ClimateGate: Weâ€™re once again chasing the wrong story.Â Itâ€™s not about climate; itâ€™s about energy, carbon, energy, jobs, energy and oil.
Following a rash of articles about the leaks of emails suggesting that climate scientists occasionally have doubts, we hear that some US senators are crowing, and the Wall Street Journal has announced the end of carbon markets. Itâ€™s rather like saying the Titanic is good enoughâ€“thereâ€™s no need for sufficient lifeboats.
Itâ€™s about carbon
Bob Preston, a portfolio manager for large financial firm for clients like the Craigmillar Equity Fund, has been investing in decarbonization for over ten years.Â And during that time he has beaten the Dow Jones by 1000 basis points on an annual basis.
â€œWe donâ€™t really need to know whether carbon dioxide (CO2) is causing the earth to warm because photons canâ€™t escape the atmosphere.Â The point is that we need to reduce the amount of carbon used to create energy.â€
He added that we are on a constant search to produce more energy per the amount of fuel used: Wood is 10 to 1 carbon to hydrogen; coal is 2 to 1; oil 1 to 1; and natural gas is 1 carbon to 4 hydrogen.Â He added, â€œWeâ€™ve been decarbonizing for over 150 years. Imagine trying to heat New York City with wood.â€
What kind of companies does he invest in?Â He has invested in a company that produces oxygen, which is used in a pre-combustion process with natural gas to improve efficiency. And he has invested in a company that makes the carbon electricity cables that efficiently transmit DC power from wind farms to the grid, reducing heat loss and increasing transmission rates.
Itâ€™s about jobs and innovation
The kinds of companies that Bob Preston looks for are the kinds that are being supported by the carbon markets around the world.Â The voluntary and the compliance (mandated by countries who have signed onto the Kyoto Protocols) markets that trade carbon credits and offsets, are creating financing for a whole new solar industry in Germany; help for developing nations to fund more efficient and productive farm programs while preserving forests; and demand for better batteries, more productive energy infrastructures, and new consumer driven energy efficiencies. These are the kinds of businesses that produce the good jobs needed immediately in traditional blue and white collar sectors.
Even China is getting on board, building a carbon neutral city in Dongtan, with plans for ten more. While much US media, such as USA Today, remains skeptical about whether they can meet their targets, the innovative technologies that they will create on the aggressive path to carbon neutrality will leave us in their wake.
All around the world new alliances between the public and private sectors are reimagining their economies, while we sit and argue that we donâ€™t need carbon markets because climate change might not be real.
Itâ€™s about oil.
Finally, it is always about oil.Â America spends more than $200,000 per minute on foreign oil â€” $13 million per hour. More than $25 billion a year goes for Persian Gulf imports alone, according to the NRDC.Â Itâ€™s become a cliche to talk about the fact that this is money going to countries who are not our friends.Â We now know that resources are not unlimited, and unless we find new ways to generate energy, we will be literally eating our own seed corn. With every temporary fixâ€“the discovery of new natural gas resources or the focus on carbon sequestrationâ€“we sigh with relief and think we can return to business as usual.Â The new technologies, whether they are renewable fuels, safer nuclear energy, a rebuilt infrastructure or new transportation alternatives, will not be cheap.Â We have been subsidizing oil for years; it is now time to create the markets that will combine public and private dollars to drive innovation for the future.
We need carbon legislation, and we need it now.
Pricing carbon creates a realistic cost for the fuels we consume, and the funds to support the new technologies, industries and businesses that will create the future in a resource constrained world.Â We are going to needâ€“in the United States and abroadâ€“a whole new approach to using and reusing all our raw materials, from energy, to water, and much more.Â If we think that we can keep borrowing against the future, then we are not in denial, we are sinful.
We have a choice now, but future generations will not unless we act now. Carbon pricing is a critical piece of an extremely important puzzle called survival.A Tana Kantor