticated diets of its growing population. With more and more Chinese moving into the middle and upper classes each year, so increases their ability to afford meat products like beef and pork, which are extremely water intensive as they must be fed substantial amounts of grains.
Meanwhile, as much as 10 percent of China’s rice, the country’s staple food, may be tainted by poisonous cadmium, a heavy metal that is discharged in mining and industrial sewage, according to scientists at Nanjing Agricultural University.
Food safety is a deep concern among Chinese citizens, a matter of national significance as old as the country itself. After years of high-profile scares — deadly melamine milk, recycled “gutter oil,” fake beef, and exploding watermelons, among others — food safety scandals are producing public ridicule and ire in a political system that has vowed to serve the people. As the public has called for the country to dramatically strengthen its environmental safeguards, authorities have begun setting nationally significant standards for water, soil, and food to curb the grimy side effects of sizzling economic growth.
“Crop security is the number one problem in the nation,” Fan Mingyuan, an expert at the Water Resources Research Institute of Shandong Province, told Circle of Blue. “It’s a national security problem.”
Agriculture is a vital industry in China, employing more than 300 million farmers and feeding a rapidly growing nation, still haunted by memories of severe famine and poverty during the 1950s and ’60s. And as China ranks among the global firsts in output of rice, wheat, potatoes, tea, cotton, meat, and other crops, the security of its food supplies could have significant global implications as well.
Soil and Water Pollution
While years of food scandals have focused public attention on factories and markets, few have looked at the source of the food chain — soil and water.
For instance, one-fifth of the Yellow River, northern China’s lifeline, should not be used for drinking, energy production, or irrigation; about 40 percent of the Hai River, which supports major food-producing areas in the northeast, is considered unusable. In fact, nearly 15 percent of China’s major rivers are not fit for any use, and more than half of the groundwater nationwide is categorized as “polluted” or “extremely polluted,” according to government statistics.
China Yellow River drinking water pollution contamination purification Liang Jia Wang groundwater

Photo © Aaron Jaffe / Circle of Blue

The Yellow River flows around a water-intake pipe to a purification building that has fallen into disrepair, forcing the residents of Liang Jia Wang, one of China’s many “cancer villages,” to drink water straight from the dirty river. Nearly 15 percent of China’s major rivers are not fit for any use, and more than half of the groundwater is labeled “polluted” or “extremely polluted.” Click image to enlarge slideshow.
Pollution is such a major driver of water scarcity in China that experts have given it a special term, shui zhi xing que shui, or literally “water-quality-driven water shortage.”
Moreover, China’s pollution hotspots are occurring in the places where economic growth is the highest and water resources are under the most stress — China’s dry northern breadbaskets and its biggest manufacturing hubs in the south and east.
“Farmers won’t eat what they produce… It’s not just about water safety; it’s about food safety as well.”  – Hu Kanping Chinese Ecological Civilization Research Promotion Association
Nearly 10 million of China’s 120 million hectares (25 million of 295 million acres) of cultivated land have been polluted, and more than 133,000 hectares (330,000 acres) have been infiltrated or destroyed by solid wastes, according to official statistics. Furthermore, half the soil in southern manufacturing cities is reportedly contaminated with cadmium, arsenic, mercury, petroleum, and organic matter.
“I have seen farmers in Hebei use contaminated water, because there’s nothing else to use. Farmers won’t eat what they produce. They have fields for themselves and fields for the market,” said Hu Kanping of the non-profit Chinese Ecological Civilization Research and Promotion Association, based in Beijing. “This is a very serious problem, not just for farmers but also for everyone else. It’s not just about water safety; it’s about food safety as well.”
Non-point Source Pollution
Spills and other pollution incidents from industrial and sewage treatment plants in recent years have drawn attention to some of China’s dirtiest rivers and lakes. Protests calling for dramatically strengthened environmental safeguards in China are now occurring with more frequency, signaling an awakening of both the public and government’s conscience about the environment.
But few realize that more than half of China’s water pollution comes from agriculture itself: fertilizers, pesticides, and livestock waste that are carried into lakes, rivers, wetlands, coastal waters, and underground aquifers by rainfall and snowmelt.
fertilizer agricultural runoff water contamination algae irrigation canal liaoning china

Photo © Adam Dean for Circle of Blue

High nutrient levels from fertilizer runoff produce mats of thick algae in a main-stem irrigation canal in Liaoning Province.Click image to enlarge slideshow.
This runoff is called agricultural non-point source pollution, because it cannot be traced back to one source, like pollution from a factory can be. Agricultural non-point source pollution is the dominant source of water pollution in China, and it also serves to increase soil erosion and reduce the productivity of the land. This kind of pollution has proved difficult to control globally, and most technical measures in China are focused on prevention rather than treatment.
NGO INNOVATION
While young people around the world are saving up to buy the latest laptops and tablets, recent college graduates Tang He and Dai Xiaoyan are taking on heavy metal pollution in their native Hunan Province. Zinc and indium factories – for new display technologies and other uses – are among the biggest sources of pollution in the Xiang River and have tainted miles of farmland throughout the province.
But Tang He and Dai Xiaoyan, who make up almost the entire staff of the toddling environmental NGO Green Hunan, are pushing the boundaries of open information about water pollution in Hunan’s government.
“When we started this kind of work several years ago, the local environmental protection bureaus were quite surprised that there were people monitoring their work,” Tang He told Circle of Blue. “Many of them didn’t even know that they had to make the pollution data public.”
In a country notorious for its weak local enforcement of pollution control regulations, Green Hunan innovates at the grassroots level by using water samples, fresh data, and existing laws to pressure local governments into releasing water pollution information. They have also built a volunteer network of active citizens, scientists, universities, policymakers, and environmental lawyers to monitor and publicize information about pollution in the Xiang River and its tributaries.
Activism about the environment is growing in China, as its fledgling green movement is taking root in some of the most remote regions of the country. For example, Green Hunan – advised by Liu Shuai, a progressive official at the Hunan People’s Congress Committee who promotes public and media monitoring of local governments – is currently collaborating with scores of other environmental organizations throughout China on a tool to rank Chinese municipal governments and some companies based on how compliant they are in releasing environmental information.
In China, where guanxi – the art of connections and relationships – makes everything easier, environmental NGOs are also learning to build trust with local authorities.
“We avoid being an opponent of the government. Instead, we make an objective assessment and recommendations on their performance, based on real data that we collect,” Tang He said.
Among China’s influential environmentalists is Ma Jun, a 44-year-old former journalist. Now Ma is the head of the Institute of Public and Environment Affairs, which compiled China’s first open-source online database of water and air pollution records and in 2012 prompted multinational giants like Apple to confront the pollution problems created by their Chinese suppliers.
“Environmental NGOs are the oldest NGOs in China. In the beginning, they were very idealistic and passionate; they thought that they could achieve a lot with only very limited knowledge,” Tang He said. “Before, when we talked about non-governmental organizations, people thought that they are anti-government. Now people have a better understanding of what NGOs are and the change that they can make.”
Meanwhile, in Xiangtan, a small city that is an hour-long drive from Changsha, Hunan’s provincial capital, the local environmental protection bureau has created an NGO to monitor metal smelters in a nearby factory district
“We have a very interesting agreement with the city government,” said Mao Jianwei, a Xiangtan volunteer. “If we find water pollution within the city, we will tell the local authorities about it under the table, and they will deal with it internally, without informing the provincial authorities. But if we find a problem outside the city, we will inform the provincial bureau. This helps the local authorities save face and deal with the issue themselves.”
The cruel irony is that China has become the largest producer and consumer of fertilizers and pesticides in the world, according to China’sJournal of Arid Land. Likewise, giant pig and poultry farms have also developed rapidly to satisfy the nation’s growing demand for meat: in 2002, the total livestock waste was more than four times greater than the production of industrial organic pollutants.
In fact, animals produce about 90 percent of the organic pollutants and about half of the nitrogen in China’s water, according to Wang Dong, a senior expert at the Chinese Academy for Environmental Planning.
“China is developing too rapidly,” Wang told Circle of Blue. “It took Western countries 100 and more years to develop to this level — it took China 30 years. Our population is too big, and certain problems cannot be avoided when you have such big population.”
Effects on the Economy
Just how much damage China’s soil and water pollution has brought to people’s health, the land’s productivity, and the state’s economy is not completely clear, say authorities both inside and outside the country.
China’s attempt to introduce a “green GDP” in 2004 put the cost of the environment at about 3 percent of economic growth. According to the World Bank, the costs of environmental degradation and resource depletion in China approached 10 percent of GDP over the past decade — of which water pollution accounted for 2.1 percent and soil degradation for 1.1 percent — though this estimate only measured the impact on human health.
Central government authorities have acknowledged industry, agriculture, and cities as sources of pollution and have given a much bigger role to environmental regulations in China’s development plan through 2015. Recent reforms have introduced stricter targets for reducing major pollutants, and with promising results.
The central and provincial governments have invested more in cleaning up rivers and lakes and in reusing recycled water in homes, industries, and even on farm fields. They are also using award payments to persuade local authorities and businesses to take action on environmental programs and other initiatives, such as subsidizing biogas equipment in pig farms and spreading the residual on fields as a more natural alternative to synthetic fertilizers.
Eastern Chinese cities are also clamping down on where businesses can build pig farms, manufacturing factories, and power plants, in hopes of keeping nearby water bodies clean.
Meanwhile, foreign companies are rushing to cash in on cleaning up China’s pollution, as the Chinese government plans to invest $US 63 billion in the water-treatment sector during the current 12th Five-Year Plan period (2011-2015). Though investment in urban wastewater treatment is becoming more common, there is also increasing interest from the private sector in investing in solutions to rural pollution.
As a sign of new attitudes to food, fledgling companies offer to provide an organic certification, printing up organic or “green” food labels — for a fee. Even though agriculture officials promote organic, “green” food, and “no-harm” programs to reduce the use of harmful chemicals in food, there are still many reports of cheating and violations.
Economy & Environment At Odds
Because citizens are calling more attention to the links between pollution and deteriorating public health, independent authorities note that the increased activity is elevating the environment — and water issues in particular — to a much higher political priority in China.
cancer village china water pollution contamination yellow river Liang Jia Wang hospitalization life expectancy

Photo © Aaron Jaffe / Circle of Blue

With no access to water aside from that of the contaminated Yellow River, residents of Liang Jia Wang, one of China’s many “cancer villages,” have noted the alarmingly high cancer rates in the area. The local government posts weekly updates about the hospitalized residents in the village, where the average life expectancy is around 40 to 45 years. Click image to enlarge slideshow.
But controlling agricultural pollution will prove difficult, given that China has such an eclectic mix of farmscapes — from rural households to collective units to those that are state-owned, —since the country’s economic opening in 1978 when many farmers divided up their farmland. Not to mention that, in a country notorious for its weak local enforcement of environmental regulations, central efforts are often at odds with the economic interests of local businesses, governments, and farms.
“It took Western countries 100 and more years to develop to this level — it took China 30 years.”  –Wang Dong, senior expert Chinese Academy for Environmental Planning
China’s overwhelming local protectionism of polluting industries unveils a tight alliance between officials and local industries, often triggered by the pressure on local authorities to show progress in developing the economy. In the years of state-run market economics, local governments prioritize industrial growth, often at the expense of environmental regulation.
As environmental problems persist, social frustration builds up over the lack of effective alternative channels for complaint, the weak local enforcement of environmental laws, and the lack of accountability by the private sector. Many local protests against pollution incidents have thus focused on the strong state-corporate ties that hamper real reforms on the ground.
“All the environmental problems in China are political problems,” Hu Kanping told Circle of Blue. “And water pollution is more difficult to address than air pollution. In many areas, there’s resistance from farmers and local governments to address this problem, because it will affect their irrigation; it will raise their water fees and slow local GDP growth.”
Photos by Adam Dean, as well as Circle of Blue reporters Aaron Jaffe and and Keith Schneider.
 
Choke Point: China is an on-going Circle of Blue series, produced in partnership with the Wilson Center’s China Environment Forum. Through frontline reporting, the project finds new and powerful evidence of a ruinous confrontation between water, food, and energy that is visible across China and is virtually certain to grow more dire over the next decade. Choke Point: China is part of Global Choke Point, which is uncovering new data and strategic narratives about water, food, and energy in the world’s most vulnerable regions.
water pollution contamination china xian shanxi province pesticide plastic bottle irrigation canal agriculture

Photo © Keith Schneider / Circle of Blue   Trash and other debris, including empty plastic pesticide containers, foul an irrigation canal near Xian in Shanxi Province.                            Click image to enlarge slideshow.

None of the worlds top industries would be profitable if they paid for the natural capital they use

Extract from: http://grist.org/author/david-roberts/

The notion of “externalities” has become familiar in environmental circles. It refers to costs imposed by businesses that are not paid for by those businesses. For instance, industrial processes can put pollutants in the air that increase public health costs, but the public, not the polluting businesses, picks up the tab. In this way, businesses privatize profits and publicize costs.
While the notion is incredibly useful, especially in folding ecological concerns into economics, I’ve always had my reservations about it. Environmentalists these days love speaking in the language of economics — it makes them sound Serious — but I worry that wrapping this notion in a bloodless technical term tends to have a narcotizing effect. It brings to mind incrementalism: boost a few taxes here, tighten a regulation there, and the industrial juggernaut can keep right on chugging. However, if we take the idea seriously, not just as an accounting phenomenon but as a deep description of current human practices, its implications are positively revolutionary.
To see what I mean, check out a recent report [PDF] done by environmental consultancy Trucost on behalf of The Economics of Ecosystems and Biodiversity (TEEB) program sponsored by United Nations Environmental Program. TEEB asked Trucost to tally up the total “unpriced natural capital” consumed by the world’s top industrial sectors. (“Natural capital” refers to ecological materials and services like, say, clean water or a stable atmosphere; “unpriced” means that businesses don’t pay to consume them.)
It’s a huge task; obviously, doing it required a specific methodology that built in a series of assumptions. (Plenty of details in the report.) But it serves as an important signpost pointing the way to the truth about externalities.
Here’s how those costs break down:

The majority of unpriced natural capital costs are from greenhouse gas emissions (38%), followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%), and waste (1%).

So how much is that costing us? Trucost’s headline results are fairly stunning.
First, the total unpriced natural capital consumed by the more than 1,000 “global primary production and primary processing region-sectors” amounts to $7.3 trillion a year — 13 percent of 2009 global GDP.
(A “region-sector” is a particular industry in a particular region — say, wheat farming in East Asia.)
Second, surprising no one, coal is the enemy of the human race. Trucost compiled rankings, both of the top environmental impacts and of the top industrial culprits.
Here are the top five biggest environmental impacts and the region-sectors responsible for them:
UNEP: top five environmental impactsUNEP
Click to embiggen.
The biggest single environmental cost? Greenhouse gases from coal burning in China. The fifth biggest? Greenhouse gases from coal burning in North America. (This also shows what an unholy nightmare deforestation in South America is.)
Now, here are the top five industrial sectors ranked by total ecological damages imposed:
UNEP: top five industrial sectors by impactUNEP
Click to embiggen.
It’s coal again! This time North American coal is up at number three.
Trucost’s third big finding is the coup de grace. Of the top 20 region-sectors ranked by environmental impacts, none would be profitable if environmental costs were fully integrated. Ponder that for a moment: None of the world’s top industrial sectors would be profitable if they were paying their full freight. Zero.
That amounts to an global industrial system built on sleight of hand. As Paul Hawken likes to put it, we are stealing the future, selling it in the present, and calling it GDP.
This gets back to what I was saying at the top. The notion of “externalities” is so technical, such an economist’s term. Got a few unfortunate side effects, so just move some numbers from Column A to Column B, right?
But the UNEP report makes clear that what’s going on today is more than a few accounting oversights here and there. The distance between today’s industrial systems and truly sustainable industrial systems — systems that do not spend down stored natural capital but instead integrate into current energy and material flows — is not one of degree, but one of kind. What’s needed is not just better accounting but a new global industrial system, a new way of providing for human wellbeing, and fast. That means a revolution.

Victory at Hand for the Climate Movement..

Paul Gilding – March 20 2013

Paul is an independent writer, advisor and advocate for action on climate change and sustainability. An activist and social entrepreneur for 35 years, his personal mission and purpose is to lead, inspire and motivate action globally on the transition of society and the economy to sustainability. He pursues this purpose across all sectors, working around the world with individuals, businesses, NGOs, entrepreneurs, academia and government.

Paul Gilding

There are signs the climate movement could be on the verge of a remarkable and surprising victory.  If we read the current context correctly, and if the movement can adjust its strategy to capture the opportunity presented, it could usher in the fastest and most dramatic economic transformation in history. This would include the removal of the oil, coal and gas industries from the economy in just a few decades and their replacement with new industries and, for the most part, entirely new companies. It would be the greatest transfer of wealth and power between industries and countries the world has ever seen.
To understand this incredible potential we first have to step back and understand the unique structure of this social change movement, which may rank among the most influential in history.  It is simplistic to characterise it as an alliance of grass roots organisations and activists pitched against a rich and well connected adversary. While that is part of the story, it is more accurately understood as an idea whose tentacles reach into every tier of government, the world’s largest companies and financial institutions, and throughout the academic and science communities.
Because of this, it is winning the battle from within: Its core arguments and ideas are clearly right; being endorsed by the world’s top science bodies and any significant organisation that has examined them.
Far from being at society’s margins it has the support, to various degrees, of virtually all governments, and many of the world’s most powerful political leaders, including the heads of state of the USA, China and other leading economies. It counts the CEO’s of many global companies and many of the world’s wealthiest people as active supporters – who between them direct hundreds of billions of dollars of capital every year towards practical climate action. And of course, this comes on top of one of the most global, best funded, broadly based and bottom up community campaigns we have ever seen.
That is the reality of the climate movement – it is massive, global, powerful, and on the right side of history.
So why, many ask, has it so far not succeeded in its objective of reducing CO2 emissions? Much has been written on this topic but most of it is wrong. It is simply an incredibly big job to turn on its head the global economy’s underpinning energy system. And so it has taken a while. Considering how long other great social movements took to have an impact – such as equality for women or the end of slavery and civil rights movements – then what’s surprising is not that the climate movement hasn’t yet succeeded. What’s surprising is how far its come and how deeply it has become embedded in such a short time.
And now is the moment when it’s greatest success might be about to be realised – and just in time.
We are at the most important moment in this movement’s history – in the midst of two simultaneous tipping points that create the opportunity, if we respond correctly, to win – eliminating net CO2 emissions from the economy and securing a stable climate, though still a changed one.
I have come to this conclusion after reflecting on a year when an avalanche of new knowledge and indicators made both tipping points clear. The first and perhaps the best understood is the rapid acceleration in climate impacts, reinforcing the view many hold that the scientific consensus on climate has badly underestimated the timing and scale of climate impacts. The melting of the Arctic Sea Ice, decades before expected, was the poster child of this but extreme weather and temperature records across the world, notably in the USA, suggested this Arctic melting is a symptom of accelerating system change.
It also became clear that this was literally just the “warm up” act – that we are currently heading for a global temperature increase of 4°C or more, double the agreed target.
In response came a series of increasingly dire warnings from conservative bodies like the International Energy Agency, the World Bank and the International Monetary Fund. Perhaps most colourfully, the IMF chief and former conservative French finance minister, Christine Lagarde, said that without strong action “future generations will be roasted, toasted, fried and grilled”. The World Bank was similarly blunt about the economic consequences of our current path: “there is also no certainty that adaptation to a 4°C world is possible.”
These and other reports laid out the evidence that the only option was transformational economic change because the alternative was simply unmanageable. Action was no longer a preferred outcome but an essential one. As the World Bank said “the projected 4°C warming simply must not be allowed to occur”.  Even the IEA, historically a kind of advocate in chief for the fossil fuel industry, came on board, pointing out that a stable climate and economy requires the majority of the global reserves of fossil fuels to never be burnt.
It is an extraordinary turn around when key mainstream economic institutions lay out the case for dismantling what is arguably the world’s most powerful business sector.
Of particular note in all this, observing both the message and the messengers, is that what was predominantly an ecological question is now primarily an economic one. This is a profoundly important shift, as economic risk is something society’s elites take very seriously.  It also unleashes another major potential tipping point which we seen signs of but is not yet in full flight. When non-fossil fuel companies understand the broad economic risk posed by the lack of climate action, they will become genuine and strong advocates demanding climate action – in their own self-interest. This is one to watch carefully as it will see a major shift in the politics when it comes.
The second tipping point in 2012 was the clear evidence that a disruptive economic shift is already underway in the global energy market. There are two indicators of this, with the first being the much noted acceleration in the size of the renewable energy market with dramatic price reductions and the arrival of cost competitive solar and wind. It is hard to overstate the significance of this as it changes the game completely, as various recent reports have shown.
Rooftop solar for example has grown so fast it is now eroding the profitability of major utilities by taking away their high margin income – peak pricing – and reducing demand. This is already seeing major economic disruption to companies and national economic infrastructure as this report from UBSon developments in Europe shows, with major shutdowns of coal plants now inevitable.
Of equal importance, and partly triggered by these market shifts, is the awakening of the sleeping giant of carbon risk, with open discussion in mainstream financial circles of the increasing dangers in financial exposure to fossil fuels. This has been coming for several years because of the financial risk inherent in the carbon bubble. As Phil Preston and I argued in a paper in 2010 and I further elaborated in The Great Disruption, the contradiction between what the science says is essential and the growth assumptions made by the fossil fuel industry is so large it represents a systemic global financial risk. This has been well articulated and more deeply explored by groups like Carbon Trackerwho have been taking the argument to the mainstream finance sector.
In 2012 this hit home, with significant economic and financial players like the IEA, HSBC and S&Ptalking about the concept of unburnable carbon and the financial risks in both investing in fossil fuels and in lending to coal, oil and gas projects. HSBC forecast a market value loss of 40 – 60% for oil and gas majors if the world acted to keep below 2 degrees. The IEA forecast the revenue loss in that scenario for the global coal industry would be  $1 trillion every year by 2035.
Combined, these two tipping points present the opportunity for the broad climate movement to achieve success, if they are understood and responded to appropriately by the activist, policy and business communities. But first they must be seen for what they are  – indications we are poised on the edge of a truly historic economic transformation – the end of fossil fuels and the building of a huge new industry sector.

  • To summarise:
  • – The science shows how we are not just failing to slow down climate change, but are in fact accelerating towards the cliff.
  • – In response, mainstream organisations focused on the global economy are becoming increasingly desperate in their calls for action, fearing the economic consequences if we don’t.  They are arguing that the only way the world can avoid the risk of breakdown is to transform the economy urgently and dramatically.
  • – Our capacity to do so is now real and practical, with the technologies required already being deployed at very large scale and at competitive cost. The size of the business opportunity now on offer is truly breathtaking.
  • – In response, the financial markets are waking up to the transformation logic – if the future is based in renewables and these are price competitive without subsidy, or soon will be, the transformation could sweep the economy relatively suddenly, even without further government leadership.
  • – This then puts in place an enormous and systemic financial risk – in particular investments in, or debt exposure to, the multi-trillion $ fossil fuel industry.
  • – This risk is steadily being increased by activist campaigns against fossil fuel projects (worsening each projects’ financial risk) and arguing for fossil fuel divestment (putting investors reputation in play as well).
  • – In response investors and lenders will reduce their exposure to fossil fuels and hedge their risk by shifting their money to high growth renewables.
  • – This will then reinforce and manifest the very trend they are hedging against.
  • – Thus it’s game on.

Is that it? Can we now sit back and expect the market deal with this?
Most definitely not.  It is probably true that the market would sort this out by itself if we had 60 years for it to do so. But we don’t. The science is clear that we have less than 20  – and this is where the opportunity for the climate movement emerges and why the choice of focus and strategy is now is so important. The task at hand is clear for policy makers, for business and investors as well as for the activist community.  It’s acceleration of existing momentum – to slow down fossil fuels and speed up clean energy. To make the 60 year process, a 20 year one.
It is now realistic to imagine removing the coal, oil and gas industries from the economy in less than 20 years.  Doing so is required if we are to have an 80% or greater likelihood of preventing the climate warming past 2 degrees C, a point past where the system could spin out of control.
What we are now hearing from major international economic institutions is that this is a binary choice. Either this happens or we head for social and economic breakdown. As the World Bank argues, the latter “must not be allowed to occur”.
Timing is the key shift the world needs to make in its thinking – this is no longer about the future, it’s about now. We don’t have 20 years to decide to act; we have 20 years to complete the task. If we follow the science, then in 20 years we must have removed the coal, oil and gas industries from the economy and replaced them.  It’s simple, it’s urgent and perhaps most importantly, it’s now achievable.
History gives us many examples of dramatic economic shifts – like the arrival of the computer chip and with it, the internet, the emergence of communications technologies and other facilitators of globalisation. We also have many examples of “whoops” moments – points when we realise after the event something was a very bad idea. Like tobacco, asbestos, lead in fuels and paint, ozone depleting CFCs and various other chemicals. Collectively, this tells us something very important. While each case is different, we are capable of transformational economic change and while it’s often disruptive and always fiercely resisted, we regularly do it.  This is much larger in scale but the same processes apply.
We need to keep reminding ourselves that this kind of economic transition is OK. That’s how markets works and while it will be challenging and require huge effort, it will work out. Yes, huge amounts of wealth will be lost and gained in the process, industries, countries and cities will face massive economic and practical restructuring challenges and many people will suffer in the process. But that’s how market shifts happen.
Austrian economist Joseph Schumpeter coined the phrase “creative destruction” to describe this process and to explain why it’s the underpinning strength of capitalism, calling it:  ”A process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
But while we can be comfortable that this process will deliver the required outcome, it’s not going to be smooth or pleasant for many participants. It will rather be messy, highly controversial and see huge amounts of value and employment both destroyed and created as the economy restructures around the necessary reality of a post fossil fuel economy.  I’m neither relaxed about this nor naïve about the scale of the challenge.  I just accept that it’s now inevitable. I also know we can do it and that we simply have no choice.
Of course, the losers will fight all the way to the end, using every argument, manoeuvre and delay they can think of. We should expect nothing else of them and, realistically, most of us would do likewise faced with similar circumstances. But they will still lose.
I do not however think we should demonise the fossil fuel industry or the people involved in it. The job to remove this industry has to be done – the future of civilisation literally depends on it – but we can do this firmly and clearly without making it personal.  As I’ve said in recent speeches on this topic – with some humour but a serious message – “we have to remove the coal, oil and gas industries from the economy with love and compassion.” This is the tough love of responsible parenting – the kids don’t like it but it’s still the right thing to do.
So with some surprise, this is where we find ourselves. It still won’t happen without focused and determined effort, but for the first time, we can envisage victory in the decades long fight on climate change. The science is clear, the technology is ready, significant sections of the elite are on side and the financial momentum is with us.
And this time, the economics is playing on the same side as the environment. Just in time.