Afterword

Seeking Equilibrium

n the final day of the Paris climate conference, a moment

of uncertainty rippled through the international pool of
journalists whod spent two weeks reporting on the tumultuous negotiations in a former airfield, Le Bourget, outside the city.
Under the steel grids holding up an old aircraft hangar, wed tracked,
probed, investigated, doubted. By this time, the end was near, and
our attention was focused on the closed-circuit TV screens poised at
each end of the long tables wed called home for two weeks.
We could see delegates from 195 countries rustling to their feet as
the sound of clapping began to emerge. The claps rose in intensity,
building in waves from the floor. The camera circled: There were
the Albanians, there was the one delegate of Benin, there was the
crowd from the United States, Russia, India, Germany, China, Brazil.
Who were they applauding? At first it was not clear. On the dais were
the hosts of the conferenceFrances Prime Minister Laurent Fabius
and President Bernard Hollande, as well as UN Secretary General Ban
Ki-Moon. But the applause didnt seem to be for them. The delegates,
representing 98 percent of humanity, were looking to and fro, from
side to side, and letting loose with ever-louder rounds of applause.
Then a realization seemed to flicker through the pack of
exhausted journalists: They were applauding themselves. For a
moment, a boundary was breached: A flicker of recognition, a stop,

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a momentary dislocation, passed fleetingly through the hall that,

somehow, we were all in this together.
The sense lingered briefly; deadlines kicked in. But it was a telling, even thrilling, moment. The world had acted. Climate change
had brought nations together like no other crisis in history. An
accord had been signed that was the most ambitious in the long,
fitful nineteen-year progression of annual negotiations. Countries
that opposed each other on everything else, that actually are avowed
enemiesthe United States and Russia, Saudi Arabia and Iran
agreed on one thing: They would reduce the use of fossil fuels, and
deal, somehow and in ways yet to be fully determined, with the
damage theyd already caused.
A historic agreement had been reached.
Let that linger for a moment . . .

uvWVU
In many ways, what occurred in Paris over those two weeks in late
2015 was the latest chapter in the scramble to establish a new state
of stationaritya new baseline for decision making that includes,
for the first time, an overall goal of removing fossil fuels from our
energy matrix. The death of stationarity papers of 2008 and 2015
had told us that the natural order was being disrupted to such a
degree that we could no longer look to past patterns as an indicator
of the future. Now we were entering into new terrain in the geopolitical and economic realm.
For two centuries, the economy of everyone on earthrich, poor,
north, southwas built on the economic illusions that underlie our
use of fossil fuels for energy. The economic order was rigged to favor
oil and coal. Paris was a major step in correcting that distortion, and in
identifying ways to unleash the flow of capital to stimulate investment
in renewables and contend with the consequences of climate change.
Alliances and rivalries took new shape. Until this latest gathering,
climate summits were more like a Kabuki dance. The United States

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would not commit to a global emission accord in the absence of a

Chinese commitment to reduce their emissions, and the Chinese
claimed the same, in reversea catch-22 that served both sides. The
European Union, in turn, insisted that it would take more aggressive actions than it was already taking if the US did the same. For
quite some time, commented Ma Jun, director of the Beijing-based
Institute of Public and Environmental Affairs, we have used each
other as an excuse for non-action. As the economic and environmental disruptions from climate change became ever clearer, and an
unprecedented global civil movement arose to demand action, the
Kabuki moves were short-circuited.
First there was President Obamas visit to China in 2014, and the
subsequent climate agreement between the two nations, in which
China agreed to cap the rise in its greenhouse gas emissions by
2030, and a host of other initiatives in the trade and technology
arena aimed at spurring development of renewable technologies.
(The United States also agreed to double the speed of its emission reduction trajectory through 2025.) Then Chinas President
Xi Jinping came to Washington, DC, in September 2015, where he
agreed that China would expand the countrys renewable energy
grid, lower its CO2 emissions per unit of GDP by two-thirds by 2030,
work toward making half of all new buildings green by 2020, and
elevate the provincial cap-and-trade program to a national level.
(The US agreed to close technological cooperation with China, and
put some money on the table; it committed three billion dollars for
the Green Climate Fund and promised to work with its developed
country allies to come up with one hundred billion dollars annually
to assist developing countries with the green transition.) Both these
agreements were critical breakthroughs for both countries.
But the coup de grce in the ChinaAmerica dance came three
months later, in Paris. At a press briefing on December 11, one day
before the applause rained down, the vice foreign minister of China,
Liu Zhenmin, was asked by a journalist why it appeared there would
be no legally enforceable emission targets and timetables, to which

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he replied that the U.S.... would face domestic difficulties if [such

measures] are included in the Paris agreement. He added, We
must have the United States on board for a successful Paris agreement.1 The domestic difficulties he referred to, everyone knew,
was the great elephant in the room in Paristhe Republican Party
in the United States.
To the world, this was irresistible irony and profound tragedy. The
negotiator for China had identified the major obstacle to a stronger
deal as the political party, funded to a significant degree by fossil
fuel companies, that controls the US Congress. He was of course
correct. How far we have traveled. And in other ways, too, the playing field shifted: When it comes to climate responsibility, a country
like China or Brazil can no longer purport to being on the same
level as, say, Cameroon or Paraguay, just as the United States can no
longer duck behind Chinas inaction.
The main accomplishment of the Paris Agreement was not necessarily the emission reduction targets themselveswell get to those
in a minutebut the structure set up to monitor and report on
them. One hundred and fifty countries submitted detailed emission
targets to the United Nations before the Paris conference. These were
substantive reports, involving assessments of primary greenhouse gas
sources and ways in which each country would go about reducing
them. The range of such commitments was unprecedented, and it
revealed much about where the real centers of a renewable energy
economy are strong, where they are emerging, and where there is
a long way to go: The European Union, which submitted jointly on
behalf of its twenty-eight member states, promised 40 percent reductions by 2030; the United States, 26 to 28 percent by 2025; Canada, 30
percent by 2030; Mexico, 25 percent by 2030, representing one of the
most ambitious among developing countries; and India, which is now
seen as the new China when it comes to intensity of greenhouse
gas emissions and wariness of international agreements, committed
to reducing the emissions intensity of its GDP by a third by 2030
(intensity of emissions is far more a measure of energy efficiency than

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of objective reductions). If you wanted a portrait of where greenhouse gases come from, these reportscalled in UN lingo Intended
Nationally Determined Contributions (INDCs)provide it, in very
technical formulations, with almost spooky precision.2
The day before the final agreement was released, I spoke with
Alf Mills, the chief negotiator for South Africa, which was also the
leader this year of the G-77, the umbrella organization for developing countries. Mills was exhausted when we met. Hed canceled on
me the previous day because hed been up all night negotiating and
needed to sleep. By the time I saw him a day later, he seemed to be
powering through on sheer adrenaline.
We met in the South African pavilion, which featured photos of
the new South Africa, including Nelson Mandela, whose words
would be quoted the next day by President Hollande: It always
seems impossible until its done.
South Africa is in a unique position for reasons beyond its political
history. Its a developing country with a highly sophisticated infrastructure, deep engagement in the international economy, a history
of conservation-minded policies, and fiercely strong industrial and
mining interests. It is, perhaps, a stand-in for the complexity of the
world taking shape. The nations geographic position also means it
is highly vulnerable to the impacts of climate change; it has been
experiencing a severe drought for the past several years, highly
disruptive to its food-growing capacities. South Africa is in the top
twenty of greenhouse gas emitters, a significant contributor relative
to other developing countries. Its policy makers have an interest in
slowing greenhouse gas emissions, yet they dont want measures to
hamper their hopes for rapid economic development.
In other words, South Africa alternates between playing an aggressive leadership role in pushing for stronger emission restrictions, and
putting the brakes on. Were between a rock and a hard place,
Mills said, chuckling.
For Mills, Paris was an epic accomplishment, particularly in
changing the dynamic of condescending hostility that his and other

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large developing countries often feel when dealing with the northern rich countries. Rapidly developing countries such as South
Africa follow very closely the simmering debate in Europe, and to
a growing extent in the United States, on the carbon footprint of
imported goodstensions we explored in the case of Pittsburgh,
Manchester, and Guangzhou in chapter 5. When rich nations
begin to account for the greenhouse gas life cycle of imported
goods, explained Mills, this can look like trade discrimination to
an exporting country like his. He cited several recent examples
of potential tension spots along these lines, including the EUs
increasing attention to the carbon life cycle of goods imported
into Europe, such as flowers grown in Kenya or wines grown in
Chile or elsewhere involving a long transit trail. Though the largescale trade wars he fears have yet to take hold, the threat of them
formed a backbeat to the climate talks. Alongside the widespread
recognition that people the world over would have to start doing
business in new ways, there was also the recognition that it would
be most painful for the emerging nations now navigating the wake
of the rich nations wild industrial ride. The search for their own
course through their own industrial revolutions cant be mapped
out using the economic models of old. There, too, the baselines
have vanished.
Still, said Mills, for developing countries like his the agreement
represented a major step forward: A new architecture of power was
created to enable rich and poorer countries alike to meet on equal
footing, where targets inch us toward a world based on cooperation, not on hostility.
The paradigm is changing, he went on. Countries are beginning to realize that if we dont address climate change, the risks to
economies and societies are too high, untenable... From my point
of view, were heading to a carbon-constrained world. Thats the
future. This is the fundamental change were seeing.

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Heres how the new carbon constraints, at least those on the UN

level, work: The emission targets are submitted by governments.
The targets are assumed to be the best-faith efforts that governments can come up with. For many developed countries, they are
supposed to aim toward a two-degree temperature scenario and
may be enforceable within their national jurisdiction, depending
on the country, but there is no ability to sanction countries on an
international level for not meeting them. (Thank the Republicans
for that.) For developing countries, where most of the fossil fuel
growth is happening, there are two categories of emission action
unconditional and conditional. The first relates to measures that
they can pursue autonomously, within local economic limitations:
energy efficiency, small-scale renewables, reforestation, and similar
efforts, all varying depending on country. Then there are the conditional provisions: actions that a nation intends to pursue if it receives
international support from governments and international agencies.
These provisions are designed to entice progressively higher levels
of financial and technological engagement by developed nations.
Countries have agreed to report on their progress every five years,
starting in 2020, and to submit, each time, a revised climate action
plan that is more ambitious than its previous commitment. It is here
where accomplishment of the goals made can be compared, where
the cajoling and negotiating will no doubt get heated, and, not incidentally, where a snapshot portrait of how quickly emissions are
being reduced can be obtained. The ratcheting of emission goals
is supposed to only go up. There is a foundational assumption at
the root of this system of reporting and monitoring: Its assumed
that countries agree that climate change is presenting a fundamental
threat, and that it is in everyones interest to act. What those specific
interests are, of course, varies by country, but its this approach that
Mills described as a significant departure from previous summits:
Countries are being friendly to one another rather than confrontational. Its no longer the big dominating the small. In a sense its
this structure itself, a shifting of international power points, thats

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considered historicwith a flexibility that can, over the coming

years, turn out to be its strength, or its downfall.
And then theres the money. Secretary of State John Kerry, who
seemed to be omnipresent during the final days of the Paris talks,
committed the United States to providing eight hundred million
dollars to help developing countries deal with the cascading effects
of climate disruptions: rising sea levels, worsening droughts, public
health crises, and other impacts that its now too late to avoid. For
the first time, developing countries agreed to contribute: Vietnam
committed a million dollars to the Green Climate Fund, where a
portion of those US funds will land. The city of Paris did the same,
and the Canadian province of Quebec committed five million.
President Obama also committed the United States to join other
developed countries in supplying one hundred billion dollars a year
jointlyfrom what sources exactly is unclearto aid developing
countries with adapting and with conditional renewable energy
transitions, at least until 2025. There are other pockets of money
from international institutions and the foreign aid budget, but these
are the major portions from the US and its allies. The goal is to
obtain net zero emissions by 2050.
Now lets turn to another reality: The International Energy
Agency tells us that wed need at least a trillion dollars a year for the
coming decade or two to help engineer a complete switch in energy
sources worldwide by midcentury; the World Resources Institute
suggests that about two hundred billion dollars a year will be needed
for mitigationlowering emissions through efficiency and switching to renewablesalone.
Thus, to reprise, the developed countries have committed that
hundred billion dollars a year, from public and private sources, until
2025; plus another couple of billion, give or take, from other various
funds and sources. Assuming even that first commitment is met, the
math is pretty stark between whats on the table and whats needed.
What the gap in both emission targets and money means is
that we will probably come nowhere close to holding the global

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temperature rise to two degrees Celsius. If were lucky, most scientists agree, meeting all the targets would get us to 2.7 degrees. That
number means disaster for low-lying countries faced with rising sea
levels, more and more intense droughts for all of us, increasingly
intense storms, and more immigrants fleeing their lands and heading to the United States and Europe. And as warming continues, the
feedback loops intensify: Tropical diseases continue moving north,
more CO2 is absorbed by the sea, more crops are disrupted from
their normal growing patterns. Needless to say, finding a moment
of stationarity, in whatever the realm, gets more elusive with each
rising degree.
Which brings us to adaptation. This concept went from being on
the sidelines during past summits to a key ingredient in the climate
accord. In the past, the principle was seen as a dodge to avoid dealing with the serious effort to reduce, or mitigate, greenhouse gases.
Now its articulated as a central principle of the Paris Agreement,
though with limited money attached, because of the increasingly
clear fact that we must find ways to adapt to the onrush of symptoms its too late to stop.
The accord also acknowledges for the first time that it may be too
late for many to adapt at all. The Paris agreement acknowledges
what it calls loss and damage provisions. Meaning: Someone needs
to take responsibility for the loss and damage that is already occurring, recognizing the brutal fact that for many small island states and
low-lying nations, its already too late to adapt. But the mechanism
for compensating those countriesor even, as several proposals
suggested, rewriting immigration rules to permit people whose country has disappeared to migrate to new homeswas left unresolved.
So on the one hand, we have a new structure that promises to bear
fruit over the coming decades. On the other hand, it comes nowhere
close to slowing the flow of greenhouse gases to the extent needed
to prevent some of the harshest impacts.
This is why the accord has been criticized by some environmental
advocates and scientists as not being strong enough to trigger a shift

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away from fossil fuels. This is true, particularly when seen in isolation.
In fact, a remarkable coalition of small island states, environmental
NGOs, and scientists did succeed in practically turning around the
debateat least on paper. Whereas most of the world went to Paris
expecting 2 degrees Celsius to be the key bookend goal, within the
conferences first week this coalition succeeded in upping the ante to
1.5 degrees, and science is on their side. Capping temperature rises
at 1.5 degrees, it turns out, is the only realistic way to significantly
increase the odds against accelerating climate impacts.
I was curious what such a drop in half a degree, from 2 to 1.5,
might actually mean and found out at a couple of scientific panels
that were happening as the negotiations were under way. At a
panel grandly titled Accelerating the Great Transformation, Hans
Joachim Schellnhuber, head of the Potsdam Institute, one of the
worlds leading climate research centers (hes been a climate adviser
to Pope Francis), said that 2 versus 1.5 would mean the difference in
preserving a significant portion of the Greenland ice sheetor not.
Best estimates suggest that sheet could melt away at a 1.6-degree
increase or more. This is a significant difference for many reasons,
notably the massive sea-level rise, and accompanying disruptions,
that would follow the melting of Greenland.
For a sense of what 1.5 degrees would mean for our society, I
headed to another group of expertsa panel of economists and
scientists. And here is where I learned just how uncomfortable are
the choices that climate change presents, as explained by Steffen
Kallbekken, director of the Center for International Climate and
Environmental Research in Oslo, Norway, one of the worlds leading think tanks on the interplay between the climatic shifts and the
economy. To stabilize at a 1.5-degree Celsius rise by 2050 means that
governments, businesses, and individuals would need to cut their use
of fossil fuels by 15 to 20 percent every yearstarting now. To stabilize at two degrees would require cuts of 7 to 8 percent each year.
The numbers taunt: What, precisely, will we give up to achieve
one or the other goal?

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The 1.5-degree figure did make it into the accord as an aspirational

goalwhich can be read either as a success, because never before has
such an ambitious goal been referenced by the global community, or
as a failure, since there is little indication that, at this stage anyway,
well get anywhere close to reaching it. The numbers suggest the
monumental task ahead.

uvWVU
There is another important component to the Paris Agreement, less
direct perhaps but with equal, if not greater, long-term significance.
For a decade or more, those engaged with climate issues have for the
most part hoped, and agitated for, a single binding treaty that would
lock the world into a dedicated emission reduction pathway. That,
we know, has not happened.
When seen in isolation, the accord does not get us close to avoiding
the destruction that will come with a temperature rise greater than
two degrees. But under the official surface, in cities and communities, in investment houses and on the streets, in labs and businesses
and farms, there were changes in attitude, changes in how renewable energy was made and priced, changes in the extraordinary
transnational movement that has risen to fight for climate action.
People have stopped accepting the tired and self-serving arguments
that fossil fuels are not only the most profitable investments but also
needed to grow the economy. Many of these forces have been given
a boost by the outcome in Paris, though they were there long before.
Progress in Paris was not necessarily made in the way the world
expected it to be made. The accord was like an alarm clock suddenly
jangling us out of our sense that we could rumble along, dodge
bullets, adapt, and maneuver our way through the unfolding crises.
The alarm was loud and simple, and has been building from where it
began in labs where scientists were seeing the rapid alterations in the
earths balancing forces due to the disruptive impacts of greenhouse
gases, was taken up by the extraordinary public movement that

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has drawn millions of people into the streets in countries around

the world and now, finally, made it into the highest echelons of the
global system: We, the world, are saying its time to get rid of fossil
fuels. The details do not get us to 2 degrees, which is why we need to
acknowledge that life on earth will be evermore intensively marked
by the impacts of climate change. But what the accord does do is
send a strong signal about the future to the financial, political, social,
and cultural institutions of our eraand to investors weighing their
options, engineers assessing their careers, governments choosing
their development pathsthat we are heading over the coming
decades into a carbon-constrained world, and that the long-term arc
is not hitched to fossil fuels.
That signal is heard in many different ways, including in the places
where most of us livein cities, where by 2050 two-thirds of all
humans will reside. Cities are also where the impacts of climate
change are acutely felt. For cities on the coastand most major
cities are on or near oneevery inch of sea-level rise threatens more
homes, highways, and businesses. Extreme storms, which scientists
say will increase in frequency over the coming years, can devastate
infrastructure and housing stock, as occurred with Hurricane Sandy
in 2012 in the eastern United States, and the typhoon sequence in
2015 that battered the Philippines (for just two recent examples). Even
wildfires, which the IPCC says will increase somewhere between
100 to 300 percent for every one-degree Celsius rise in temperature,
continue to taunt cities at the edge of grasslands and forests.
Mayors are normally overshadowed by more powerful heads of
state, and in the past they have been largely left to improvise through
climate disruptions. But they also have far more room to move than
national governments, which are often constrained by the pressures
of fossil fuel industries. They direct control over a multitude of
quotidian factors that are significant contributors to greenhouse gas
emissions: transporting people to and from work, processing waste,
increasing the efficiency of electricity use in offices and residential
buildings, reworking the electrical grids.

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Cities are where the pollution is and where the solution is, former
New York mayor Michael Bloomberg commented. Bloomberg
traversed the climate talks like an at-large diplomat, which he is: Ban
Ki-Moon appointed him the UN special envoy for cities and climate
change. Hes also a co-chairman of the Compact of Mayors
representing some 360 cities with a combined population of 340
millionwhich announced that the initiatives of its members, city by
city, would lead to reductions of 3.7 billion tons of greenhouse gases
annually by 2030, amounting to a quarter of the reductions needed
to fill the gap between national pledges and the two-degree scenario.3
If the climate summit on a political level was about channeling
the diverse hurly-burly of responses to climate change into a single
cohesive signal, on the financial level it was about starting to reveal
the economic underbelly of our energy system, the ways in which
the so-called free-market economy has been rigged to favor fossil
fuels. The rigging, largely hidden until now, comes in a million and
one forms. Fossil fuel companies are graced with accounting rules
that dont require them to fully pay for their costs, disclosure rules
that dont require them to report the spectrum of risks they face
(as other industries have to), laws that make it extremely difficult
to hold them accountable for damage done, a tax code that favors
fossil fuels over less damaging energy sourcesand political dominance through a campaign finance system that has guaranteed that
uncomfortable realities such as climate change do not rise enough
high on the agenda to trigger government action. All these are being
challenged now as we seek a new kind of equilibrium to maneuver
into and through the carbon-constrained era to come.
Revealing these hidden risks was a resonating sub-theme of
the Paris conference: The global financial establishment has been
undergoing a reevaluation of climate risk and beginning to rewrite
the economic rules. Midway through the conference, Mark Carney,
governor of the Bank of EnglandBritains equivalent to the chair
of the US Federal Reserveannounced the creation of a new Task
Force on Climate-Related Financial Disclosures to assess the stress

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points of the worlds major financial markets to climate risk.

Carney characterized the task force as an effort to rectify the current
market failure to provide adequate information to investors about
climate risks. He asked Michael Bloomberg to run it.
Carneys initiative has its roots in the financial crisis that whipped
across the United States and Europe in 2008 and 2011, after the
previously unrecognized risks from mortgage derivatives and the
collapsing housing markets turned hundreds of billions of dollars of
assets into liabilities. The G20 created the Financial Stability Board
to identify stresses in the global economy and head them off to avoid
a repetition of the catastrophic cascade that triggered the Great
Recession. Carney was appointed the chair just as climate change
began creeping into the consciousness of financial professionals. As
Britains central banker, he described climate change as a potentially
massive disruptor of global economic stability, and ordered British
insurance companies, the first hedge against the physical and financial impacts of climate change, to provide detailed data on exposure
of their funds to fossil fuel investments.
Carneys concern now extends far beyond insurance into every
publicly traded company, which will be included in the assessment
of risks ahead. This was critical, he said, for the transition to a
low-carbon economy. The bigger the carbon footprint, the bigger
the risk and potential for stranded assetsa term coined almost a
decade ago by the groundbreaking environmental accounting NGO
Carbon Tracker4 and now in the everyday lexicon of the worlds
bankers and financial institutions.
In other words, Carney is calling for honest accounting. Hes
really been shaking things up, said Sue Reid, vice president for
climate and clean energy at Ceres, which has led a campaign in the
investor community to pressure the SEC to compel stricter climate
disclosure standards. At the highest level, hes telling the truth about
the profound systemic and financial threat that carbon and climate
present... Regulators dont want to get caught asleep at the wheel
like they were in 2011.

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There are two categories of risk that are together challenging the
long-unquestioned reign of fossil fuel companies, and the companies
that rely on them, atop the financial charts. The first set of risks apply
mostly to the long-term prospects of oil and coal companies, including the competition from the renewable energy sector, experiencing
rapid technological advances and dropping costs; the rise in fuel
efficiency standards in the United States, Europe, and most recently
China and several other developing nations; the literal physical risks
to companies with infrastructure on coastlines and riverbanks; and,
of course, the growing recognition that governments will act to limit
the use of fossil fuels. Primary among those factors is carbon pricing:
As the costs of greenhouse gas pollution rise, the unfair playing field
relative to renewables will shrink. The elusive cost of carbon, that new
and bizarre commodity on the world financial stage, has the potential
to be the greatest economic disrupter of the twenty-first century.
The second set of risks apply to all companies operating on a
climate-disrupted earth. There are the food companies whose
supplierssuch as farmers, manufacturers, and processors reliant on predictable transport and shippingface severe challenges.
There are the reputational consequences of consumers and investors becoming more aware of the carbon footprint of their favorite
products. And there are regulatory moves by governments, which
are fitfully but increasingly instituting penalties on the emission of
greenhouse gases.
Few of these looming triggers impacting the performance of
fossil fuel companies, however, are required by the Securities and
Exchange Commission to be reported to potential investors in the
United Statesthough any one of them could seriously undermine
the financial value of companies reliant on fossil fuels.
In Europe such disclosures are becoming increasingly routine.
France is on the cutting edge. In 2015, that countrys Financial
Market Authority, or AMF (the French version of the SEC), began
requiring publicly traded companies to report their greenhouse gas
emissions to investorsamounting to a report on their contribution

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to climate changeand the financial risks that investment funds face

from climate changes impacts. This includes the risks that the value
of fossil fuels will decline as the shift toward renewables accelerates
and the world moves toward further limits on greenhouse gases. A
bank, for example, may have a small carbon footprintcomposed
primarily of the cumulative greenhouse gas emissions from the
energy used in its offices. But the funds it steers into investments are
another matter, and carry a much larger footprint. Companies must
now report what the other companies they invest their funds in are
doing to help move toward and finance a low-carbon futureessentially mandating life-cycle analyses for investment funds.5
What may appear like a radical departure from what weve till now
considered the norm is actually quite conservative; the French and
their European counterparts approach signifies the end of tolerance
for the tweaking of economic rules to tilt the playing field toward oil
and coal. While France has the most rigorous requirements, most
other European countriesGermany, the United Kingdom, the
Netherlandshave far more stringent climate disclosure requirements than the SEC imposes in the United States. The commission,
a spokesman informed me, is reviewing its disclosure rules and may
issue revisions by the end of 2016. In the meantime, transnational
companies traded on both European and American stock exchanges
are compelled to supply two sets of information: one to the French
and other European exchanges on their array of climate-related
risks; and another in the United States, where they are under no
obligation to do so. From a purely economic point of view, stock
investors outside the United States are getting a more complete
picture of the companies they invest in. From a climate point of
view, this articulation of risks will enable investors and activists to
unravel the rigging that has insulated fossil fuel companies from
accountability for their risks and, ultimately, their damages.
If youre traded in France, commented Bevis Longstreth, a
former commissioner with the SEC during the Clinton administration, you have to show your carbon footprint. If youre traded in

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New York, you dont have to list anything, you can pretend you dont
even have a [carbon] shadow.
That distinction between a shadow and a footprint was also
reflected in the growth of the divestment movement launched by
350.org. Begun among universities and cities in 2012, the movement
is turning up the pressure. At the Paris talks, two of the worlds
biggest institutional investors, the German insurance giant Allianz
and the Dutch pension fund ABP, announced that they would be
divesting their portfolios of fossil fuels. Six months earlier Frances
largest insurance company, AXA, did the same. The group now
reports that institutions in the United States and Europe representing some $3.4 trillion in assets have announced their intention to
remove oil and/or coal assets from their portfolios. Among these
is a group of major companies convened by the UN Environment
Program, the Portfolio Decarbonization Coalition, which claimed
in Paris that its members are in the process of divesting six hundred
billion dollars in assets from fossil fuels.
Theres a quiet revolution underway around the world, which is
decarbonizing in many different ways, commented Nick Robins,
the former HSBC banker who is now directing a UNEP inquiry into
redesigning financial rules to encourage sustainable investing.
Insurance companies are taking note of the shifting landscape.
We foresee, concluded Lloyds of London, an increasing possibility of attributing weather-related losses to man-made climate
change factors. This opens the possibility of courts assigning liability
and compensation for claims of damage.
Indeed, the law has begun charging into new terrain, practically
just as Lloyds has feared. Old moments of legal stationaritylongheld presumptionsare shifting. There was the life-cycle case cited
in chapter 5, affirming the validity in US jurisprudence of what is,
in essence, discriminating in commerce based on a goods carbon
footprint (a concept that is, on a global scale, of concern to Alf Mills
in South Africa for other reasons). More recently, weve been witness
to the extraordinary spectacle of revelations that the worlds biggest

Seeking Equilibrium | 191

oil company, ExxonMobil, not only long knew about but also intensively studied the phenomenon of climate change that it was publicly
denying existed.6 The company is now facing an investigation by the
attorney general of New York for lying to its shareholders about the
risks it was quite concerned about in private. (Though its not illegal
to lie about such things to the American people, or anyone else in
the general public, it is illegal to lie to your shareholders.)
It is worth recalling for a moment here that though the task of
ascribing specific liability for the damages wrought by greenhouse
gases can be daunting, we actually know, thanks to the pioneering
work of Richard Heede at the Climate Accountability Institute, that
two-thirds of all global emissions can be tied to just ninety companies.7
The other side of risk, of course, is opportunity: If it werent
happening in such sporadic bursts over time, the green economy,
now representing hundreds of billions of dollars in investments
worldwide, could be considered as disruptive a force as the hightech revolution. The cost of solar, wind, and other renewables
has been dropping rapidlymore than 80 percent for solar since
2000. Sun, wind, and water now supply the United States with
13 percent of its electricity, according to the Energy Information
Administration. In Germany, renewables supply from about half
of the nations electricity to as much as 78 percent, which is what
happened on a day in the summer of 2015 that was both sunny and
extremely windy. Such examples are no longer freak moments in a
utopian dreamscape, but are the reality of radically shifting energy
markets, as technologies for storing and transmitting green energy
improve and costs drop. Globally, renewables will likely account for
at least a quarter of the worlds electricity by 2040, according to the
EIA.8 Those estimates were done before the Paris talks, which if
nothing else sent a signal to investors that renewable energy grids
are the future.
Meanwhile, climate change persists. Its disruptive impacts
continue to whipsaw all of us, including those least able to withstand and respond to them.

192 | The End of Stationarity

A challenge to our energy system amounts to a major challenge,

and threat, to our status quowhat has been, until now, a kind
of economic stationarity. That, too, like conditions on the ground
beneath our feet, is shifting. The more we understand and act upon
the long set of connections that tie us to our carbon footprints, and
connect our carbon footprints to the state of the world, the more we
will be able to trigger a new, and more equitable, kind of equilibrium.
Whats long been at the heart of fossil fuels dominion has been,
as has hopefully become clear through the pages of this book,
the profound distortion of the economy to favor them. Finally all
the elements it took to create the pediment on which fossil fuels
have ascended to the central place they occupy today are being
replaced, transformed, turned around to reflect new priorities for
our future here on earth. Consider Paris the opening salvo in that
transformation.