Monthly Archives: April 2015

California: Time to Stop Soaking the Rich?

Compton, CA is a working-class town midway between LA and Long Beach. Daily water use in Compton comes to 63.6 gallons per person. That’s a lot more than in Sudan, or even Uganda. But a 45-minute drive to the east brings you to the wealthy community of Cowan Heights, where daily water use is a whopping 572.4 gallons per person. That’s nine times higher than Compton. Water is getting expensive in California, and the folks in Compton are feeling the pinch. Median household income is $42,335, about one-third of Cowan Heights, which clocks in at $125,556.

sprinkler1So here’s the question: Should a wealthy community making three times as much as its neighbors be allocated nine times as much water? Or clean air? Are there any things that should be allocated as God-given rights, not subject to market pricing?

Drought-parched California is making both towns cut back. Water-guzzling Cowan Heights residents will have to reduce by 36%, down to 366 gallons per day. Compton must cut back by 8%, to 59 gallons. Wow. Then the wealthy Cowan Heights will have 6 times as much water as its poorer neighbors.

Market economics have undoubtedly done wonders for many people in our country. But there was a time when conservatives and progressives alike agreed that some things should be allocated equitably to our world, not based on what the richest could pay. With California’s drought beginning to look something like the “new normal” in the American West, I’m not sure that “soaking the rich” is the best way to allocate life-giving water.

California's 4-year drought is likely to subside over time, but it is consistent with climate warnings for the  American West.

California’s 4-year drought is likely to subside over time, but it is consistent with climate warnings for the American West.

Are you?

And have you spent much time asking and praying about what your sacred scriptures teach about such matters?

 J. Elwood

Why We Doubt Science: Maybe We Know Enough Without It!

As anyone knows, climate change – or global warming – has become an amazingly controversial topic in America. This is especially true, it turns out, among communities that identify with Evangelical Christianity. It seems to matter little that almost all climate researchers agree that it’s happening, as a result of human activities; or that only an infinitesimal fraction of science journal papers question manmade climate change (one out of 2,258 in 2013); or that virtually all of the science academies of the Developed World have warned of the need for urgent climate action; or that a solid majority of Americans also accept these conclusions.

Despite all of this, only 49% of white American Evangelicals accept the scientific consensus that the Earth is warming due to human activities, according to a Public Religion Research Institute survey conducted in 2014. Indeed, of all religious categories surveyed, white Evangelicals were the least concerned about climate change. Not surprisingly, we Evangelicals help vote into office politicians who also ignore all warnings about climate change, effectively blocking global action to address the problem.

In the face of overwhelming evidence, why do we continue to doubt? And with the cacophony of cries from the global victims of drought, flooding and sea-level rise, why do we resist compassionate action? For years, this question has been repeated as a matter of rhetoric, or anguished outbursts from activists. But recently, behavioral scientists have turned the tools of science toward the phenomenon of climate denial. Yes, old science v. faith narratives may play a role; and yes, corporate-funded “think tanks” and politicians may sow doubt as they did during the Tobacco Wars.

But it’s beginning to look like there is much, much more going on in human minds, which makes climate inaction – from Evangelicals or anyone else – much more likely. Today, we address a surprisingly overlooked truism: We all feel like experts about weather.

We Feel Like We know

You’d think that dire warnings from experts would catch our attention, wouldn’t you? If more than 97 percent of structural engineers warned that a bridge was unsafe to cross, we’d find another way around, wouldn’t we? If a similar majority of oncologists told us we had cancer, we’d almost all seek treatment.

So, why do we doubt the warnings of climate science? There may be parallels between structural engineering and cancer diagnosis, on the one hand, and climate science on the other; but there are also differences. And one key difference is this: In a field normally dominated by technical specialists, weather events appear to be well within the range of laypeople’s personal expertise. We might be in no position to judge the levels of trace greenhouse gases in the atmosphere, or sea levels, or the extent of glaciers, but we all think we know about the weather.[i]

In February, the East was frozen, while the West sweltered

In February, the East was frozen, while the West sweltered

And what we know about the weather is informed by what we’re experiencing, right here, and right now. In June 2013, President Obama took to an outdoor stage at Georgetown University in a brutal summer heat wave to announce his climate change plans. Virtually everyone who sweltered with him seemed to agree with his perspective. On the other side, early this year, Senator James Inhofe (R-OK) tossed a snowball onto the Senate floor in an unseasonably cold winter, ostensibly as justification for his unrelenting opposition to climate action. Again, to some, the severe weather seemed to justify the senator’s conclusion.

Of course, when we stand back to examine these episodes, we can agree that the local weather on any particular day has little or no bearing on global climate trends. But research shows that we seldom actually think that way. In 2013, researchers at the University of New Hampshire proved it. In a survey of 5,000 voters, they found that on especially warm days, 70% of Independents in New Hampshire affirmed belief in human-caused climate change. On unseasonably cold days, the number dropped to 40%.[ii]

So whatever we think about Sen. Inhofe’s snowball antics, the research shows that his reaction may be closer to home than we might like to admit. For many of us, whether we take climate change as a serious concern may depend on whether it’s hot or cold outside, right here, right now.

If this is true – and it seems to be – the planet’s weather systems have played a cruel joke on humanity in the past year. Global politics are dominated by the one remaining superpower – the U.S. – and the U.S. is heavily influenced by its densely populated Eastern states, with major cities like New York, Washington, Boston and Atlanta. And the East has spent all winter and spring in the grip of unrelenting cold – a consequence of the chaotic “polar vortex” that has attracted so much attention in recent years. Virtually the whole world is seeing abnormal heat, but we’re still very chilly.Picture2

And the data suggests that if we’re feeling chilly, then we’re likely to ignore the heat that’s becoming the norm everywhere else. Because, after all, we all feel like we understand the weather pretty well. It’s not rocket science, or cancer research or anything. Or maybe it is. Or at least, maybe we should consciously remind ourselves that there are better ways to learn about what we’re doing to our Father’s world than looking out the window.

Of course, it’s vital that we do so. Because by the time our local weather leaves no more doubt in our complex minds, it may be too late to save many people and other creatures from the ravages that science is warning us about.

J. Elwood

[i] From Marshall, George; Don’t Even Think About It; p. 13; Bloomsbury Press

[ii] Hamilton, L.C., Stampone, M.D. Blowin’ in the wind: Short-term weather and belief in anthropogenic climate change. (2013) Weather, Climate, and Society, 5 (2), pp. 112-119.

Oh, Canada! An Earth Day Lament

Today is Earth Day. I’m not marching, or celebrating, or even planting a tree (my latest dozen hazelnuts haven’t arrived yet). But I am sending you a sobering article from Sojourners Magazine on abusive and unjust mining practices worldwide by Canadian companies.

Last year, I spent a week in Fort McMurray, the heart of Canada’s tar sands petro-state of Alberta. I reported the horrors I saw there in several posts (see here, here, here, and especially here.) And while I lamented the poisoning and cultural genocide of peaceable First Nations in Alberta, I also mourned the apparent transformation of Canada from a relatively peaceable steward of its land and people, to a cynical state committed to the destruction of God’s most precious gifts for the enrichment of the powerful. I felt like I was watching the movie “Avatar,” but in real life — with real children, parents and elders as the real victims.

downloadNow, Rev. Emilie Teresa Smith, a Canadian Anglican priest, has detailed horrifying accounts of Canadian mining companies exploiting and poisoning the poor in less-developed countries. “What? Canadians?” she asks. “We’re supposed to be the good guys in the story. Well, not anymore.”

Please, read Rev. Smith’s article (and consider subscribing to Sojourners while you’re at it!). And for meditation and thought on this Earth Day, here’s the way she concludes her article:

“The Earth is not a thing to be bought, sold, used and destroyed. Our eternal connection to the dust is that we are dust. We are not the Creator, but frail creatures, utterly dependent on the care of the Earth, her mountains, her water, streams and deepness underground. As the psalmist reminds us, the Earth is not ours, but God’s; we live with tender mercy and grace upon her abundant belly.”

I pray that you are blessed this Earth Day, and are looking for new ways to tend and keep the garden in which God has placed you.

J. Elwood

Fossil Fuel Divestment: Good Ethics & Good Earnings

Socially responsible investors today face a paradox: They are setting aside savings today for a brighter, more secure future for themselves and their children. But some of the companies in their 401k’s or mutual funds actually present a dire threat to that future and those children. If they attempt to divest, investment managers will normally warn that they can expect lower returns, or greater risks. So how much does an investor have to give up for the sake of a livable future?

When it comes to fossil-fuel divestment, the answer seems to be – nothing at all. A new study has shown that there is no significant difference whatsoever in long term risks and returns between comparable portfolios which include fossil fuels, and those which don’t. And if that’s true, it’s great news for ethical investors, university boards and foundation managers.

The movement for fossil-fuel divestment has been sweeping the country in recent months. Foundations like the Rockefeller Brothers have divested. So have sovereign wealth funds like Norway; cities like San Francisco, Portland and Seattle; and universities like Syracuse, Stanford and the University of Maine. Last year, Union Theological Seminary in New York also divested, leading the way among Christian and religious institutions.

Placekeeper

Carbon emissions threaten to break 2-degree threshold

Their logic is simple: To avoid major ecological collapse around the world, we need to take serious steps to keep planetary warming to within 2 degrees Celsius above pre-industrial levels, or bear the impact of major ice-sheet collapse and sea-level rise, and climatic disruptions resulting in widespread hunger and accelerated species extinctions. Worse, passing the 2-degree threshold exposes the world to the risk of positive feedback loops, which could drive runaway warming beyond 4 degrees, with imponderable consequences. And virtually everyone agrees that the poor will be hit first and hardest.

The scientific consensus tells us that to remain within the 2-degree threshold, we must limit total additional global carbon dioxide emissions to 565 gigatons from here forward. However, major coal, oil and gas companies today own fossil-fuel reserves which – when burned – would produce 2,860 gigatons of carbon emissions – or more than five times the maximum that can be permitted globally. Furthermore, fossil-fuel companies invested $674 billion last year to discover even more carbon reserves, none of which can be produced without further severe harm to the Earth and its living creatures, including mankind.

So, if the scientific consensus is correct, fossil fuels would be a terrible thing for an ethical investor to put money into. Perhaps it’s obvious: An investor in these companies can only hope that these carbon reserves will in fact be sold and burned, and that those billions invested in further exploration will uncover even more reserves which will also be burned. By extension, this investor can only hope that the global carbon budget will be blown through many times over — an outcome that will assure that his or her children will inherit a world facing runaway climate disruption. From this perspective, there is virtually no better or worse fossil-fuel company: their fundamental business model requires them to do something that will bring calamity on others and on the entire creation.

If investors place any credence in science, if they think about the known facts, if they have any concern for the earth and for others, they won’t want to invest in these companies.

Okay then. But how much will it cost us to be ethical? Well, if you’ve been following the debate, you’ve seen some confusing numbers. The fossil-fuel proponents have produced reports going back 50 years which show that you’ll make more money if you stick with them. Climate activists have relied on numbers over the last ten years showing that you’ll do better if you divest from carbon-polluting energy. I have no reason to doubt the accuracy of either of these studies, but they’ve carefully chosen their timeframes. The former group places a lot of stock in the golden age of oil, back when I was a kid. The enviros like to focus on the new era where we all know what carbon pollution can do.

So I was delighted to find a report issued by Advisor Partners, a research firm that provides portfolio design information to investment professionals. The report traced investment performance for the Standard & Poors 500, which includes fossil fuels, and compared them with a fossil-free version of the same portfolio over a 25-year period, from 1989 to 2014. Twenty-five years is long enough to span several cycles – including oil booms and busts – but not so long as to include largely irrelevant ancient financial history. And they are clearly not trying to prove a point for anyone.

But the findings are striking: over twenty-five years, both the S&P 500 and the fossil-free alternative generated virtually identical returns in aggregate. There is no difference. If you had divested from fossil fuel stocks in 1989, by 2014 you wouldn’t have been richer, and you wouldn’t have been poorer. Period.

Over shorter timeframes, the report found that the fossil-free investment portfolio varied from the S&P 500, but these variances canceled each other out over time. In the 1990’s the fossil-free portfolio did better. In the first decade of this century, the S&P 500 did better, as oil prices skyrocketed. Since 2010, the fossil-free index did better again, as oil prices fell again. In aggregate, there’s been no difference.

But investors also care about volatility – how much an investment rises and falls from day to day compared to broad market averages. Surprisingly, here again the fossil-free index held up remarkably well. On average, the “divestment portfolio” moved around 1.07% more than the S&P 500. For every dollar of fluctuation (up or down) in the S&P index, the fossil-free portfolio moved an extra penny. I never would have imagined this small a difference. If an investor has a very short time horizon, then maybe all volatility is bad. But the difference is so little that most investors should hardly ever notice.

So, ethical investors, doing the right thing may be easier than you imagined. Your 401K, your alma mater, you church or your city may be able to divest from fossil fuels with the confidence that their morals and their prudence are not in conflict, as they might have feared.

It’s often costly to do the right thing. In this case, the numbers tell a different story. You don’t have to choose between your retirement and your kids’ world. You can hold fast to your good ethics, and still make good money.

That’s good news, no?

Action: For more on fossil-free investment resources, please see our recent post on available options; or visit 350.org’s divestment website for a wealth of useful information.