Appropriate Civilization versus New Despotism, month 3, 21st March – 20th April 2017

 1. Climate action: Trump endeavours to dig a little coal 

President Trump moved to dismantle President Obama’s climate legacy with an executive order that seeks to dismantle the Clean Power Plan. Within a week, 17 US states filed a legal challenge. China immediately pledged to uphold its Paris climate commitments, including considerable efforts not to use coal, accusing the US of “selfish” behaviour. The EU joined the pushback. Miguel Árias Cañete, the EU’s climate action commissioner, said: “The continued leadership of the EU, China and many other major economies is now more important than ever. When it comes to climate and the global clean energy transition, there cannot be vacuums, there can only be drivers, and we are committed to driving this agenda forward.”

Fine sentiments. But whereas China can point to policies consistent with its rhetoric, unfortunately the same cannot be said of much EU national policymaking, as things stand. Among EU states, only Sweden, Germany and France are pursuing goals consistent with the Paris target of 40% cuts in carbon emissions by 2030, according to a study by Carbon Market Watch. As ever, much will depend on industry, and one encouraging development this month was a pledge by Eurelectric, a trade body which represents 3,500 utilities with a combined value of over €200 billion, vowing no new investments in coal plants after 2020. Among the 28 EU countries, only Polish and Greek companies did not join the initiative.

2. Energy transition: Fast, but not fast enough

Record new renewable power capacity was added in 2016, UNEP figures showed: 138 gigawatts of it, up 9% despite investment falling by a worrying 23%. Renewables now provide 11.3% of global electricity. New global solar capacity outpaced wind, IRENA reported, by 71 to 51 gigawatts. Solar in California exceeded 50% of supply, for the first time ever, causing a net market oversupply resulting in a short interval of negative wholesale prices.

Costs of renewables keep falling. GTM Research predicts that solar will drop below two cents per kilowatt hour in 2017. Offshore wind is the latest renewable to defy predictions. EnBW and Dong won offshore wind tenders in the North Sea with the first subsidy-free bids. Moody’s reported that wind is now cheaper to install new than coal is to operate in 58 power plants across 15 Midwestern states, at $20 a megawatt versus $30. Trump told a rally in Kentucky that “the miners are coming back”. But they aren’t. Not even top US coal boss Robert Murray expects that, in the face of real contemporary economics.

As for US renewables companies, they were professing this month that their industries will thrive even without the Clean Power Plan. Their confidence is rooted in record solar installation and above average wind installation in 2016, plus federally agreed tax credits that would be difficult for the Trump administration to dismantle.

The news was also broadly good for EVs this month, with Tesla meeting production targets and its shares soaring to an all time high, for a while making it the most valuable car company in America. Meanwhile Big Oil, facing predictions of significant demand destruction by EVs within just years, is struggling to break even. Most of the oil majors didn’t even cover their costs in 2016, a Wall Street Journal analysis showed, despite a rising oil price. Some oil companies say American shale will help save them. But of the three main oil-producing shale belts, production has already peaked in two.

The oil industry loves to taunt its critics with the mantra that “peak oil is dead”. For some players, it is clearly not the case. Mexico’s proved oil reserves have declined by more than a third since 2013. This month its National Hydrocarbons Commission country warned that the country will run out of oil in less than nine years if there are no new discoveries.

What an incentive fast oil depletion like that must be to build a clean-energy economy fast, never mind climate change. (More on this in my keynote to the MIREC renewables congress in Mexico City on 10th May). And there are many other stand-out non-climate incentives around our troubled world, from air pollution to risk of stranded assets. But new figures showed that clean energy investment dropped 17% in the first quarter of 2017.

3. Tech for Good: Evidence of effort

Advances in artificial intelligence and robotics outpace even those in clean energy, and continue to be used in many ways for the betterment of society. But evidence that they have profound downsides was everywhere this month.

YouTube and Google’s use of algorithms to automatically match ads with content is the basis for widespread criticism that they fed the spread of fake news in the crucial months running up to both the Brexit vote and Trump’s election, much of it orchestrated by a well organised nationalist-right dark-propaganda network. The two companies ran into further, related, trouble, with big name advertisers boycotting them for posting ads next to racist and other offensive content. The boycotters included such diverse actors as AT&T, the BBC, the British government, PepsiCo, Starbucks, Verizon, and WalMart. Google responded quickly, saying it was in a race to ramp up its AI capability to deal with the problem. But that is no easy task. Nobody has pulled off such a feat of megadata sifting before. As part of their effort, they have begun to use outside firms to verify ad standards.

They might want to hurry. The inventor of the web, Tim Berners-Lee, argues that concentration of power over information, such as Goggle and Facebook now possess, is dangerous for society. He is plotting, with others in the Decentralized Information Group at MIT’s Laboratory for Computer Science and Artificial Intelligence (CSAIL), means to decentralise control of data in his creation.

The threat AI and robotics pose to jobs becomes ever clearer. More than 10 million UK workers are at risk of being replaced within 15 years, PwC calculated, some 30% of the workforce. The IPPR estimates a similar figure: robots replacing 1 in 3 UK jobs over the next 20 years. A report by the US National Bureau of Economic Research goes further, suggesting that large numbers of jobs have already been lost to robotics in America, and are unlikely to come back. Wages have been depressed in the process, they contend.

The question arises, then, as to how much this has been fuelling populist rage, on both sides of the Atlantic, making it easier for nationalist demagogues to push their argument that “the other” – immigrants and anyone else who is not in what psychologists call their in-group – is entirely to blame. Whatever the answer to that question about the past, the additional stress just around the corner will clearly pose a dire threat to social cohesion if nothing is done. The imperative for government and business to act is obvious.

4. Truth: Liars under growing scrutiny

As investigations into the conduct of the Trump election and the Brexit vote continue, it becomes ever clearer that the nationalist right is capable of extraordinary feats of voter manipulation. A group of UK academics warned this month that dark money is a threat to the integrity of British elections. The Electoral Commission is investigating whether work by Cambridge Analytica, one data firm at the heart of the controversy, constitutes an undeclared donation from an impermissible foreign donor. Cambridge Analytica is majority owned by the hedge fund billionaire Robert Mercer, a major bankroller of Donald Trump. Steve Bannon, Trump’s head of strategy, has been a major player in the development of the company and its capabilities. Filings of White House staffers’ interests this month show he has made millions shaping right-wing thought, via Cambridge Analytica and other organs.

The pushback unfolding against this fast-emerging Orwellian narrative is often extraordinary to behold. The Los Angeles Times published a series of  essays by its editorial board this month. “Our Dishonest President”, the first was entitled. “Why Trump lies”, the second. They read like a science fiction novel of a dystopian future society. But they are about real-life America, today.

New arenas of corporate responsibility are being stimulated, unsurprisingly. Google announced it will begin to display fact-checking labels to show if news it purveys is true or false. Facebook gave a green light to its employees to protest against Trump on May 1st. Dramas build slowly in the courts as truth and lies compete. A judge rejected Trump’s defense against a claim he incited violence at one of his rallies.

5. Equality: Talk of cutting aid as famine rages

Meanwhile, though you would hardly know it from mainstream media coverage, we are in the midst of the gravest humanitarian crisis since 1945 – since the creation of the United Nations. 20 million people face starvation and famine in Yemen, Somalia, South Sudan and Nigeria, the UN warns. Drought has descended on Kenya, triggering violence as displaced peoples migrate.

Amid all this, populist nationalists continue to contend that aid budgets should be cut. The UK government, to its credit, is resisting this so far.

As for the considerable potential role of clean energy in building equality and alleviating poverty, an international gathering of the Sustainable Energy for All organisation in New York this month called for more urgent action on progress towards global energy goals. In SolarAid, my colleagues and I could not agree more. Our work is based on the fact that if you burn oil in a kerosene lamp in Africa and it will cost you almost $80 a year, yet a solar lamp retailing at around $5 will give clean light for free, for 4 years. So if you were one of the poorest people in Africa, which would you rather do? Save $70 a year to spend on food and other essentials, in a time of famine, or burn a fistful of ten dollar bills each year, and risk your health breathing the fumes? This should be an obvious starting point for a massive programme to free up local money for the necessities of poverty alleviation, SolarAid contends. But sales of the most affordable of these lights are actually falling in Africa, and in fact the rest of the world too. In Malawi, for example, we are one of only a few organisations working to help. More on that subject, a microcosm of global challenges and opportunities in energy, in an e-mail in a week or so.

6. Reform of capitalism: Graphic evidence of the need

The Bank of England has admitted to fearing, in the current febrile financial climate, that it may not be able to spot the next global crisis coming. Few who studied the forensics of the last one, and the response – or mostly lack thereof – can be surprised. There are obvious candidates for a trigger in the inflated stock market, and mountainous debt in car loans, credit cards, and mortgages. The Brexit gamble is also potentially on the list. The IMF professes that its unpredictable outcome poses a risk to global stability.

Given the fact that regulators regard another crisis as inevitable, and see an unreadable multiplicity of potential paths to it, who can realistically contend that the unbridled 21st century version of capitalism is anything close to a satisfactory way to run a global economy today?

Root-to-branch reform might take some mapping, but starting points are not too difficult to find. One involves the jailing of executives guilty of gross corruption. Until this starts happening, how there can be hope for wider reform, or the necessary adjustments of cultures? Shell offered up a perfect example this month. The company is under investigation for one of the most corrupt deals in the history of the oil industry.  E-mails show that top executives handed a billion dollars to the Nigerian government, knowing it would be passed to a convicted money-launderer,  in return for a giant oilfield. The CEO of the day, Peter Voser, knew of the deal. The current CEO, Ben van Buerden, described the evidence in e-mails as “really unhelpful”, but “just pub talk.”

One might hope that if the forces of the law cannot sort out behaviour of this kind, then investors might be queuing to punish a company as wide of the ethical mark as this using their money and governance power. Not on recent evidence from Wall Street. The social media company Snap, owner of a popular photo exchange website, went public in February with investors queuing to pour cash into it. This despite the twenty-something co-founders specifying that investors would have zero voting rights. Far from failing, in the exodus of financial custodians that this dangerous first-of-a-kind should have been faced with, Snap raised $3.4 billion and achieved a valuation of $19.7 billion.

What a gloomy precedent this now sets for the future. It raises the prospect, in principle, of a small cadre of almost unregulated and unconstrained tech billionaires calling the shots on how the AI and robotics innovations of the next few years are deployed. We had better all hope, if this is the way investors and regulators allow events to unfold, that said billionaires, and investors in them, are not friends of the the populist nationalist right. Yet the way financiers were lining up to engage with Marine Le Pen as the French Presidential election neared suggests we can far from rely on this.

7. Common security: If you elect nationalist demagogues, you will be more likely to experience World War 3

Let me be brief on this final point. In the Trump administration’s handling of Syria and North Korea, where is there any evidence at all of basic statesmanship? Of rudimentary strategy even? Of any thought that there might be lessons to be learned in decades of diplomacy? Ahead of the election, Trump seemed to grasp the inadvisability of poking a hornets nest with a stick, let alone many millions of dollars worth of cruise missiles. “Again, to our very foolish leader”, he tweeted at Obama (all in capital letters), “do not attack Syria – if you do many very bad things will happen.”

Suffice it to say that one particularly bad knee-jerk reaction from Trump and/or those he turns into his adversaries, and all bets are off on the balance of play I endeavour to summarise above.

A message for my senior grandson, if he made it this far in this blog. Sorry fella, I have been trying for a quarter century. But I and all the people like me have pretty much failed, to date. Hopefully there is some comfort in the thought that we are still trying.

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Appropriate civilization includes environmental balance, sustainable capitalism, empathic societies, racial and religious harmony, poverty alleviation at home and abroad, common security, and use of tech for social good.

New despotism includes environmental sabotage, reckless capitalism, isolationist nationalism, incitement to racial and religious hatred, retreat from aid, war mongering, and the use of tech for social harm.

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