Trump can't stop the climate progress
Often discoveries occur independently at the same time in different places. It’s one of the odd things about human progress. As part of our launch of the Morphic Ethical Equities Fund, that debuts on the ASX next month and applications closing on the 19th April, we published an optimistic note that suggested that if we want to confront and beat climate change, using capitalism and individuals changing their buying choices, the world could overcome hurdles, despite a lack of progress or even downright opposition from some governments.
It’s pleasing then to read in the New York Times over the weekend a large article written by former Mayor and billionaire, Michael Bloomberg, that argues the same point as what we argued – use self-interest and capitalism to move forward and address climate change. For readers we have re-produced the article below.
Make your self-interest work for the interest of everyone by harnessing capitalism for change. The time for change is now.
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Climate Progress, With or Without Trump
By MICHAEL R. BLOOMBERG
President Trump’s unfortunate and misguided rollback of environmental protections has led to a depressing and widespread belief that the United States can no longer meet its commitment under the Paris climate change agreement. But here’s the good news: It’s wrong.
No matter what roadblocks the White House and Congress throw up, the United States can — and I’m confident, will — meet the commitment it made in Paris in 2015 to reduce greenhouse gas emissions that are warming the planet. Let me explain why, and why correcting the false perception is so important.
Those who believe that the Trump administration will end American leadership on climate change are making the same mistake as those who believe that it will put coal miners back to work: overestimating Washington’s ability to influence energy markets, and underestimating the role that cities, states, businesses and consumers are playing in driving down emissions on their own.
Though few people realize it, more than 250 coal plants — almost half of the total number in this country — have announced in recent years that they will close or switch to cleaner fuels. Washington isn’t putting these plants out of business; the Obama administration’s Clean Power Plan hasn’t even gone into effect yet.
They are closing because consumers are demanding energy from sources that don’t poison their air and water, and because energy companies are providing cleaner and cheaper alternatives. When two coal plant closings were announced last week, in southern Ohio, the company explained that they were no longer “economically viable.” That’s increasingly true for the whole industry.
A week before President Trump signed the executive order to begin rolling back the Clean Power Plan, Moody’s Investor Service released a report concluding that wind power could displace up to two-thirds of coal-fired power production in 15 Midwestern states. The reason? The average cost of wind power has dropped to $20 per megawatt, compared with the more than $30 cost per megawatt for electricity from many coal plants in the region. Why would consumers pay more for a power source that may kill them?
In 2010, airborne coal pollution was killing 13,000 Americans a year, according to the Clean Air Task Force, a nonprofit environmental group. Today, that number is about 7,500. When politicians talk about the “war on coal,” they never mention the lives being saved.
There is virtually nothing the Trump administration can do to stop advanced technology and consumer preferences from driving down coal’s market share still further. (A decade ago, coal was the source of half of American electricity production; today it’s down to one-third.) In fact, even if the Clean Power Plan disappears entirely, we would still be in a position to meet our Paris commitment, which is to reduce greenhouse gas emissions 26 percent below 2005 levels by 2025.
Consider the data. When we made the commitment in Paris, we were already about a third of the way there, thanks mostly to the closing of so many coal plants. The Sierra Club’s Beyond Coal campaign, which works to replace coal with cleaner forms of energy (and which my foundation supports), projects that more plant closings will get us to nearly two-thirds of our goal.
In combination with existing federal policies that can’t be undone, like vehicle fuel efficiency standards through model year 2021, the last third can be achieved by cities and businesses that are taking action to cut pollution and improve their energy efficiency. This week, many of the 81 major corporations (including Apple and Wal-Mart) that signed a pledge in 2015 to reduce their emissions reaffirmed their commitments, and Anheuser-Busch InBev announced that it aims to get 100 percent of its energy from renewable sources by 2025. (My company is pursuing the same goal.)
No mandate from Washington is forcing these companies to act — just their own self-interest.
Cities, too, are acting out of self-interest. By improving their air quality and becoming greener, cities turn into more attractive places to live and work. And where people want to live and work, businesses want to invest. That’s Economics 101, and mayors understand it even when Washington doesn’t.
In both red and blue states, cities — which account for about two-thirds of the country’s emissions — are taking the lead in the fight against climate change. More than 130 American cities have joined the Global Covenant of Mayors for Climate and Energy, and all are determined to see that we meet our Paris goal. Their local policies — expanding mass transit, increasing the energy efficiency of their buildings, installing electric vehicle charging stations, creating bike share programs, planting trees, to name just a few — will help ensure we do.
There is a real danger in failing to recognize the tremendous progress we’re making. Claims that the United States will no longer be able to meet its Paris obligations give other countries an excuse to walk away from theirs. How terrible it would be if a misunderstanding of American climate leadership — which is not based in Washington and never has been — led to an unraveling of the Paris agreement.
I wish President Trump and his administration would recognize the health, economic and environmental benefits of tackling climate change. But their failure to do so is no reason to be despondent. Thanks to forces beyond the Washington Beltway that have reached a critical mass, we should be more optimistic than ever about our ability to lead — and win — the fight against climate change.
Originally published in the New York Times.
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Chad co-founded Morphic Asset Management in 2012. As a stock picker Chad is also a generalist but has strong regional knowledge of Europe and the Americas. He has also been awarded the CFA Charter.