Daily Archives: September 18, 2019

Alaskans worried that BPs sale of its Prudhoe Bay assets to Hilcorp means Alaskas oil and gas potential is waning can be reassured: Hilcorps growing strength is just the beginning of a new wave of investment and activity heralding a more energetic phase in our resource-rich states top industry. Here are a few examples.When we faced a potential gas shortage in Cook Inlet in 2012, Houston-based Hilcorp was purchasing mature fields from Chevron and Marathon. Hilcorp then embarked on a vigorous drilling and efficiency program, increasing oil and gas production and ensuring reliable energy supplies for Southcentral Alaska.Hilcorp next took their plan north, buying in to four of BPs North Slope units in 2014. Most recently they began producing viscous oil from their Moose Pad at Milne Point, increasing field production to levels not seen in years.With declining oil throughput in the Trans-Alaska Pipeline System, Hilcorps aggressive strategy is delivering the kind of results Alaskans need, and the jobs critical to our economic security.Oil Search, a Papua-New Guinea independent new to Alaska, is systematically, deliberately and thoughtfully pursuing its Pikka development, aiming to start oil production in less than four years.Pikka will create high-paying jobs and boost state royalty revenue, and could increase pipeline throughput up to 20 percent. Oil Search and its partners Armstrong, a Colorado independent, and Repsol, a Spanish global oil company, have several other North Slope prospects that may not be far behind.U.S. major ConocoPhillips may bring its Willow prospect online about the same time as Pikka, increasing oil production by a similar amount. This expansion of development westward from Alpine and Greater Mooses Tooth into the National Petroleum Reserve-Alaska will add critical infrastructure, making other western prospects more commercially feasible.London-based newcomer Premier Oil, in partnership with Australian independent 88 Energy and Texas independent Burgundy Xploration, plans to drill this winter to further evaluate a block of leases called Project Icewine, 50 miles southwest of Prudhoe Bay.Weve known since the 1960s this area holds potential for oil discoveries, and these optimistic independents believe they can bring this prospective area into production.Other veteran and new independents have big exploration and development plans. We saw expressions of interest at CERAWeek last March, and Im confident well see evidence of that interest at the states North Slope areawide lease sale on Dec. 11.Lease sales generate immediate revenue for Alaskans through lease sale bonus bids and rents, and are the third-largest source of revenue generated by the Division of Oil &Gas, after production royalties and net profit shares.Last year, lease sales brought in more than $28 million to support the General Fund, Alaska Permanent Fund, and others.Along with its regular lease offerings, the State plans to offer three Special Alaska Lease Sale Area, or SALSA, blocks. These contiguous lease blocks represent a unique opportunity to acquire lease rights combined with a trove of associated well and seismic data and other information compiled by the State. The intent is to jump-start a companys understanding of the North Slope and thereby accelerate drilling and development plans.Also in December, the Bureau of Land Management will offer leases in the NPR-A and, for the first time ever and after decades of waiting, tracts in North Americas most prospective onshore prospect: the coastal plain of the Arctic National Wildlife Refuge.Clearly, there are many reasons to be optimistic about the future of oil and gas in Alaska. New technologies, new investments and new players will add more jobs in the industry, more money in the economy and state treasury, and put more oil in the pipeline. Last winter was the North Slopes busiest in 15 years. That trend continues.^James B. Beckham is acting director of the state Division of Oil &Gas.

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James B. Beckham - Alaskajournal.com

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ESCALATING FUEL ECONOMY FIGHT COULD FORCE CARMAKERS TO CHOOSE SIDES: The future of fuel economy standards in the U.S. is looking like an all-out war, and it may force automakers those who havent already to choose sides.

President Trump with a tweet of course! confirmed Wednesday he will revoke Californias waiver to set its own tailpipe greenhouse gas limits stricter than federal limits.

Trump said that the administration was pursuing the change "to produce far less expensive cars for the consumer, while at the same time making the cars substantially SAFER."

The move effectively ties one hand behind Californias back as it tries to meet its ambitious climate goals. And it could slow the efforts of the dozen other states that also follow the California standards to lower emissions.

The move is certain to draw immediate legal fire from the Golden State. California Attorney General Xavier Becerra has already promised to sue, telling Trump in a statement Tuesday he has no basis and no authority to pull this waiver.

But the waiver withdrawal will also increase the pressure on automakers to weigh in on their fate as tensions between their regulators boil over.

Four automakers Ford, Honda, Volkswagen, and BMW went around Trump in July, striking a deal with California to follow standards that are less stringent than the Obama-era regulations but much stronger than Trumps plans to freeze the standards.

Intimidation tactics: Margo Oge, who directed EPAs transportation office from 1994 to 2012, told Abby the Trump administrations move seems geared to scare other automakers who might be considering joining the California deal.

The waiver withdrawal follows news earlier this month that the Justice Department launched an antitrust investigation into the four automakers teaming up with California, exploring whether those car companies are violating federal competition laws.

Eliminating Californias waiver now draws a hard line between the state and the Trump administrations plans to freeze federal standards.

This is really setting this up as a huge decision for companies like General Motors and Toyota that may be on the fence about the California deal, Jeff Alson, former senior engineer and policy advisor in the EPAs transportation office until 2018, told Abby. They cant just continue to stand on the sidelines now and try to play it both ways.

What the agencies are doing: The EPA will revoke a waiver given to California to set its own greenhouse gas standards for passenger cars.

Under the Clean Air Act, California has the special ability to set stricter standards than federal limits. That authority dates back to the 1970s when the Clean Air Act was written, and the state has been granted

Only once has a waiver been denied Californias first waiver on greenhouse gas emissions standards, during the George W. Bush administration. California went to court over that denial, but the case was never decided because the Obama administration came into office and reversed course.

To date, the EPA has never withdrawn a waiver.

But what the agencies arent doing is just as important, the former EPA officials say: The EPA and Transportation Department arent finalizing the rest of their plans to freeze federal fuel economy limits yet.

The agencies likely arent ready for that step yet because theyre grappling with how to fix the analysis justifying their rollback, Alson told Abby.

The agencies were just ridiculed in the public comment period over their analysis, Alson said, adding the White House is in a very big bind trying to rework the numbers.

They cant get the technical analysis to give them the answer they want in a way they think they can sell to the public, he said.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email jsiegel@washingtonexaminer.com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and youd like to sign up, click here. If signing up doesnt work, shoot us an email, and well add you to our list.

SAUDI ARABIA RESTORES HALF ITS LOST OIL PRODUCTION AFTER ATTACK: Saudi Arabia has restored half the oil output it lost in weekend attacks on its production facilities.

The worlds largest oil exporter, Saudi Arabia expects production levels to return to normal by the end of September, the countrys energy minister Prince Abdulaziz bin Salman said Tuesday at a press conference.

The attack Saturday on a Saudi oil field and the Abqaiq processing facility caused the loss of nearly 6 million barrels of oil per day about 5% of the world's daily crude oil production.

Also Wednesday, the CEO of Saudi Aramco, Amin Nasser, stressed that Saudi Arabia was able to make up for the current shortfall from its own reserves and would not need any oil from America's Strategic Petroleum Reserve.

Where prices stand: The price of Brent crude, the global benchmark, initially rose as much as 18% to $70.98 per barrel before settling down to about $64 per barrel Wednesday morning.

U.S. gas prices have increased to $2.66 per gallon on average as of Wednesday morning, according to GasBuddy, compared to $2.59 per gallon the day before, and $2.57 per gallon one week ago.

The increase in the national average from Tuesday to Wednesday was the third largest single day price rise in the last decade, GasBuddy data shows.

TRUMP DISPATCHES POMPEO TO GULF TO COORDINATE RESPONSE: Trump has dispatched Secretary of State Mike Pompeo to Saudi Arabia and the United Arab Emirates to coordinate the response to Saturdays missile and drone strike. According to his public schedule, Pompeo will be in Jeddah today, where he meets with Saudi Crown Prince Mohammed bin Salman, and then travels to Abu Dhabi to meet with UAE Prince Mohammed bin Zayed. His mission is to coordinate efforts to counter Iranian aggression in the region.

Turki al-Maliki, a spokesman for the Saudi defense ministry, said Wednesday the attacks were unquestionably sponsored by Iran, in comments reported by Bloomberg.

Trump tweeted Wednesday morning that he just instructed the Secretary of the Treasury to substantially increase Sanctions on the country of Iran! without providing further details.

The Trump administration has already imposed strict sanctions on Iran, denying waivers to countries that buy the countrys oil.

PENCE OUTLINES PLAN TO DETER IRANS REGIONAL ATTACKS: Vice President Mike Pence briefed Senate Republicans in a closed-door meeting Tuesday on the oil attacks in Saudi Arabia and how the U.S. could respond, calling for America to restore deterrence of Irans attacks in the region.

Senior lawmakers with access to classified information about the attack said they feel confident it was carried out by Iran. Pence told lawmakers Trump is weighing the options about what to do next, the Washington Examiners Susan Ferrechio reports.

The most salient point, among many, that the vice president and others made is, we are going to respond appropriately and do whats in the best interest of America, and it has nothing to do with any economic pressure brought on in the rise of the price of oil, because thanks to our private sector, America is pretty much energy independent, Louisiana Republican John Kennedy said after the meeting.

MURKOWSKI NOT HOLDING BREATH OVER FERC NOMINEE: Senate Energy and Natural Resource Committee chairwoman Lisa Murkowski is not expecting the White House to nominate a new commissioner of the Federal Energy Regulatory Commission this week.

Murkowski on Tuesday dismissed a report by Politico that Trump as soon as this week will nominate James Danly, FERCs current general counsel, as a Republican commissioner.

I dont believe it, the Alaska Republican told Josh and other reporters after a committee hearing Tuesday. We have been told there is going to be a Republican named imminently, and that has been going on for 10 months now.

Murkowksi added she has not heard anything directly about a pending FERC nomination.

FERC is operating with two vacancies: Danly, if nominated and confirmed, would give FERC three Republican commissioners and one Democrat.

The sitting commissioners are Democrat Rich Glick and two Republicans, Chairman Neil Chatterjee and Bernard McNamee. Former Republican Chairman Kevin McIntyre died of cancer in January, while Democrat Cheryl LaFleur retired this summer after Senate Democrats indicated they would not support her for a third term.

Questions on Trumps nomination process: Utility industry sources tell Josh the White House is not likely to pair the likely eventual nomination of Danly with a Democrat to replace LaFleur, going against FERC custom.

Joe Manchin of West Virginia, the top committee Democrat, has urged Trump to rise above the political fray and simultaneously nominate one Republican and one Democrat.

Not pairing this nomination would significantly erode a long-standing practice of pairing nominees, particularly when two seats are open, a former FERC staffer told Josh. That will just add to the politics around FERC and make it harder, not easier, for the agency to do its job.

Murkowsi said she is eager to see the White House nominate a commissioner soon, and would not commit to holding up confirmation votes if the president only nominates a Republican.

It has always been my preference to get FERC to full complement, she said. The president has to name these individuals. I would prefer we get a name so I can get started.

BUTTIGIEG RELEASES FIRST IN THE FIELD PROPOSAL ON DISASTER PREPARDNESS: Pete Buttigieg, the mayor of South Bend, Ind., released Tuesday what he called the first plan to address disaster preparedness among the presidential field.

Climate change has only exacerbated the need to improve our disaster preparedness, Buttigieg said in a Medium post.

Buttigieg says he would create a Disaster Commission to make recommendations to streamline the process for disaster preparedness and recovery, which he says is currently hampered by poor information-sharing between federal agencies. That makes people recovering from disasters unsure about where to turn for help.

Hed also launch a National Catastrophic Extreme Weather insurance program.

Buttigieg vows to create a national culture of disaster resilience by promoting better planning, providing funding for modernizing infrastructure, and making smart choices about where to build.

Hed fund community volunteer programs that are often the first to respond to disasters.

And he would reinstate building standards to protect federally funded infrastructure projects from future flood risk that the Trump administration revoked.

WE CAN FINALLY DECLARE THE CLEAN POWER PLAN LAWSUIT DEAD: Four years and seven hours of oral arguments later, the D.C. Circuit has finally closed the door on the lawsuit over the Obama administrations Clean Power Plan.

The full panel of judges who heard marathon oral arguments over the power plant carbon limits in September 2016 ordered the lawsuit dismissed as moot Tuesday.

Republican and Democratic state attorneys general, utilities, industry trade groups, environmental groups, and more had been fighting over what to do with the Clean Power Plan lawsuit now that the Trump EPA officially repealed the rule and replaced it with its version.

The new EPA rule known as the Affordable Clean Energy rule sets much narrower limits for existing power plants, based solely on what facilities can achieve through efficiency improvements on site. The Obama administrations rule went beyond that to also encourage utilities to switch from coal to natural gas and renewable energy, a step its critics say unlawfully stretched the agencys authority under the Clean Air Act.

The legal issues live on: And not just in our hearts. Legal battle lines have already been drawn over the Affordable Clean Energy rule. The scope of the EPAs authority to set greenhouse gas limits for power plants will be the core question judges will again grapple with in that lawsuit, just starting to make its way through the D.C. Circuit.

VIRGINIA GOVERNOR WANTS TO JOIN THE 100% CLEAN ELECTRICITY CLUB: Governor Ralph Northam of Virginia signed an executive order Tuesday requiring his government to develop a plan to produce 30% of the states electricity from renewable sources by 2030 and 100% from carbon-free sources by 2050.

Northam, a Democrat, says the plan should include a mix of increasing use of solar and wind (onshore and offshore), improving energy efficiency, and integrating energy storage technologies onto the grid. The electric power sector represents 30% of the carbon emissions in Virginia.

The executive does not have the force of law. Virginia has a divided legislature.

In recent months, Democratically-controlled New York, Nevada, Washington and Maine have passed laws mandating 100% clean or zero-carbon electricity by 2050 or earlier, joining Hawaii, California, Washington D.C. and Puerto Rico.

New York Times Inside conservative groups effort to make dishwashers great again

Washington Post Billions spent on US weapons didnt protect Saudi Arabias most critical oil sites from a crippling attack

Associated Press Brazils environmental workers tell of decline before fires

Financial Times: BHP to increase CEO compensation linked to climate change

THURSDAY | SEPTEMBER 19

10 a.m. 2318 Rayburn. EPA Administrator Andrew Wheeler testifies in a hearing before the House Science Committee.

10 a.m. to 6:30 p.m. 37th & O Streets, N.W. Georgetown University, MSNBC, Our Daily Planet, and New York Magazine host the first day of Climate Forum 2020 with presidential candidates from both parties.

FRIDAY | SEPTEMBER 20

9 a.m. to 3 p.m. 37th & O Streets, N.W. Georgetown University, MSNBC, Our Daily Planet, and New York Magazine host the second day of Climate Forum 2020 with presidential candidates from both parties.

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Daily on Energy: Escalating fuel economy fight could force carmakers to choose sides - Washington Examiner

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Last month, leaders at some of the worlds largest companies took the notable step of redefining the purpose of a corporation, adopting a modern standard for corporate responsibility that promotes an economy that serves all Americans.

The 181 CEOs who signed the statement from Business Roundtable, an association of chief executive officers headed by JPMorgan Chases Jamie Dimon, pledged to run their companies for the benefit of all stakeholders customers, employees, suppliers, communities, and shareholders.

The statement marks a notable move away from the adherence to shareholder primacy the belief that corporations exist principally to serve shareholders which the group had embraced since at least 1997. Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term, Dimon said in prepared remarks.

That pivot should catch the eye of a growing number of organizations committed to impact investing, the practice of investing in companies, organizations, and funds with the intention of generating not just financial returns, but measurable social and environmental impact as well.

Underlying that philosophy is the belief that private capital is critical to tackling the worlds most pressing environmental, social, and governance (ESG) problems, an ethos echoed in the Business Roundtable statement of purpose, which said, We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment, and economic opportunity for all.

That dovetails with views shared at an impact investing panel held earlier this year, part of the 2019 MIT Sloan Investment Conference.

Its one of the fastest-growing areas of the investment business, said panel moderator Liqian Ma, head of impact investing research at global investment firm Cambridge Associates. The goal is to invest in products and services that serve a need, address real challenges, and also can and deserve to be profitable.

We're focusing on the impact that investing has beyond financial return. In addition, you're hoping to generate an environmental or other impact.

Impact investing is values-driven finance you allocate capital to align with the world you want to see, said Amrita Sankar, MBA 20, co-president of the MIT Impact Investing Initiative. My generation has grown up watching the world's most intractable problems become only more exacerbated poverty, climate change, social injustice, and more. We see impact investing as an opportunity to use markets to correct for these kinds of issues by providing positive social and environmental returns.

For all its appeal, the concept can be hard to nail down the phrase impact investing itself is ambiguous, said Gita Rao, a member of the MIT Sloan finance faculty who teaches a class on social impact investing.

In a sense, the term impact investing is an oxymoron, because all investing is inherently impactful: you are investing with a specific objective, said Rao, who is the faculty advisor for the Impact Investing Initiative and has managed socially responsible portfolios for two decades. That's why my course is titled 'Social Impact Investing,' because we're focusing on the impact that investing has beyond financial return. In addition to financial return, you're hoping to generate an environmental or other impact.

The idea of investing with intention beyond financial return isnt new, Rao said. Faith-based organizations have been investing in accordance with their values for a very long time, she pointed out.

Rao managed a global equity portfolio for a large endowment in the 2000s under what were known colloquially as Catholic constraints no guns, no tobacco, no pornography, as might be expected. But the exclusion criteria additionally affected investment decisions in areas one might not expect, Rao said.

For example, the portfolio could not invest in Total, a large French energy company, because one of the byproducts of oil refining is rubber, which is used in contraceptive products. Similar guardrails guide Islamic investing, which has seen significant growth in the Middle East as well as Asia, said Rao.

Intentional investing is alternatively known as corporate social responsibility, socially responsible investing, and sustainable investing, among other terms. The most common of these ESG refers to the environmental impact, social impact, and corporate governance of a company. Investment professionals use ESG ratings to evaluate how specific companies are performing along these dimensions, and how well those companies align with their own values.

Its not just a matter of excluding the not-so-responsible companies, but of engaging them.

There is a distinction between impact investing and ESG-based investing. Investing for impact is often described as investing with a double bottom line that is, financial return and a clear, well-articulated set of impact goals often, but not always, aligned with the United Nation Development Programmes 17 sustainable development goals.

ESG-based investing evaluates companies on a set of criteria defined by the investor, and the business model of the company need not explicitly incorporate social impact.

ESG investing typically has a strong shareholder advocacy component, with what Cambridge Associates Ma called a cohort of thoughtful investors actively work to influence companies direction. Its not just a matter of excluding the not-so-responsible companies, but of engaging them, said Ma. Some clients may still have mining, oil, and gas in their portfolio, for example, but they will be asking those companies where they can make improvements.

Climate change is increasingly top of mind for impact investors, some of whom, like Ma, have a personal interest in climate-conscious investing.

Growing up in China, Ma experienced firsthand the effects on air quality when households burned coal for heating and cooking. I needed coal to survive as a child, and every time I go back [to China] I see the environmental effects of burning that coal. I encourage people to think about it, said Ma, who categorized resource efficiency as one of the fastest growing areas of actionable investing.

Rao agreed. Climate change in all its ramifications not only affects people profoundly, but it affects [markets] on a geopolitical level. From an investor's perspective, climate change poses a material risk, which is often not incorporated into the pricing of securities. It affects the business strategy that companies have to adopt going forward, she said.

For all their virtue, impact investments are still subject to the rules of the marketplace, which poses some distinct challenges. First and foremost, its not easy to find companies that meet stringent impact requirements while still providing market rates of return. Achieving these twin goals is not easy or straightforward. It requires additional resources to measure impact and may involve greater risk, said Rao.

Achieving these twin goals is not easy or straightforward.

Assessment can be a challenge. At minimum, potential investors want to evaluate the environmental, social, and corporate governance of a company with the same rigor thats applied to financial performance but its not always a clear-cut evaluation. In fact, new research from MIT Sloan found that ESG ratings diverge substantially among the agencies that provide those services.As a result, researchers warned, corporate stock and bond prices are unlikely to properly reflect ESG performance, causing investors to struggle to accurately identify out-performers and laggards.

Beyond ESG, which primarily focuses on a companys operational practices, many investment management firms have developed their own frameworks to assess impact.

MIT Investment Conference panelist Quyen Tran, a sustainable investment strategist and member of the Global Impact team at Wellington Management Co., said the team looks for three attributes in companies its considering adding to its Global Impact portfolio, which is drawn from a universe of approximately 500 publicly traded impact companies:

Then theres the question of scalability. A startup that provides learning technology to underserved high schoolers in Africa might be delivering direct impact, but does it have the potential to grow, Rao asks both in the sense of broadening and deepening its influence, but also its ability to deliver returns.

In contrast, a multinational corporation like Unilever might present with some problematic areas, but by dint of its size and reach, has the potential through its impact activities to move the needle more significantly, Rao said. Theres a tradeoff here. With the Unilevers of the world, the impact may be diffuse, but the scale is enormous. Its not an either-or decision.

Finally, theres the question of investment horizon. Impact projects by their nature tend to need long development cycles to come to fruition. Investors may have much shorter time horizons and lower risk tolerance. The market punishes or reward stocks based on whether they can meet or beat earnings, Rao said. Impact projects involve upfront costs with the benefits often accruing over the long term. Investors need to be patient.

Ma, who once authored a report titled Risks and Opportunities from the Changing Climate: Playbook for the Truly Long Term Investor, believes that longest view is in harmony with Cambridge Associates fiduciary responsibility to its clients.

If youre really being thoughtful and authentic, long-term is how you should think of the world, he said. Our clients are stewards of capital that they want to preserve for decades, for a few hundred years. We would not be doing our jobs if we werent identifying risks and opportunities with those timeframes in mind.

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Impact investing is hot right now. Here's why - MIT Sloan News

A talk given as part of the panel session onThe Economics of Climate Emergency, at Manchester Metropolitan Universitys launch event for theFuture Economies Research Centre.

If nothing else, the last few months have heightened awareness of the desperately parlous predicament that now faces humanity, with an accelerating climate and ecological crisis. So attempts to design assertive policy proposals are very welcome. The Green New Deal is the one that currently is getting the most attention and perhaps traction. So I want to ask some critical questions that generally seem to be ignored in the infectious enthusiasm for the idea. In doing that Ill also be rehearsing some insights from the degrowth perspective.

All this is about the relationships among three spheres, exchange value, use value and (physical) materiality.

Our fundamental problem is a material crisis -of carbon pollution and its impacts on our ecosystem, and of resource extraction that is devastating ecosystems and livelihoods.

Policy proposals are concerned, at root, with ensuring human populations can access use values, derived through human labour acting on the worlds material reality.

But our economic system, which mediates the relationship between use values and matter, is based on exchange values, the monetisation of goods and services.

With this terrain in mind, lets look at the 6 problems for Green Deals.

In one of the clearest statements on the theory that underpins the GND idea, the original UK GND team explained that:

government intervention generates employment, income and saving, and associated tax revenues repay the exchequer. This is the multiplier process, attributed to Richard Kahn, Keyness closest follower. Any public spending should be targeted so that domestic companies benefit, and then the wages generated create further spending on consumer goods and services. So combined heat-and-power initiatives generate income for construction and technological companies, and then workers salaries are spent on food, clothes, home entertainment, the theatre and so on, creating demand for those industries.(New Economics Foundation 2008, p. 27)

For more on the Keynesian thinking that underpins Green New Deals see this article.

But here is the problem. Increases in the scale of economic activity (as conventionally measured in terms of GDP) are associated with increases in the throughput of energy and materials, and these increases have involved increased emissions of greenhouse gases, resulting primarily from the extraction and combustion of fossil fuels. Green growth, requires that this association between GDP and GHG emissions must cease to exist: this is known as decoupling. It is doubtful whether any developed country has achieved this at the scale and permanence required(Burton and Somerville 2019, pp. 99101), especially when international shipping and aviation plus embodied carbon in imports are taken into account(Anderson 2019).

Irrespective of the levels of GHG emissions, the material flows that underpin the current scale of the economy already involve problems with extractive industries (located largely in the global South) and land use change more generally. For these material flows, the overall evidence is that there is no decoupling from GDP growth, with the (international) material footprint increasing by some 6% for each 10% in GDP (Wiedmannet al.2015).

For each increment in the scale of the economy, there is an increment in the extraction of minerals, the number of mines, the extent of cultivated land, the extraction of water, the number of ships, lorries and planes carrying goods and people, and in the amount of waste that has to be disposed of, whether by recycling or by dumping it in the earths land, sea and air, its ecological sinks.

The multiplier effect, referred to above, creates a problem because it is non specific: other things being equal, there is no control over where the multiplier effects have impact. So the desired, clean, growth of the economy has undesirable implications in terms of additional resource and energy use. Clean begets dirty.

Read more about this problem.

GNDs emphasise switching to renewable energy. So far, increases in renewable energy deployment have not led to a reduction in fossil fuel usage globally. Overall their deployment has been to add to the global energy mix rather than replacing fossil fuels. Moreover, it is doubtful whether renewables can provide the scale of concentrated energy used by the current global economy: the constraints are less in the power that could theoretically be generated from natural flows than in the minerals needed to deploy them: minerals used in generators and motors, in batteries and in electronics, as well as copper for transmission of power(Garca-Olivares 2015). These are finite and with limited substitutability.The revolution will be low powered, so the Green Deal has to factor ina plan for energy descent.

The well validated, and landmark, Limits to Growth study modelled the impacts of resources becoming scarcer and their cost increasing. This undermines the stability of the production system well before the resources are near exhaustion: inexorably reducing returns on investment lead to an economic collapse(Meadowset al.1974,2005, Turner2008,2014,Homer-Dixonet al.2015). Any expanding economic system has to grapple with this, even if it successfully exploits essentially free natural energy flows: you cant create minerals from sunlight. These economic consequences of the increasing scarcity and inaccessibility of most minerals and metals need to be addressed in any credible Green Deal, yet there is almost no discussion of this crucial reality in any of the proposals, nor of the hidden resource intensive demands of new technology.

Read more about the Limits to Growth and the EROI problem.

Even if it were possible to mitigate the climate crisis through the kind of transformation proposed in the various Green Deals, there are other ecological crises to contend with. These can be understood in terms of the Planetary Boundaries framework proposed byJohan Rockstrm and colleagues(Rockstrmet al.2009a, 2009b, Steffenet al.2015). Climate change is just one of these boundaries. As of2015, the evidence available to the Planetary Boundaries investigators indicated that

Four of nine planetary boundaries have now been crossed as a result of human activity: Two of these, climate change and biosphere integrity, are what the scientists call core boundaries. Significantly altering either of these core boundaries would drive the Earth System into a new state.

Transgressing a boundary increases the risk that human activities could inadvertently drive the Earth System into a much less hospitable state, damaging efforts to reduce poverty and leading to a deterioration of human wellbeing in many parts of the world, including wealthy countries

Read more about this.

It is unclear whether and how the various Green Deals propose to address these additional threats, whether or not they rely explicitly on green growth.

I should note that the newest, and very comprehensive set of proposals, from the Green New Deal for Europe grouping, does acknowledge and attempt to address all these questions, although not necessarily altogether convincingly (Adler, Wargan, & Prakash, 2019).

But it is in the political economy of the GND where we have a fundamental contradiction that will not be easily resolved.

Paying for the GND has attracted a lot of debate and I dont propose to go into the intricacies. Broadly, it is suggested that this be done by Government and private sector, raising credit from other sectors of the economy, i.e. individual and corporate investors, including public and private sector pension funds.

The problem is that this all assumes a return on the investment.

For the private sector, this is via interest or dividends, based on the profits from the new activity.

Some advocates suggest that the GND be funded through money created by government especially for this purpose by electronically printing money.

In all these cases, the advance of money for investment ultimately requires ongoing expansion of capital, themodus operandiof the capitalist system, founded on the expropriation of surplus value in the labour process, which we know as economic growth. Without expansion, there is no, or insufficient, return on the outlay.

Despite the claims of some GND advocates, Green Deals are predicated on the expansion of GDP and as we saw, we cant rely on that to decouple from material impacts.

read more about this

That is, unless another way can be found. There are some indications that this might be possible.

Firstly,an ecologically feasible Green Deal would entail some way of capping resource and energy use at source, effectively the equitable rationing of commodities (goods and services). Doing this would also incentivise the transition to less ecologically and resource intensive offerings across the market, so long as emitting activities werent driven underground.

Secondly, a number of studies show that the creation of credit could, under certain conditions, fund necessary investments without creating an imperative for economic growth(Berget al.2015,Jackson and Victor 2015,Lee and Werner 2018).

Thirdly, if the industrial sectors of the new economy were taken out of private capitalist ownership, then the motor of capital self-expansion need not necessarily be required, though this would, I think imply a trajectory towards a steady state, at least for that part of the economy.

Fourthly, some of the expansion could conceivably be funded by the redirection and re-prioritisation of undesirable economic activity though much of that still requires profitability.

Fifthly, as the latest of the GND papers suggests, aggregate energy demand must be reduced by scaling down material production and throughput. That would entail shifting income and welfare creation from industrial production to social and environmental reproduction: maintenance, recycling, repair, and restoration of environmental and infrastructural resources, as well as education, culture and care for people and environment. But that, idea, close to the dpense favoured by some degrowth theorists (e.g.Kallis, 2015), besides sounding like pie in the sky under capitalism, ignores the massive,neocolonial, outsourcing of industrial production to other economies.

Done in a managed way, that would be a lot better than the unmanaged periodic destruction of value that is a feature of capitalist cycles, but how do we get it to happen?

Teaser photo credit: By Senate Democrats GreenNewDeal_Presser_020719 (7 of 85), CC BY 2.0

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Six Problems for Green Deals - Resilience

Covering Climate Now: We need to broaden our measures of success if we want to have any chance of reaching blunt targets for reducing emissions, writes Catherine Leining.

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Since 1992, multiple rounds of greenhouse gas emission targets have failed to reduce absolute emissions globally or in Aotearoa in line with preventing dangerous climate change. One definition of insanity is repeating the same action and expecting different results. Whether it is insanity or courage, we are trying again.

New Zealands economy is emissions intensive and vulnerable to climate change impacts. When it is so clear that we have a serious problem, why are emission targets so hard? Here are a few reasons:

It seems logical to start by agreeing on a science-based emission target and then create policy later to manage those other issues. The hitch is that reaching a science-based target requires transforming our economy, and a target of X tonnes in year Y says nothing about how we will get there or what will happen to people and ecosystems in the process. We compare different greenhouse gases using their global warming potential. But what about the wellbeing potential of gases from different sources?

We can envisage a low-emission future for our stationary energy and transport sectors. This becomes harder for the future of livestock production under the constraints of climate change, water quality, technology, commodity markets, and consumer preferences. Industrial production bound by the laws of chemistry also faces a challenging transition. The easiest fix an overrun of rapid-growth pine plantations only buys us time, impacts on our rural communities and biodiversity, and could interfere with our progress everywhere else. For all sectors, the pace of change could strand valuable assets.

When people cant see a positive goal and feasible transition pathway, an emission target feels like an existential threat. In reality, climate change is the existential threat and the emission target should be a catalyst for transformation.

A target is not the same as motivation. A target can be inspirational or punitive, an opportunity or a threat, embraced or imposed. Is a target the cruel hand of government depriving us of our economic freedom? Or is it a social contract to safeguard our future and prepare our economy for the inevitable demands that lie ahead?

Our targeted outcome is not as simple as X tonnes of emissions in year Y. It is ultra-low-emission wellbeing: meeting the fundamental needs of present and future generations and safeguarding our ecosystems within the limits of a stable climate system.

Targets might work better if we broadened our measures of success beyond X tonnes of emissions in year Y and embedded our commitment to wellbeing in the transition. For example, a 2050 target of zero greenhouse gas emissions from transport does not guide trade-offs with ensuring that mobility meets economic and social needs while minimising resource extraction and negative impacts on air and water quality.

Thinking is advancing in this area. The OECD is preparing wellbeing indicators for climate change mitigation. A 2019 Circle Economy report released in Davos proposed a mass-value-carbon framework for guiding economic development to meet social needs. The UK Committee on Climate Change is monitoring 24 progress indicators aligned with the UKs emission target. Statistics New Zealand is working on wellbeing indicators, but its not clear how interdependencies will be addressed.

A more holistic approach which brings practical meaning and wellbeing safeguards to a blunt long-term emission target could lower the perceived risks of higher mitigation ambition.

We are not alone in this struggle. Strengthening climate change targets is a hot issue globally. Current pledges under the Paris Agreement would deliver about 3oC of warming. On 23 September, the UN Secretary-General will host the 2019 Climate Action Summit in New York to light a fire of ambition under leaders from government, business, civil society, and international organisations. In line with the 1.5oC goal, he is calling for concrete, realistic plans to enhance their nationally determined contributions by 2020, in line with reducing greenhouse gas emissions by 45% over the next decade, and to net zero emissions by 2050. The summit will fall in the middle of the youth-inspired Global Climate Strike from 20-27 September.

Ultimately, actions speak louder than targets. What matters is what we actually do. Targets will be helpful only if they direct political will, regulation, resources and action toward ambitious low-emission pathways that work for Aotearoa.

Catherine Leining is policy fellow at Motu Economic and Public Policy Research,an independent charitable research organisation. The views are the authors own.

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For emissions targets to work, they need to be a catalyst for action - The Spinoff

Rear seat of autonomous car. 3D rendering image.

Forecasts suggest that we are entering an era of massive automation. According to McKinsey, close to half of all work activities could be automated using existing technologies. But what happens after artificial intelligence (AI) and robotics? What happens after automation? According to Aaron Bastani, a London-based researcher, the answer would appear to be Fully Automated Luxury Communism. Strange as it may seem, Bastani believes that automation is driving capitalist societies headlong into a post-capitalist utopia: Think Star Trek or Ian Banks Culture Series.

The truth is that this is not an entirely new idea. As Peter Diamandis, founder of Singularity University and Executive Chairman of the XPRIZE Foundation explains: the exponential acceleration of technology promises a new era in social and economic abundance. What is perhaps more counter-intuitive, however, is Bastanis belief that this technology-driven abundance is now making actual communism possible for the first time in history. As he frames it, we are moving toward an economy of extreme supply in which capitalism has reached its evolutionary conclusion.

Smart robotic farmers in agriculture futuristic robot automation to vegetable farm,Smart farm concept

Like Jeremy Rifkin, Bastani argues that technological innovation is driving the marginal costs of goods and servicesfood, healthcare, housing, softwareto near zero. Just as the domestication of animals and crops produced the Agricultural Revolution (10,000 BCE), and machine technologies produced the Industrial Revolution (1800 CE), so computers are reshaping history around what Bastani calls Fully Automated Luxury Communism (FALC). Capitalism it would seem has given birth to a technological revolution that is accelerating the long-term collapse of prices and eventually markets.

Interestingly, a similar argument has been made by Viktor Mayer-Schnberger and Thomas Ramge. In their book Reinventing Capitalism, the authors argue that technology is disrupting markets, spawning data-driven platform monopolies set to reshape the nature of buying and selling. In their view, AI is driving a new automation era in which the ever-evolving capacities of algorithms has begun displacing price signals. As a consequence, the increasing precision of algorithms is set to replace human social coordination even as big data replaces capital.

There is no doubt that we are facing sweeping changes in the structure of capitalist societies. Driven by social lethargy and the parasitic power of the fossil fuel industry, the worlds zombie governments now seem incapable of averting global catastrophe. Indeed, the excesses of capitalism are now converging toward an unprecedented set of crises: an environmental crisis, a demographic crisis, a democracy crisis, and a crisis of socioeconomic stratification. All of which requires serious political attention.

Enter Fully Automated Luxury Communism. Where premature attempts at communism produced industrial-era prison states, actual communism through automation is leading to an era of AI, bioengineering, clean energy, near-earth asteroid mining, and universal basic services. Like any good Silicon Valley pitch, Bastani suggests that this technological revolution is only just beginning. In fact, capitalism is just the prologue to a new stage in history. In the shift to luxury communism, we can expect limitless abundance and a classless society. Or as Marx once phrased it, a new mode of production.

As technology undermines capitalist markets it is simultaneously opening the way to massive changes in governance and political economy. Unfortunately Bastanis prescription for managing the transition largely echoes strategies of the pastnationalism, worker cooperatives, state ownership, and socialized banking. Rather than the technological modernization that animates much of his vision of the future, Bastanis policies for the present simply reduce everything to the power struggles of the last century. And this is where the FALC manifesto becomes far less radical. As one reviewer puts it, Bastanis proposed system of hyper-politicized banking and hyper-politicized local government contracting, meant to boost worker cooperatives and other types of organizations of which he approves, is a surefire recipe for patronage, nepotism, subsidy fraud, and waste.

Pudong Lujiazui Financial District Roof, Shanghai, China

Fully Automated Luxury Communism is a tantalizing vision of the future. But what seems more likely in the near term is fully automated algorithmic governance. After all, automation is not reserved for the private sector alone. Advancing democracies into the era of Big Data could go a long way towards reducing systemic dysfunction within the public sector. Estonia, for example, is developing one of the most advanced digital governance systems in the world. Indeed, as Silicon Valleys Tim OReilly explains, government regulations should be regarded as algorithms that can be adjusted based on fresh data. OReilly is right.

Software is eating the world and this includes the worlds institutions and governments. Using sensor technologies and the Internet-of-Things to reinforce government oversight could begin to more effectively manage the various crises we now face. The most recent advancement in AI and machine learning could provide revolutionary tools for reshaping public sector decision-making, forecasting, data classification, and resource management. All of which could avert disaster.

The future may be automation but will we live to see it? Bastanis overarching concerns with the excesses of capitalism are entirely legitimate. Can the institutions that sustain capitalism be transformed in time to avert global catastrophe? If capitalism is allowed to continue as usual, then class polarization, demographic imbalance, and ecological destruction will lead us to collapse. What is clear is that with growing markets in Asia, the Middle East, and Africa, enlightened policies are needed to remake energy, technology, and governance before its too late.

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Do We Need Fully Automated Luxury Communism? - Forbes