Michael Molitor gave a public lecture last night at UNSW, where he now holds an adjunct professorship with the Climate Change Research Centre between appointments as a ‘Carbon Manager’ for PriceWaterhouseCooper. The talk was entitled Climate Change: ‘Show Me The Money’, which is the famous line from Tom Cruise’s character in Jerry Maguire – so when Molitor spoke passionately of the ‘Governor of NSW’, I was thankful that there were no couches onstage. Though, to be fair, the event showcased a fascinating, eclectic and sometimes contradictory mix of bravado-filled insights on the problem of climate change from someone on the inner circle of business elites. The message was familiar enough – that we aren’t moving quickly enough for the scale of the problem – his analysis, however, was somewhat less conventional.
The ‘good news’ began with the observation that our ‘carbon productivity’, that is, our economic outputs from machines relative to their spewing waste into the global carbon dump has actually been increasing over time. Global capital markets are awake to this productivity challenge through the Carbon Disclosure Project, which he took pains to point out was commissioned by a group of fund managers that control around 40% of the world’s money. And disclosure is effecting investments: Engineers have managed extraordinary, double digit efficiency gains in the latest batch of Boeing’s jet turbines due to the enormous incentives in place; GE’s ‘Eco-magination’ project has netted the company $10bn; between the buyout of hulabaloo over the sale price of TXU, savvy investors in Kansas and other market awareness, 69 of the last 84 planned coal-fired plants have been scrapped – all without the meddling hand of government mandated emissions caps. I couldn’t help but think of Weber’s The Protestant Work Ethic and the Spirit of Capitalism as he began proselytising about Australia and other countries need to ‘correct their low carbon productivity trends.’ Of course our greatest obstacle is the ‘coal value chain’, which leaves Australia’s per capita emissions 28x (41x) the 1 tonne of CO2e he suggested was sustainable.
For Molitor, the ‘bad news’ was that, in terms of gross emissions, all these wonderful efficiency gains and greenwashing had been absolutely swamped by demand increase. He referenced Ehrlich’s simple equation that ‘impact = population x consumption x technology’ very early on, only to equivocate that, ‘Italy’s birth rate is low, so maybe we need to rethink this dilemma.’ Well, Italy is by no means representative of the rest of the world in this respect so his agnosticism on this point seemed completely out of place. This was where the libertarian techno-optimism shone through as he referenced algal biofuel and reminded us that Steve Jobs and Wozniak negotiated an intellectual property exemption in their contracts with HP to build the first Apple prototype. He emphasised the effect of perverse incentives too. 200 000+ Priuses registered in California emitted more than the cars they replaced because people were driving further: they could use bus lanes alone and park cheaply in town. Despite more efficient engines, air travel is set to skyrocket in coming years.
Unfortunately, the implications of all this for the status-quo weren’t at all made explicit until question time – which thankfully wasn’t all the butt-kissing from enthusiastic members of the public, as these public lectures almost invariably descend into. He briefly acknowledged the resource dependence of economic activity towards the end, and it was telling that this seemed more like a footnote to all the salivating over how much money we should need to ‘get out of bed in the morning’. When a visiting professor challenged him on ‘getting our own house in order’ before asking India, China et al to work within caps, he suggested commodifying the potential carbon productivity gains could achieve results without imposing caps. If assessing additionality was the transparent, fair and equitable process his figures of ideal per capita emissions suggested we needed, then I could see the appeal of this approach. Unlike Michael Grubb, who advocated a broad normative approach to supporting sustainable energy generation infrastructure, the spectre of ‘not picking winners’ was an unfortunate presence.
The next talk hosted by the Climate Change Research Centre will (hopefully) be Rajendra K. Pachauri, when he comes to Australia in October.
Good post Molitor and it makes me wonder if Australian business, or at least some sections of it, have already factored in a carbon tax or the price implications of a cap without waiting until 2010 for the Rudd Government to adopt one or t’other or none.
Pablo: from all I’ve read, most businesses already have.
It’s just the coal industry fighting it tooth and nail (or, more precisely, fighting to nobble it for as long as possible).
It’s like Big Tobacco all over again – fight for as long as possible, then stall for time. Then shift to the third world.
Unfortunately for us, shifting to the third world doesn’t make any difference this time around.
Reducing Australia’s C)2 emissions to 1tpa means the sort of economy you can see in rural India today.
Why is this vital when global temperatures show no upward trend over the past 8 or 10 years?
Is there really much difference between you people and Pol Pot?
if anyone can’t get enough of the forums-on-climate-change-held-at-unsw, assorted student groups including my christian one have got together to put on one next week! come!
we have someone talking about technological issues, someone talking about social justice issues, someone talking about what students can do… it’s way cooler than ’show me the money’ 
thursday may 1 2008
5.30-7pm
law theatre, G04, unsw
Must…resist…urge…to…feed…troll
Oh, hang it.
Absolutely none, Bill. In fact, I personally have killed over 200,000 political opponents. Why just yesterday I was out in the back shed arranging the skulls of my enemies into neat little piles.
Ask yourself this: Why is it vital to conserve water when Sydney and Brisbane’s dam levels have doubled in the last year or two?
Thanks for the report, Robert.
I’m not sure what he means by ‘carbon productivity’. The term I’m familiar with is ‘carbon intensity’. Canadell et al looked at the carbon intensity of gross world product which “provides a measure of CO2 emissions required to produce a unit of economic activity at a global scale.” They found that it had been reducing consistently (good) up to 2000 but since then it is increasing (see also slide 7 of this presentation.)
This presumably has something to do with what’s going on in China and India.
There is another problem with what they are doing in China and India. Ken Caldeira and his mates have found that coal fired power stations have a net cooling effect for the first seven years. Up to that time the cooling effect of the aerosols produced is greater than the warming effect of the CO2. Aerosols wash out but a substantial fraction of the CO2 stays so after seven years the accumulating CO2 produces a net warming.
I don’t know how this all nets out with the frenzied building of new coal fired power stations in India and China, but I suspect the worst is yet to come.
That’s the worst thing I’ve read today. Thanks, Brian!
Glad to be of help, wbb!
Re 6 above, sorry dk.au, I thought it was Robert’s post. Late at night I’m often zombie-like. I had wondered what Robert was doing in Sydney and still didn’t twig!
haha thanks Brian. Good to know I’ve finally reached Robert’s level of eruditeness with these matters
Carbon Productivity was his neologism, I believe.
CP = GDP/CO2e
Which is useless without coherent (policy) frameworks.
Youtube of part of the talk is up
http://au.youtube.com/watch?v=Lw7u08ALhnk