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First published by The Penguin Press, a member of Penguin Group (USA) LLC, 2014
Copyright © 2014 by McKenzie Funk
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Photographs by the author
ISBN 978-0-698-15156-7
Version_1
For Jenny and Wilson.
(Mostly, she says, for him.)
CONTENTS
TITLE PAGE
COPYRIGHT
DEDICATION
INTRODUCTION
PART ONE
THE MELT
1. COLD RUSH: Canada Defends the Northwest Passage
2. SHELL GAMES: When an Oil Company Believes in Climate Change
3. GREENLAND RISING: An Independence Movement Heats Up
4. FATHER OF INVENTION: Israel Saves the Melting Alps
PART TWO
THE DROUGHT
5. TOO BIG TO BURN: Public Fires, Private Firefighters
6. UPHILL TO MONEY: Where Water Runs When It Runs Out
7. FARMLAND GRAB: Wall Street Goes to South Sudan
8. GREEN WALL, BLACK WALL: Africa Tries to Keep the Sahara at Bay; Europe Tries to Keep Africa at Bay
PART THREE
THE DELUGE
9. GREAT WALL OF INDIA: What to Do About the Bangladesh Problem
10. SEAWALLS FOR SALE: Why the Netherlands Loves Sea-Level Rise
11. BETTER THINGS FOR BETTER LIVING: Climate Genetics
12. PROBLEM SOLVED: Our Geoengineered Future
EPILOGUE: MAGICAL THINKING
PHOTOGRAPHS
ACKNOWLEDGMENTS
NOTES ON SOURCE
INDEX
INTRODUCTION
The contract had called for either a boa or an anaconda, whichever would best handle the crowds, and in the end the bankers got the latter: a green anaconda, six feet long and eighty-five pounds, which hung from the neck of a long-haired snake handler who lurked amid the exotic plants, next to the fake waterfall and the model dressed in “Amazonian” garb. Nearby were two scarlet macaws in wire cages, a Brazilian dance troupe, and a hut offering free organic smoothies. At the base of an eighteen-foot waterfall were giant koi, swimming in a pond: forty-five hundred gallons of warm, filtered water that would soon be dumped into the East River. The jungle was in a tent that was on the promenade at the South Street Seaport, in lower Manhattan. Thirty by sixty feet, suffused with a light mist, and heated to eighty degrees, the tent had white sides and a clear roof through which visitors could just make out the skyscrapers of Wall Street. It was cold outside, a typical thirty-nine-degree February day in early-twenty-first-century New York, so those beckoned inside by the street team—two models walking the streets to entice passersby to the event—had to quickly shed their jackets and scarves, so stark was the difference in temperature. Which was, of course, the point.
The stunt was a coming-out party, the most expensive stop on Deutsche Bank’s eighty-event “The Investment Climate Is Changing” road show held across the United States. In scale and imagination, it was rivaled only by the ski village and ninety-foot snowboard slope the bank had constructed a few weeks earlier along Rodeo Drive in Beverly Hills: chalets decorated with deer-antler chandeliers and wooden snowshoes, Deutsche Bank–branded ice sculptures, models dressed as snow bunnies, bottled water from Iceland, faux snow blown down from the roof of the Versace store, thirty tons of more realistic snow created by a wood chipper and a freezer truck full of ice blocks, and two pro snowboarders who would later complain that nobody had built them a proper jump. Together, the Manhattan and Beverly Hills events cost $1.5 million, but they were carbon neutral, the bankers boasted, their greenhouse emissions offset by investments in a biogas project in India. At South Street Seaport, every attendee was given a certificate from the Carbon Credit Company as proof. The jungle party, which lasted three hours, produced 152 tons of greenhouse gases, which the average Indian would need three lifetimes to match.
Before a DJ set by the Brazilian Girls—a group with no actual Brazilians and only one girl—the bankers held a press conference. It was early 2008, and as the world was still reeling from a record melt in the Arctic and a scary film by Al Gore and a bleak report by the Intergovernmental Panel on Climate Change (IPCC), half a dozen major investment houses had launched global-warming-themed mutual funds. Deutsche Bank’s was the $2.9 billion DWS Climate Change Fund. The jungle event was meant to promote it. “Without taking a position on climate change,” a press release had explained, the “DWS Climate Change Fund is on the cutting edge of climate change investing.” The event’s objective was “not simply to show that climate change is happening,” said the executive Axel Schwarzer, “but that it creates related climate change investment opportunities.” Another release went further. “The debate around climate change is shifting away from cost and risk,” it said, “toward the question of how to capitalize on exciting opportunities.” Nothing as big and universal as climate change could be all bad. An ecological catastrophe was not necessarily a financial catastrophe for everyone.
Deutsche Bank’s chief climate strategist, Mark Fulton, worked in midtown in a building on Park Avenue, and I visited him there after the road show was done, clearing security and then riding a silent elevator to the twenty-seventh floor. His was a corner office, but it was small and cluttered with papers, and Fulton, an Oxford-educated Australian, looked as much scientist as capitalist. His desire to fight climate change was genuine. He told me he’d read the Club of Rome’s Limits to Growth—a neo-Malthusian take on the planet’s carrying capacity—as a schoolboy in the 1970s. “It made quite an impact,” he said. “They were talking about everything running out: ‘What are we going to do? We have to change the way we live!’” Instead of working for Greenpeace, which he’d considered after graduation, he became a stockbroker, then an analyst, and he’d eventually helped Deutsche Bank identify global warming as a “megatrend” that could generate profits for decades. “It’s always helped me, climate change, in my career,” he joked.
While the DWS fund invested most heavily in the technology to build a greener world—in wind power and solar power, in smart grids and smarter electrical meters—it had bought other stocks, too: companies that fit the portfolio not because they could help fight climate change but because the warmer the world, the less habitable it became, the bigger the windfall. They were a tacit recognition that we were already failing to stop climate change. There was the planet’s largest water company, Veolia, which manages pipes and builds desalination plants in seventy-four countries on five continents. Monsanto and Syngenta, ag-biotech giants that were tweaking genes to develop drought-resistant crops. And Viterra, a fast-growing agribusiness in temperate Canada. The fund also had shares of Duoyuan Global Water, one of the biggest water-treatment companies in desiccating China, and two fertilizer multinationals, Yara and Agrium. When I asked Fulton how the bank planned to capitalize on rising sea levels, he mentioned a small play in a Dutch dredging company,
Royal Boskalis, which had just rebuilt an island in the Maldives inundated by the 2004 tsunami. “Where are you going to get seawall expertise but from the Dutch?” he asked.
Other climate investors told a similar story. They bought clean tech, green tech, the building blocks of the new, low-carbon economy—but they were also starting to hedge. In London, the Schroder Global Climate Change Fund was investing in Russian farmland—cheap, fertile soil suddenly made dear by milder winters and drought-fueled global food crises—and its manager was taking the logic a step further, buying stock in supermarket chains such as Carrefour and Tesco. “If climate change will be a negative for crop yields,” he told me, “then people will just have to spend more on food. Retailers are a clear beneficiary.” Across town, another fund manager explained why he was bullish on the reinsurers Munich Re and Swiss Re. “As natural disasters start to be more common,” he said, “as climate change starts to cause flooding and droughts, insurance companies—reinsurers in particular—should get pricing power.” Because it allows insurers to jack up rates, “hurricane season is actually quite a positive thing.” A partner at a storied Wall Street investment bank showed me photographs of Ukrainian farmland and said his firm had tried to buy up “vast tracts” of it. Soviet-era collective farms had reverted to “pseudo-subsistence agriculture,” he said. “You could come to these guys and get thousands of hectares for a few bottles of vodka and, like, two months of grain. You could literally give them vodka and grain.”
In the run-up to successive climate conferences in Copenhagen, Cancún, Durban, and Doha, as everyone else was fretting about polar bears and electric cars, some fund managers worried I would misunderstand them—that I would mistake them for starry-eyed activists, that I would mistake theirs for just another green or socially responsible fund. “A lot of people think, ‘How do you invest in climate change?’ and essentially come up with one or two or maybe three areas, like alternative energy,” Sophie Horsfall, a manager of Britain’s F&C Global Climate Opportunities Fund, told me. “For us, well, there is an awful lot more to it. We have to separate out the ethical values. We have to move away from the environmental issues. We have to take a step back.” I must have looked puzzled. “We have to think about the reality of climate change,” she continued. “It is quite difficult, isn’t it?”
• • •
FOR DECADES WE have all known, at some level, about global warming. As a point of scientific inquiry it is decades old, first identified in the 1800s by John Tyndall and Svante Arrhenius, but as a source of popular anxiety and conversation it dates to the first sophisticated computer models of the early 1970s and the first World Climate Conference in 1979 and landmark congressional testimony by the NASA atmospheric physicist James Hansen in 1988. It has been around long enough to become a cliché—I thank it for the heat wave I’m experiencing in Seattle as I write this—and long enough to have birthed a newer cliché: the idea that we have so changed the planet with our engineering and our emissions that we now live in the Anthropocene, a new geologic epoch of man’s own creation. Long enough, certainly, for something to have been done about it. In the new millennium, which has brought us Al Gore’s Inconvenient Truth, Lord Nicholas Stern’s seven-hundred-page Economics of Climate Change, and a string of failed climate legislation and UN conferences, the warnings have been ever louder and more sustained. The atmospheric concentration of carbon dioxide, our principal contribution to the climate and the principal driver of warming, has only been rising. It is now 40 percent higher than preindustrial levels, higher than it has been anytime in the last 800,000 years. In New York’s Madison Square Garden, a seventy-foot doomsday clock, recently unveiled by Deutsche Bank, is tracking greenhouse-gas levels in real time: 2 billion metric tons added each month, or 800 a second, for a total of 3.7 trillion tons and counting. The ticker has thirteen red digits, but when you stare at it from Seventh Avenue, the last three are a blur. They’re spinning too quickly to see.
This book is about how we’re preparing for the world we seem hell-bent on creating. It’s about climate change, but not about the science of it, nor the politics, nor directly about how we can or why we should stop it. Instead, it’s about bets being placed on a simple, cynical premise: that we won’t stop it anytime soon. It’s about people, and mostly it’s about people like me: northerners from the developed world—historically the emitter countries, as we’re called—who occupy the high, dry ground, whether real or metaphorical.
I’m interested in climate change as a driver of human behavior—as a case study, the ultimate case study, in how we confront crisis. Warming will reshape the planet, and in broad strokes we already know how: Hot places will get hotter. Wet places will get wetter. Ice will simply melt. Poor, mostly tropical countries, those least responsible for the consumption that fuels the factories that produce the emissions that cause the warming, will be hit hardest, but wealthier, higher-latitude regions—Europe, Canada, the United States—are not entirely immune. The change is so vast, so universal, that it seems to test the limits of human reason. So it should not be surprising that the ideologies that led us here, those that have guided the postindustrial age—techno-lust and hyper-individualism, conflation of growth with progress, unflagging faith in unfettered markets—are the same ones many now rely on as we try to find a way out. Nowhere is humankind’s mix of vision and tunnel vision more apparent than in how we’re planning for a warmed world.
The idea that people are irrational has lately been in vogue. We can thank the global financial crisis for that. Behavioral economists have reminded us that the market, far from being a collection of fully logical individuals, is hostage to Keynesian “animal spirits,” the emotions, prejudices, impulses, and shortcuts that are part of nearly every human decision and every financial bubble—and part, no doubt, of our apathy about reducing carbon emissions. In the United States, nearly 98 percent of the federal climate-research budget goes to the hard sciences, which have produced mounds of evidence for global warming—enough to make a believer of anyone who gives it an honest look—and produced increasingly refined computer models predicting an increasingly dire future. One recent prediction, from MIT, is of a median warming of 5.2 degrees Celsius by 2100 if we don’t curtail emissions—a temperature spike that campaigners believe could entirely melt the polar ice cap in summertime, turn parts of Central America and the southern United States into a dust bowl, and wipe island nations off the map. The remaining 2 percent of the federal research budget goes to social scientists, such as those with Columbia University’s Center for Research on Environmental Decisions, who probe what may now be the most important question: If we know the risks, why aren’t we doing anything? The center’s director, Elke Weber, suggests that at both levels where humans make their decisions—emotional and analytical—there are roadblocks. The emotional block: What we don’t see doesn’t scare us. “The time-delayed, abstract, and often statistical nature of the risks of global warming does not evoke strong visceral reactions,” Weber writes. At the analytical level, there is, along with the tension between individual and systemic risk—an apparent tragedy of the commons—something economists call hyperbolic discounting. It goes like this: Offer to give someone either $5 today or $10 next year, and he’ll probably take the $5.
Among many activists, politicians, and scientists, the assumption is that climate change now suffers mainly from a PR problem: If the proper nudges can be found or the reality of it finally made visceral, the public will take action. Unspoken and scarcely examined is a second, much bigger assumption: that “taking action” means trying to cut carbon emissions. That taking action will take a certain shape: Green roofs. Carbon caps. Green cars. Solar panels. Footpaths. Forests. Fluorescent bulbs. Bicycles. Insulation. Algae. Inflated tires. Showers. Clotheslines. Recycling. Locavorism. Light-rail. Wind farms. Vegetarianism. Heat pumps. Telecommuting. Smaller homes. Smaller families. Smaller lives. We hope our collective fear of global warming will push us inevitably tow
ard collective behavior. But what if the world as we know it goes on even as the Earth as we know it begins to disappear? There’s another possible response to melting ice caps and rising sea levels, to the reality of climate change—a response that is tribal, primal, profit-driven, short-term, and not at all idealistic. Every man for himself. Every business for itself. Every city for itself. Every country for itself. There’s the possibility that we take the $5.
• • •
SPEND AN AFTERNOON in the right part of the Arctic, perhaps in the company of a Russian or an Icelander or an oil executive, listen to the plans being hatched, and you can experience anew the carnival atmosphere of Deutsche Bank’s jungle tent. The Arctic was where I did the first reporting for this book, and it was where I caught my first whiff of giddiness about climate change, of opportunism amid environmental crisis. There was oil under the ice. There were new shipping lanes emerging over the pole. There were strawberries sprouting in Greenland. The high north was the first place where warming had become not an invisible menace but a daily reality, thus the first place where I could actually witness people’s reactions to it. I began traveling the rest of the globe with the same intent—to document present-day preparations for a warmer world, to observe what was happening rather than theorize about what could happen.
Global warming’s physical impacts, the impetus for the plans and projects I investigated, can be separated into three broad categories: melt, drought, and deluge. Accordingly, this is a book in three parts. Part One, “The Melt,” is set against the liquefaction of the world’s ice sheets and glaciers, a process that is only accelerating: In recorded history, the Northwest Passage and the Northeast Passage have never, until today, become ice-free and thus open to commercial shipping, and the Arctic ice cap has never been smaller than it was in the summers of 2007, 2008, 2009, 2010, 2011, and especially 2012, when 4.57 million square miles, an area larger than the United States, melted away. Part Two, “The Drought,” discusses the large-scale reordering of our planet’s hydrology such that rain falls at different times, in different places, and deserts appear where there were none. In some places, drought is a result of melt; mountain snowfields and glaciers are the planet’s best natural water reservoirs, and they are dramatically receding. That the drought is already beginning is evidenced not by specific events but by a pattern of them: wildfires in Colorado, water woes in northern China, desertification in Spain, food riots in Senegal, and the fact that to describe the recent state of Australia’s breadbasket, the Murray-Darling basin, the term “drought” was discarded in favor of the more permanent-sounding “dryness.” Part Three, “The Deluge,” addresses what is generally our most distant concern, decades if not centuries out—the rising seas, surging rivers, and superstorms that will threaten island nations and coastal cities. But it is hastened as parched cities drain their aquifers and begin to sink, accelerated as Greenland’s ice cap melts into the sea. And after Hurricane Sandy and Typhoon Bopha and failure after failure to cut global carbon emissions, it is not entirely distant.
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