Tim McDonnell joined Climate Desk after stints at Mother Jones and Sierra magazine. He remains a cheerful guy despite covering climate change all the time. Originally from Tucson, Tim loves tortillas and epic walks.
Leo is pulling his money out of fossil fuels…if he had any there to begin with.
It sounds like a huge, flashy number: $2.6 trillion.
That's probably why the environmental activist group 350.org used it in a headline for a press release today announcing a report on the growing movement to divest from dirty energy companies: "FOSSIL FUEL DIVESTMENT PLEDGES SURPASS $2.6 TRILLION."
But the report itself tells a somewhat different story.
Released this morning at a New York press conference, the report tallied commitments—made by a global assortment of universities, local governments, pension funds, charitable foundations, religious institutions, and more—to sell off investments in the fossil fuel industry. The tactic has become popular with climate activists as a way to call attention to the industry's transgressions against the climate, and maybe even to destabilize its bottom line.
On hand to trumpet the findings: Leonardo DiCaprio, along with the head of the UN climate agency (via video) and a packed room of top brass from environmental groups, clean energy companies, and major foundations. DiCaprio himself joined the list, pledging to divest his personal finances and his foundation's holdings from fossil fuels.
That big number—$2.6 trillion—has nothing to do with the amount of money that is actually being pulled out of fossil fuel stocks.
"To date," the report reads, "436 institutions and 2,040 individuals across 43 countries and representing $2.6 trillion in assets have committed to divest from fossil fuel companies."
"That's real money," said Ellen Dorsey, director of the Wallace Global Fund, in announcing the number, to much applause.
And it is! Pulling that kind of cash out of the fossil fuel juggernaut could land a true financial blow, a clear victory in the global war to stop climate change.
But there's a catch. That big number—$2.6 trillion—has nothing to do with the amount of money that is actually being pulled out of fossil fuel stocks. In fact, the investment consultancy behind today's report has no idea how much money the institutions surveyed have invested in fossil fuels, and thus how much they have pledged to divest.
Instead, that number refers to the total size of all the assets held by those institutions—hence the word "representing" in the quote above from the report. And that's a huge difference.
Here's a perfect example: The report lists the University of California system as a prominent new entry into the divestment movement. Earlier this month, the UC's chief investment officer announced that the system's endowment would sell off its holdings in coal and tar sands oil. Those holdings were worth about $200 million. An undisclosed amount is still invested in oil and gas. But the report uses the full amount of the university's total endowment: $98 billion. That's 490 times higher than the amount of money actually being divested.
So what's the exact portion of the $2.6 trillion that is being divested from fossil fuels? No one knows. Indeed, Dorsey couldn't even confirm that all the institutions listed in the report necessarily had any fossil fuel holdings in their portfolios before they decided to divest. As for DiCaprio, when asked by reporters to clarify the exact amount of his personal stake in fossil fuels, he smiled and waved but kept mum.
"Every investment portfolio is different, and some are exceedingly complex," Dorsey said.
Brad Goz, the director of business development for a New York consultancy that helps institutions figure out how to divest, agreed that it can be difficult to figure out how and where a fund is invested.
"Hedge funds like to keep it opaque," he said. "But that becomes less challenging when CEOs demand [the information]."
The best Dorsey could offer was an estimate based on the portion of the value of the S&P 500 that comes from fossil fuel companies: 3 to 7 percent. In other words, that $2.6 trillion statistic is probably much closer to $182 billion—a pretty small piece of the roughly $6 trillion value of the global market for coal, oil, and gas. Dorsey also clarified that the promised divestments are scheduled to take place over the next five years, not overnight.
When asked by reporters to clarify the exact amount of his personal stake in fossil fuels, DiCaprio smiled and waved but kept mum.
To be fair, the real divestment figure isn't nothing, and there's some evidence that it's growing: When this same analysis was released last year, the reported figure was just $50 billion (compared with $2.6 trillion this year). Still, it's not clear whether any of this is enough to actually draw the notice of corporations like Exxon and Shell, and the report offered no evidence that the divestment campaign has had a specific, tangible impact on share prices.
In an interview following the announcement, May Boeve, director of the activist group 350.org, defended the framing of the announcement, saying she doesn't "think it's misleading."
"The purpose of divestment is to make the point that the [fossil fuel] industry is losing legitimacy," she said. "It's about their reputation, which is less quantifiable but equally damaging."
If she meant that the appearance of a big divestment movement can help promote more divestment, she's probably right. Expect to see more announcements like this over the next few weeks in advance of the upcoming UN climate talks in Paris. Just make sure to read the fine print.
Pope Francis is scheduled to address Congress on Thursday. There's a good chance he'll dwell on two of his signature issues: global poverty and climate change. These issues are not especially popular with congressional Republicans. So perhaps it's a bit surprising that, so far, only one of them has publicly expressed trepidation about the speech.
Of course, no one knows exactly what the Holy Father will say. But here are few of his key ideas, quoted from his climate encyclical this summer, that will be hard for GOP legislators to brush off:
1. Climate change is real and caused by people. Here's a line from the statement that will play pretty poorly in a room where huge numbers of lawmakers dispute the science behind climate change:
It is true that there are other factors (such as volcanic activity, variations in the Earth's orbit and axis, the solar cycle), yet a number of scientific studies indicate that most global warming in recent decades is due to the great concentration of greenhouse gases (carbon dioxide, methane, nitrogen oxides and others) released mainly as a result of human activity.
The pontiff also isn't shy about pointing a finger directly at the deniers:
Many of those who possess more resources and economic or political power seem mostly to be concerned with masking the problems or concealing their symptoms, simply making efforts to reduce some of the negative impacts of climate change.
2. We have to stop burning fossil fuels, and the government should crack down on emissions. Again, from the encyclical:
There is an urgent need to develop policies so that, in the next few years, the emission of carbon dioxide and other highly polluting gases can be drastically reduced, for example, substituting for fossil fuels and developing sources of renewable energy.
Conservatives have slammed President Barack Obama for giving too much support to renewable energy, even though the United States became the world's No. 1 producer of oil and gas for the first time ever under Obama. So the idea that we should cut back on fossil fuels probably won't get much support from congressional Republicans. Meanwhile, Obama's Clean Power Plan, which is precisely the kind of carbon-cutting policy the pope is advocating, has been the target of numerous Republican attacks since it was proposed:
3. Capitalism is at the root of the problem. The pope has been broadly critical of global consumer culture and has linked it to environmental degradation:
These problems are closely linked to a throwaway culture which affects the excluded just as it quickly reduces things to rubbish... We have not yet managed to adopt a circular model of production capable of preserving resources for present and future generations, while limiting as much as possible the use of non-renewable resources, moderating their consumption, maximizing their efficient use, reusing and recycling them.
He also takes issue with the idea (which some environmentalists embrace, as do many conservatives) that private-sector innovation can and/or should play a prominent role in adapting to climate change. According to the pope, the environment cannot be "safeguarded or promoted by market forces."
But there could be one topic on which the pope agrees with Republicans, if not for the same reasons: He is opposed to cap-and-trade policies that would set up a carbon-trading market, which many environmental economists say is the most efficient way to cut emissions. To the pope, "carbon credits" are just another financial market to be exploited by the rich to the detriment of the poor; to Republicans, they're job-killing government overreach.
In any case, it's sure to be an awkward afternoon for Republicans on Capitol Hill.
Investors severely punished Volkswagen when trading opened on Monday morning in Europe, driving the German automaker's stock price off a cliff. The steep decline comes after the US Environmental Protection Agency accused the company of evading federal clean air laws, and its CEO was forced to apologize. The rout wiped away nearly a quarter of the company's share value virtually overnight—about 15.4 billion euros ($17.4 billion), according to Bloomberg. As of Monday morning US time, the price had rebounded a bit.
On Friday, the EPA handed down a damning citation to VW outlining a plot that, while highly nefarious, is pretty impressive in its scope: According to the EPA, the company outfitted half a million diesel-powered cars sold in the United States with software called a "defeat device" that could detect when the car was being officially tested for toxic emissions. During the test, the cars' computers would apply extra pollution controls; for the rest of the time, when the cars were being driven on the road, smog-forming emissions were up to 40 times higher than the legal limit.
It's unclear how far up the chain of command the deception reached. On Sunday, VW CEO Martin Winterkorn said he was "deeply sorry" for breaking the public trust and ordered an internal investigation. That won't stop the ongoing US investigation, which could ultimately result in up to $18 billion in fines. Monday's stock plunge wiped out nearly that same amount.
The Jetta was one of the VW models named in the citation.
Volkswagen produced hundreds of thousands of cars with a device made to intentionally evade air pollution standards, according to a citation issued today by the Environmental Protection Agency.
The EPA alleges that nearly 500,000 VW cars sold in the United States over the last several years were equipped with the device, which the EPA says enabled the onboard computer to detect when the car was undergoing an emissions test. At that time, the engine would operate in a way that complied with emissions standards; at all other times, the car would produce emissions of harmful gases up to 40 times greater than allowed by federal law. The primary gas in question is nitrogen oxide, which causes smog, which is a leading cause of respiratory ailments.
This table from the citation lists the models that were allegedly outfitted with the illegal device. All of the cars in question had diesel engines:
The EPA cites a 2014 study by the International Council on Clean Transportation that found a troubling gap between real-world and laboratory emissions in some diesel cars, without naming specific manufacturers.
"When you test it in the lab, they looked great," said Anup Bandivadekar, one of the study's authors. "But when you actually drive them around, emissions were much higher."
The citation issued today lifted the curtain on the specific cars in question and delineates the federal laws VW is accused of violating. The EPA is continuing to investigate the charges and has passed the citation to the Justice Department, where it will be up to federal prosecutors to prove the charges. Volkswagen could be compelled to fix all the cars and pay up to $3,750 per car (roughly $18 billion altogether) in fines.
In a statement, a Volkswagen spokesperson said the company was cooperating with the investigation but declined to comment further.
When Pope Francis addresses a joint session of Congress next Thursday, there's a pretty good chance he'll talk about climate change, one of his favorite subjects of late. Paul Gosar, a Republican Congressman from Arizona, is not happy about that.
Plenty of climate change deniers, Catholic and not, have expressed their displeasure with the Holy Father over his stance on climate. But Gosar, himself a Catholic, just became the first member of Congress to announce he will boycott the speech because of it.
In a column published in Town Hall yesterday, Gosar wrote:
The earth's climate has been changing since God created it, with or without man. On that, we should all agree…If the Pope wants to devote his life to fighting climate change then he can do so in his personal time. But to promote questionable science as Catholic dogma is ridiculous…
When the Pope chooses to act and talk like a leftist politician, then he can expect to be treated like one.
Obviously, Gosar, a dentist by trade, does not think man-made climate change is a real thing. He also isn't a fan of clean energy: Earlier this year, he sent a letter to the Federal Trade Commission calling for an inquiry into allegedly deceptive trade practices by the solar industry. (It was later revealed that the letter was originally drafted by Arizona's biggest power company and slipped to Gosar's office.) He also wants to impeach the chief of the Environmental Protection Agency and has accused her of perjury.
Apparently, Gosar didn't get the memo that Congress, which is usually where hope for climate action goes to die, is supposed to be on its "best behavior" for the pope's visit.
So far, at least one faith group has called foul on Gosar. John Gehring, the Catholic program director at Faith for Public Life, said in a statement, "This stunning display of disrespect toward Pope Francis from a Catholic elected official shows a profound ignorance about the church's teachings when it comes to stewardship of creation."