phill Parsons
The government just doesn’t get it, elect one that does.
TIM Flannery, Australian of the Year, has wondered how long coal will remain a socially acceptable fuel due to its strong links to human induced global warming.
Coal miners wonder what their future will be, both after this election and later into the century, as the Australian coal industry moves to reposition itself.
Doubtful it is that they wish to have the reputation of Exxon Mobil who with their position as climate change deniers have become known as the Death Star’ among critics.
“Corporate citizenship means understanding and managing a company’s influence on society and all its stakeholders. Good corporate citizenship integrates social, ethical, environmental, economic and philanthropic values in the core decision-making processes of a business.”
And here can be seen an arising a dichotomy for the coal mining and coal burning industries. Gone is the smog and acid rain that could be addressed by expenditure in pollution control. After some resistance the industry was forced to clean up, its power outweighed by the popularity of change among voters.
Now we have the calls of the industries supporters for the retention of coal, it being central to the Australian economy as a source of energy and export income, against the outcome for not reducing carbon emissions by 80% or more.
Let’s deal with the export income argument. Exported Australian coal is lower in carbon than some of the coal of importing countries domestic product. However, the largest customer, Japan, has small reserves of this fuel.
Whilst this relatively low carbon content is an excellent case for continuing exports, if at the same time those exports threaten the future of the globe then the conflict inherent in protecting Australia’s national interest need resolving. Here is where joining Kyoto and establishing a mechanism for global change to a low carbon economy in the second round of Kyoto is essential.
Howard knows this but has mounted his steed, Hubris, and as yet cannot find the dismounting step.
And to achieve credibility here and also protect the domestic and export coal industries Australia will have to act honestly to change over to a low carbon economy.
The pace of that change may be arguable, but start we must. Finishing the project may be put off over a number of electoral cycles, but this needs to be viewed against the risks of dangerous climate change addressed in the Fourth Assessment Report [AR4] of the Intergovernmental Panel on Climate Change.
Even the coal miners union, the CFMEU, can see the need for change.
Lets take for an example the lauded fall in predicted sea level rise to 2100. Some may take the view that it is pointless looking beyond 100 years. Too far ahead, never done that before, etc. Well here it is from AR4, third dot point on lucky page 13
Contraction of the Greenland ice sheet is projected to continue to contribute to sea level rise after 2100. Current models suggest ice mass losses increase with temperature more rapidly than gains [in the ice mass] due to precipitation and that the surface mass balance becomes negative at a global average warming (relative to pre-industrial values) in excess of 1.9 to 4.6°C.
The Best Estimate of temperature rise for 5 of the 6 models in AR4 exceeds the 1.9dC miminum. All models Likely Range maxima exceed 1.9 with 2 models minima also exceeding that. 2 models maxima exceed the top of the above quoted range of 4.6dC
If a negative surface mass balance were sustained for millennia, that would lead to virtually complete elimination of the Greenland ice sheet and a resulting contribution to sea level rise of about 7 m. The corresponding future temperatures in Greenland are comparable to those inferred for the last interglacial period 125,000 years ago, when paleoclimatic information suggests reductions of polar land ice extent and 4 to 6 m of sea level rise. {6.4, 10.7}
That’s the sea level rise that Al Gore and Bob Brown have taken criticism for predicting. There it is in the report. Cause – business as usual energy use by the global community putting in place a new temperature regime, a permanent alteration to the climate.
And here is the prediction for Antarctica, made without the most recent data from studies by the British Antarctic survey that predict 1.5m sea level rise contribution by 2100.
Dynamical processes related to ice flow not included in current models but suggested by recent observations could increase the vulnerability of the ice sheets to warming, increasing future sea level rise. Understanding of these processes is limited and there is no consensus on their magnitude. {4.}
Current global model studies project that the Antarctic ice sheet will remain too cold for widespread surface melting and is expected to gain in mass due to increased snowfall. However, net loss of ice mass could occur if dynamical ice discharge dominates the ice sheet mass balance. {10.7}
So we have the data before us for the Good corporate citizens to consider.
What about the other side of the corporation, the shareholders.
These are the individuals and companies, such as superannuation fund, banks and equity investment companies, that are looking for a return commensurate with risk and have to date seen coal as blue chip, but are now facing the possibility that the hand that feeds also has a negative that will bite off the value in their other bundles of money.
The individual investor may be beastly careless, wealth for them having no impact on a corporate body with responsibility to itself or its members through time, the individuals interest ceasing with their death.
This is not so for institutional investors, they are now faced with a dilemma.
Are high carbon fuels such as coal, that are damaging the climates capacity to provide the environment that underpins returns from other investments, such as in agriculture, forestry, tourism, retail, commercial properties, ports and even mining, actually sustainable investments given that continuing on a business as usual path takes all economies at least into the area of increased costs to adapt to and mitigate dangerous climate change.
This cost has been predicted by Stern to be in the order of 20% of GDP per annum. For Australia that $126B downturn in the economy or twice the value of the income from coal in current terms.
Yes, there it is folks, the balance between cost of continuing and closing the coal industry down is only half way to the estimated cost of dangerous climate change. If we are unable to arrest global heating then we will pass the value of the coal industry only part way to the annual cost predicted by Stern and this is well below the disaster predicted by Lovelock.
Lovelock is the scientist who described the interlocking nature of the earths natural systems.
And at what point does the cycle of heating become irreversible, is it the 1.9dC point, the 4.6dC or somewhere in between. No one can give that figure or indeed assure us we have not passed some tipping point already. Earth has not seen the current level of atmospheric CO2 for 650,000 years; the paleontological record is not there for us.
So with this type of risk how should a prudent investor react
Leaving aside those Tomas Rignoli likes to criticize for driving about in old cars whilst expressing a desire for change, their supposed hypocrisy – those whose income makes them prisoners of the economy, lets look at those with some discretion in their expenditure, for example, those saving to become superannuants and those who manage others investments.
With the evidence presented by AR4, each investor should now consider the impact of their investments carbon footprint. This footprint will impact on their investments in a way that will endanger their investment. They must decide the degree and the risk.
How should government act to manage rights and risk
Where to start, perhaps with the basis of the liberal western democracy’s view of basic Rights.
Right to Life
The right to life is the fundamental right, of which all other rights are corollaries. The right to life states that you own your own body. It is your property to do with as you please. No one may force you to do anything, no one may injure you in any way, and above all, no one may take your life (without consent.)
Right to Liberty
The right to liberty is a part of the right to life, specifically referring to your freedom of action. You may do what you want, when you want, provided you don’t trample on the rights of anyone else. This is a necessity for man’s life because man’s means of survival is reason. Survival by reason requires that you are able to act upon your reason otherwise your reason is of no avail. You can only act on your reason if you are free from the coercion of others.
If society were to permit some actions and not others, it would be permitting some reason and not other reason. It would be effectively destroying individual reason by making reason second place to some other standard. When a society prevents its citizens from the initiation of force, however, it is not circumventing reason, because there is never a reason for the initiation of force.
Right to Property
Property rights are an extension to the right to life. In order to support yourself through reason and stay alive, you must be able to own and use the product of your labor. If the tools of your survival are subject to random confiscation, then your life is subject to random destruction.
Here, at the philosophical base is the right to use you’re reason and life to accumulate property. I am sure that the vast majority of owners of the fossil fuel industry in the Western world support this view in theory.
The corollary of these rights are the responsibilities to “no one may injure you in any way, and above all, no one may take your life (without consent.)” and “You may do what you want, when you want, provided you don’t trample on the rights of anyone else” and’ If the tools of your survival are subject to random confiscation, then your life is subject to random destruction”
In each of these Rights is an inbuilt protection for the rights of others and thus all rights.
Now, if we as a community of persons are to be injured or possibly killed (without consent.) by the impacts of dangerous climate change, the tools of our survival (including the environment0 to be randomly confiscated (without adequate compensation) thus having our liberties trampled upon by dangerous climate change then the philosophical principles for intervention by government in a democracy are in place.
These are the actions that go beyond the individual making a choice to emit or not to emit carbon into the community. Government must now manage carbon emissions to avoid dangerous climate change in the interest of everybody’s rights
Failure to act is a dereliction of the government’s duty. The consensus is that carbon emissions are best stabilized so they remain below 450ppm but it may be possible to recover from an increase halted at a maximum of 550ppm.
Of course, the actions proposed have to measured by the electorate. Are they comprehensive, will they be effective and within time.
And then we come to the Company, an organized body treated in law as a natural person.
These are managed by Directors who have to act in certain prescribed ways.
“A director must ensure that his or her acts are undertaken in the interests of the company and not for his or her interests or for the interests of any third party; directors should bear in mind the potential conflicts between their own interests, the interests of shareholders and the interests of the company and they should remind themselves that, in acting as a director, they are responsible for acting in the company’s best interests.”
This must be a most difficult conflict for a coal company executive. Clearly it is not in the companies interest to shutdown but it is also not in the companies interest to destroy its own property or the life, liberty and property of its shareholders, or indeed its customers, by continuing as though there are no consequences.
For other companies investing in coal, such as banks, the choice is singular, they must fund measures that phase out the emissions of coal to the degree that they are damaging the climate dangerously or divest themselves of their holdings in dangerous climate changing activities. National boundaries do not apply.
For companies not so tied they should immediately walk away from energy that emits carbon to other sources of energy. No waiting or delay, it is not in the interests of their companies to hold onto fossil fuels any more.
“Directors have both a fiduciary and a statutory duty to act in the best interests of the company and not for personal gain. As noted above, the company’s best interests need not be the same as those of its shareholders (including any holding company). The directors have a duty to ensure that transactions entered into by their company are for the benefit of the company and are entered into for good cause”
What better interest than survival of the company. Below that singular interest is avoiding the costs that will come with dangerous climate change.
For a view of the level at which the costs become unaffordable read lovelock, The Revenge of Gaia to discover how close that is and thus the need for dramatic action to stabilize the level of carbon in the atmosphere.
Now back to those coal company directors difficulties.
“Directors of a public company have a duty to ensure that statements in a prospectus or other similar document are not misleading and that there are no material omissions from such a document”
Here must be a most painful position for a coal company, it now has to advise potential investors of the impact of its emissions. This will require special drafting to address the responsibility above and avoid being misleading and thus being personally liable.
“Directors may be personally liable for any mis-statement made which has caused loss to a shareholder unless the director is able to show that he had reasonable grounds to believe that the statement was true.”
Further, they will have to advise on the costs to the company of addressing the impacts of their emissions.
And so now to ‘barking mad’ Bob Brown
Well its 100% clear, 9 out of 10 chances that human activity is responsible climate change and continuing on the business as usual path will be disastrous. If you have trouble believing it then study AR4.
Nobody knows with certainty the path to dangerous climate change, at what point we have to adjust and by how much, only models and advice from AR4 that we reduce carbon emissions to stabilize atmospheric carbon below 450ppm by volume within 43 years.
AR4 has 6 models that involve not only the data about the climates behavior but also cover a range of options that the various competing national interests may, or indeed may not, adopt to avoid dangerous climate change. E.g continuing population and carbon emissions growth. It is not simply a matter of turning off a tap, many values also have to change in this short time.
The latest data indicates that changes in the rate of accumulation of carbon in the atmosphere is ramping up reducing time available before we pass 450ppm to 26 years and that land mass ice is melting faster than predicted in AR4, possibly making a nonsense of that modeling through negative feedbacks and thus any action predicated on its findings may fall short of sufficient. [Comprehensive, effective and timely]
3 years may be a short time to plan to phase out coal as a fuel for energy production in Australia and ceasing coal exports may indeed be negative in relation to emissions growth as the importers turn to dirtier coal.
However, the time at which a measure like the rapid response Brown has proposed has to be taken to avoid a total catastrophe it will very likely be too late to avoid that catastrophe.
We have a very small and rapidly closing window of opportunity. Contrary to the view of some it does not remain open to 2100, nibbled at by each nation every electoral cycle for those that have one, national interest leading us in an increasingly wild ride to catastrophe.
Development of a plan to reduce emissions by 80% and implementation over a time frame that involves several decades may be achievable, it may take 40 years. Further delay on actual reductions in emissions is intolerable. In the next 13 years we are advised by the experts that global carbon emissions will have to be reduced by 30%.
It is a test of the sincerity of government to avoid dangerous climate change that those seeking the role of government offer such a plan.
Any thing else will see Australia go through events like these
+2.4°: Coral reefs almost extinct
In North America, a new dust-bowl brings deserts to life in the high plains states, centred on Nebraska, but also wipes out agriculture and cattle ranching as sand dunes appear across five US states, from Texas in the south to Montana in the north.
Rising sea levels accelerate as the Greenland ice sheet tips into irreversible melt, submerging atoll nations and low-lying deltas. In Peru, disappearing Andean glaciers mean 10 million people face water shortages. Warming seas wipe out the Great Barrier Reef and make coral reefs virtually extinct throughout the tropics. Worldwide, a third of all species on the planet face extinction.
And if it is possible to imagine; worse
+3.4°: Rainforest turns to desert
The Amazonian rainforest burns in a firestorm of catastrophic ferocity, covering South America with ash and smoke. Once the smoke clears, the interior of Brazil has become desert, and huge amounts of extra carbon have entered the atmosphere, further boosting global warming. The entire Arctic ice-cap disappears in the summer months, leaving the North Pole ice-free for the first time in 3 million years. Polar bears, walruses and ringed seals all go extinct. Water supplies run short in California as the Sierra Nevada snowpack melts away. Tens of millions are displaced as the Kalahari desert expands across southern Africa
And with ongoing delay in action worse and worse and worse.
These are not the scenarios of extremists or zealots. They are the considered opinions of the scientific community involved in studying climate change forced by unbridled human activity.
+6.4dC
It may be hard to imagine the Earth where warming seas lead to the possible release of methane hydrates trapped in sub-oceanic sediments and methane fireballs tear across the sky, causing further warming.
That the oceans could lose their oxygen and turn stagnant, releasing poisonous hydrogen sulphide gas and destroying the ozone layer seems far fetched.
Deserts extending almost to the Arctic is like science fiction.
“Hypercanes” (hurricanes of unimaginable ferocity) circumnavigating the globe, causing flash floods which strip the land of soil seem impossible.
Humanity reduced to a few survivors eking out a living in polar refuges. Most of life on Earth has been snuffed out, as temperatures rise higher than for hundreds of millions of years.
These are predictions that the high end of the danger we face holds for us. We have no experience of such an inferno. However we have been advised by the experts.
Admittedly it is at the highest end of continued growth in fossil fuel energy use and population.
It may not arrive if we act to phase out fossil fuels, but do you want to pass through the lower temperature, such as the 4.0dC median of the business as usual model and the associated changes because of government and industry collusion to find that there is nothing that can be done to stop a steady decline to the above except stop all fossil fuel use immediately.
And such an action taken too late may not work, the globe having passed critical turning points and positive feedback mechanisms leading us inexorably to an Old Testament style biblical end.
Brown may be portrayed as out of step in his call to phase out coal. Those who have failed to pay attention to climate change and delayed leading us away from that danger by a series of steps have made the actions we take more costly. Continuing on this path increases risk and cost.
It may be that they continue to delay and dissemble us to unaffordable costs and unbearable suffering by doing too little too late.
Taking 3 years to plan and then moving to cease using coal will seem a missed opportunity the costs of which we will find unbearable if we fail to act now and the higher end of the modeled changes comes to pass.
phill Parsons climate change management advocate awaits the discovery of the responsibility of directors in relation to carbon emissions. The advice is now there.
It may indeed be one of the drivers of Richard Bransons offer of a prize to someone who develops a hyper plant, a solar powered carbon scavenger that stores its residue as congealed carbon, preferably burying it underground following a symbiotic system of breakdown and enriching soil at the same time.
