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Episode 11


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The Angry Clean Energy Guy on what the climate movement must learn (but hasn’t, yet) from the fight against HIV /AIDS: The battle against Big Pharma was won in a way that offers important lessons for the fight against Big Coal, Big Oil and Big Gas. Hero of the week: Dr. Michael Mann, director of the Earth System Science Center at Pennsylvania State University. Villain of the week: Asia Pulp and Paper, the Indonesian conglomerate.


Episode Transcript:

Hi, I am The Angry Clean Energy Guy, Assaad Razzouk. Welcome to episode 11 of my podcast. I am so happy you’re here. Thank you. This week I am going to rant about corporations. That’s it. So fasten your seatbelts.


So let’s talk about corporations. Corporations and businesses must be a force for good. I have a huge problem because by in large, they’re not at the moment with a few exceptions that I can’t even remember. They’re not. Instead of being a force for good, businesses, companies, banks are just by enlarge bad. Let me give you some quick numbers. 

Just 90 companies, 90 companies are responsible for two thirds of all the bad greenhouse gases that we’ve emitted since industrialization began. Just 90 companies. All of them are oil, gas, coal, or cement companies. So this means that just 90 companies are on their own frying the planet.

500 companies controlled a humongously huge 70% of world trade. And frankly, they’re not covering themselves with glory controlling that trade. 

And finally the largest 3000 companies by market capitalization cause $2 trillion of environmental damage per year. That’s not me saying it. A big accounting firm did a comprehensive study and concluded that that’s how much they get away with. Two trillion dollars of environmental destruction every year. 

So there you have it. Corporations are not a force for good. 90 companies have emitted two thirds of all the bad greenhouse gases that we’ve emitted since industrialization began. 500 companies control pretty much 70% of world trade and another 3000 companies, 3000 companies, that’s it, cause $2 trillion of environmental damage per year. 

Now instead, what I keep reading about is how much businesses are worried about the cost of climate change. Just today, the New York Times had a story about how many of the world’s biggest companies are bracing for the prospect that a warming planet could substantially affect their bottom lines within the next five years.

Well, New York Times, how about you focus instead on the environmental destruction that they’re causing, which is a lot more than how much a warming planet can affect their bottom line. And if we reversed that, then wouldn’t we all, wouldn’t everything be so much better? So The New York Times calculates or rather refers to an international nonprofit called CDP that calculates that hundreds of companies potentially face $1 trillion in costs related to climate change in the decades ahead. Fine. How about we focus instead on what these companies are doing now and how if they stop their environmental destruction, we would all be healthier and wealthier and we would create tens of thousands, millions of jobs because they are finally acting properly. 

So let me come back to corporations in a moment because I want to take a detour and talk about HIV first and specifically the global fight waged in the 80s and in the 90s against AIDS.

In that fight, generations of campaigners basically coordinated a global action against powerful companies that were denying the AIDS problem; and vested interests, interests that were shamelessly financing armies of lobbyists and lawyers worldwide. And by the way, if that rings a bell in terms of comparing the fight against HIV denial and the fight against climate change today, it should. 

There was a movie that powerfully portrayed what these campaigners were fighting against, and if you remember it, it was called The Dallas Buyers Club with Matthew McConaughey. 

Now these campaigners against HIV denial were basically battling corporations first and foremost, and the corporations they were battling were Big Pharma because Big Pharma was then producing medication for the ultra rich only. 

The medication was a luxury and the campaign transformed it into a human right for all. It transformed the right to medication into a human right for all funded by a global fund, and manufactured as generic medicine. That’s how the fight was won. 

Now, AIDS was first diagnosed as an illness in 1981. It was at the time widely misunderstood and misrepresented hugely by powerful voices in politics and in society, a little bit like climate change today. Anyway, now these powerful voices sought to minimize the threat it poses and they tried to marginalize and ostracize the sufferers, but the suffering was enormous. So a social movement started developing from 1986 demanding universal access to treatment for those living with the disease. And that fight took about 15 years and essentially succeeded in 2001 when the United Nations General Assembly declared in favor of universal access to treatment. 

By 2008 more than 4 million people in poor countries were benefiting from a previously unaffordable treatment that they were denied. No one can never diminish the terrible struggles AIDS sufferers still face today, both in getting access to medicine and in finding understanding in their communities and in their countries. But we have to also respect the astonishing success that the HIV movement has achieved and the bungling, stumbling, inefficient climate movement should learn from its example. 

Let me try and explain. So research established that the HIV movement succeeded because of five factors. Number one, it defined the market it was fighting for and they did that by focusing just on Big Pharma. It did not focus on politicians or newspapers or any other actor. It focused just on Big Pharma and it focused on its weak points and attacked it for favoring profit over people. 

By contrast today, the climate movement’s opponents have successfully made it seem that because emissions come from power and transportation, agriculture and housing and multiple energy sources like coal, oil, gas, land use, etc., transforming the market requires transforming how we live, travel, build, trade and therefore it’s impossible. And that was done on purpose. 

But I’m going to come back to that in a moment. So the HIV movement succeeded because of five factors. The first one was they defined clearly the market that they were fighting and that was Big Pharma. 

Second, they developed a compelling message and frame that argued that the drugs necessary to fight HIV were essential for life. 

Third, they were coherent. So the AIDS movement focused on clear goals based around universal access to treatment without regard to whether you were rich or poor.

Number four, they managed to convince that the cost to effect change was low because all you had to do was manufacture cheap generic drugs. 

And finally they succeeded in creating or pushing the world to create stabilizing institutions that gave it permanence. And the main institution that the fight against AIDS gave us was the Global Fund to Fight AIDS, Tuberculosis And Malaria, which was capitalized via a voluntary contribution from airline tickets adopted by many countries. And this fund to date has disbursed more than $20 billion and saved more than 9 million lives. So that’s how the HIV movement did it. 

Now the climate movement on the other hand is bumbling and stumbling because it’s got too many, fat too many targets. It’s incoherent, it’s trying fight too many battles at the same time. And fundamentally it’s failing miserably because emissions are still rising and the threat continues to increase in an incredibly worrying way.

So let’s talk about these five factors that were very clear in terms of the HIV movement and how a social movement can succeed. Let’s talk about them in the context of the climate movement. 

So first, to push forward effective climate action, we need to define the target narrowly. Now we all know that emissions come from many activities such as the power sector, the transportation sector, agriculture, housing, airlines, ships, and many others. And we all know that emissions come from many energy sources like coal or gas, land use, agriculture, etc. And these multiple strands contribute to the size of the climate movement, which is huge and its propensity to shoot in multiple directions to try and cover oil, gas, coal, construction, transportation, manufacturing, food, travel, waste and many other industries. We’re not going to get anywhere in this way because in reality, back to corporations, the market can be very narrowly defined. We have to focus on the 90 companies responsible for two thirds of the harmful emissions generated since the industrial age began. That’s it. Just these 90 companies. These 90 companies control five times as much oil, coal, and gas than it’s safe to burn today and 80% of their reserves must be locked away underground to avoid a catastrophe. Now this tiny number of large companies lobbying to prevent climate action by spending billions each year, they are at the heart of our current carbon intensive model destroying the planet. So we have a target market which is small and which is contestable. 

We also need, as we learned from the HIV movement, a compelling message and frame. So let’s focus on people. We need to focus on the right to life, i.e. on the human rights violations of these 90 companies. Let’s not focus on animals and let’s not focus on things. Let’s just focus our message on people. More climate action would arise if we focused on the human suffering and that was communicated consistently and became clear to everybody. 

Now third, we need to be coherent. We know that we need a drastic cut in emissions. We know that we need an economy fueled with renewables. The problem is that the costs of climate action are not always accepted because it’s not clearly understood what damages fossil fuels are causing. So, as I said before, the largest 3000 companies by market cap cause $2 trillion of environmental damage per year, and all the climate action in the world won’t cost a fraction of this amount. And remember when you’re violating human rights, costs must take a back seat. So for example, doing away with slavery was extremely costly to slave owners. But who cares? These costs were not relevant to the fact that slavery had to be wiped out. 

So to be coherent, we have to focus on the largest culprits, just these 90 companies, and we have to have a narrow objective in terms of these 90 companies. And the narrow objective is to shrink their market capitalization by making their money expensive, much more expensive than it is today. Today, basically, their money is free. They have access to hundreds of billions of dollars of capital, whether equity or debt, essentially free. That needs to change. Now, how are we going to change that? As we learned from the HIV movement, the cost to change has to be low. And frankly in the context of the climate fight, that’s not very difficult. 

And the reason it’s not very difficult is because when you look at what we’ve just said, so number one, we need a defined target, so that’s the 90 companies; Number two, we need a compelling message, so that’s a violation of human rights message; Number three, we need to be coherent, so we need to reduce their market capitalization and increase the cost of their money; And number four is we need to do that at low costs. And the best way to do that is to move the capital markets so that they increase the cost of money of these 90 companies. 

And how do we do that in the capital markets? How do we effect this change at low cost? Well, it’s not that complicated. The capital markets are like a 150 trillion dollars or 200 trillion dollars monster, which is basically pretty much all the money in the world that’s moving and funding companies. 

Now, if you look at the capital markets in detail, what you see is that ultimately this is money from the public and from governments, which is going into pension funds and the likes, which are sitting at the top of the capital markets, which then distribute them to asset managers and others.

So there aren’t that many of these pension funds, right. And in pension funds sit pension trustees who are human beings that owe us a duty to invest prudently, but of course they’re not doing that today because although we know that 80% of known oil, gas and coal cannot be extracted without extremely serious consequences across our economies, pension funds and stock markets and bond markets continue to assign value to the 90 companies based on these reserves. So the trustees of the pension funds, which sit at the top of the capital markets and pretty much control everything if they wanted to, need to accept that climate related risks have to make it into investment analysis.

And if they did, then large amounts of money would migrate from the bad guys to the clean energy economy. And the value of the 90 companies would collapse. And if it collapses, then that means that their money has become very expensive and as a result they will not be able to burden us with their reserves that they want to extract and burn irrespective of the cost to the planet.

So we have to focus on pension fund trustees investing prudently to effect change. 

And we can do that through the legal system. We can do that via a barrage of lawsuits, multiple targeted lawsuits unleashed against pension fund trustees in as many countries as possible, wherever basically legal analysis shows that litigation has a chance, even if it’s tiny, to succeed. Now, if those lawsuits were unleashed, then you would wake up the pension fund industry, it would then change the mandate it’s giving asset managers and the money would flow in the right direction. 

And the fifth and final lesson from the HIV fight was that you need stabilizing institutions. And conveniently in the case of the climate fight, you can achieve fundamental change without having to rely on politicians, on regulators, on new legislation. So we should focus on creating stabilizing institutions and they are already all around us today. There’s a huge United Nations climate finance infrastructure and that needs to be revived. I’ve already argued elsewhere that the UN doesn’t need to set up multiple funds that are all basically try to do the same thing. They need to streamline what they’re doing and we need new mechanisms to fund them. So voluntary contributions by airline passengers, cruise ships, et cetera. A bit like what the Global Fund to Fight AIDS, Tuberculosis and Malaria achieved, or even a tiny, a tiny levy on share, bond and derivative transactions that are carried out by banks and hedge funds. I mean, we’re talking 0.01 cent on every transaction that would raise hundreds of billions potentially per year. And then we would have institutions with the financial muscle to help the vulnerable while the capital markets shift their cash to fuel clean lifestyles and economies and stop funding oil and gas companies, the 90 companies responsible for two thirds of emissions since we began to industrialize.

So to recap, we have a narrow target, just 90 companies. We have a compelling message and frame which we have to anchor around human rights. We have coherence because all we need to do is shrink the market capitalization of these 90 companies by increasing the cost of their money. We have low costs to effect change through pension fund trustees and we can strengthen the stabilizing institutions: Dear United Nations, clean up your act. We don’t need multitudes of supernational bodies, international conventions or accords and protocols, clubs, investment funds, and another green climate fund on top. I mean the Green Climate Fund for God’s sake is giving money to the AAA rated European Investment Bank, which is completely crazy, instead of focusing its money on the vulnerable. So there you go. The solution is not that complicated and the solution goes through corporations.

Thank you so much for listening to me, The Angry Clean Energy Guy this this far. 

My hero of the week is Michael Mann, the American climatologist and geophysicist who is currently director of the Earth System Science Center at Pennsylvania State University. Michael published a very important Op Ed together with a colleague of his in the past few days arguing, correctly I might add, that you cannot save the climate by going Vegan. Corporate polluters must be held accountable. In other words, enjoy your Impossible Burger, but there is no way you’re going to divert the climate crisis without keeping most of our coal and oil and gas in the ground. 

My villain of the week is an Indonesian company called Asia Pulp and Paper. It’s a huge conglomerate implicated in the haze in 2015 that cost $22 billion in economic damage to Indonesia and affected eight countries in South East Asia, polluting a hundred million people and the reason they’re the villain of the week is because they have recently been re-allowed to sell their products in Singapore for very bad reasons and they should not have been allowed to do that. They were certified to be able to do that again when in fact the company is still under investigation by Singapore’s National Environment Agency for its role in the 2015 Haze crisis. Basically what these people do, is they destroy rainforests in order to plant on them so that they can then manufacture paper as cheaply as they can and without regard to the environmental destruction that they are causing. Asia Pulp and Paper, shame on you. Get your act together. 

Thank you so much for listening and don’t hesitate to send my way any questions you have about clean energy, climate change, or whatever else you like. Stuff in the green space that makes you angry is always very welcome and have a great week.

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About Me

There is so much to be angry about, if you are a clean energy guy.

Every day, so many things that happen around the world make me angry when I look at them with lenses colored by the climate change chaos unfolding everywhere around us. And I am especially angry because I know we can solve the climate change crisis if we were only trying.

Each week, I will share with you a few topics that struck me and that I was very angry about – and this will generally have to do with climate change, solar or wind power, plastic pollution, environmental degradation, wildlife, the oceans and other related topics.

Assaad Razzouk

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