Climate Politics

Voting has ended: Grist readers have chosen top eco-hero and eco-villain of 2008

Way back before the holiday season, we posted our lists of green heroes and green villains for 2008. Because we are totally Web 3.7 participatorynewmediacroudsourcingcitizenjournalist types, we even opened it up to your votes!

So you voted. And voted, and voted. Then, on Jan. 8, we warned you: only 24 hours left to vote!

Turns out we really meant, er, 24 days. Give or take a week. So you voted some more. But now voting's really closed! For realz. And, without further ado (or delay), we're ready to declare winners.

With 730 votes ... the Grist 2008 Eco-Hero of the Year is ... [drum roll]

The Sierra Club's Bruce Nilles! [crowd roars]

Nilles is director of the Sierra Club's National Coal Campaign, which has helped coordinate the extraordinary grassroots movement that's sprung up in the last few years to fight against new coal plants. This victory for Nilles is really a victory for that movement, which has -- with very little help from the establishment or resources from big-money funders -- pulled off an amazing string of victories that is still going on. Nice job, movement. And nice job, Bruce.

And now, turning to less pleasant matters:

With 405 votes ... the Grist 2008 Eco-Villain of the year is ...

Flaccid Apparatchik Stephen Johnson! [boos, angry shouts]

Johnson, who most everybody thought would be a harmless technocrat, turned out to be one of the worst U.S. EPA administrators in the nation's history, blatantly ignoring the advice of EPA staff and scientists in order to carry out the political hatchet jobs handed down by Dick Cheney. We will miss writing headlines about you, Mr. Johnson. But that's about all we will miss.

Onward to 2009 [already in progress]!

While Geithner's bailout flounders, it's time to explore other financial models

Things are looking a bit grim for the U.S. banking system.

On Tuesday morning, U.S. Treasury chief Tim Geithner rolled out his new plan for rescuing the banks, committing more than $1 trillion to convince private investors to buy up the "toxic assets" that are fouling up the system.

Lobbyists for the big banks praised the plan, the New York Times reported. Investors were less impressed. Shares of Bank of America, Citigroup, and Morgan Stanley plunged by well more than 10 percent Tuesday; Goldman Sachs fell by a relatively merciful 8 percent. Overall, the Dow Jones Industrial Average shed nearly 400 points.

Why the ugly reaction? Martin Wolf, the venerable markets reporter for the Financial Times, ventured an answer on a TV news program (part I and part II): the U.S. banking system appears to be insolvent, sunk under the weight of bad investments. According to Wolf, the Obama team is too "politically frightened" to tell the public and investors that our banking system has essentially failed.

To a casual observer me, Wolf's analysis seems obviously right. What's weighing the system down is bad real estate bets. Essentially, our bank execs -- decorated with fancy b-school degrees and robustly compensated for their trouble -- bet heavily U.S. real estate prices would rise indefinitely. Now that prices have plunged, they're left with reams of essentially worthless mortgage-backed paper. And as the economy continues to unravel, real estate prices look set to continue falling -- which means still more of the assets held by the banks will become "toxic," i.e., worthless.

And here's where we get to the trouble with the Geithner plan: He seems to be assuming that private investors can be convinced, by government guarantees and financing, to buy assets that are essentially worth nothing. But where's the upside in buying worthless assets in the first place?

One of two outcomes now look likely: 1) a wholesale nationalization of the U.S. banks (an extremely dicey proposition for a Democratic president); 2) or the the descent into bancruptcy of a vast and iconic bank like Citigroup -- with who knows what consequences.

None of this should be contemplated with panic. Rather, as the banking system teeters, we should be thinking about other finance models, other styles of economic development. In the weeks to come, I'll be focusing on other models laid out in Woody Tasch's Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered and Gus Speth's The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability.

Update [2009-2-11 7:42:54 by Tom Philpott]:

Martin Wolf has now aired his dire view in the pages of the FT. Wolf lays out two scenarios for the banks: the rosy one being acted on by the Obama team, and a more urgent one, which he says he says he has "little doubt" is correct. The second scenario is as follows:

Under the second view, a sizeable proportion of [U.S.] financial institutions are insolvent: their assets are, under plausible assumptions, worth less than their liabilities. The International Monetary Fund argues that potential losses on US-originated credit assets alone are now $2,200bn (€1,700bn, £1,500bn), up from $1,400bn just last October. This is almost identical to the latest estimates from Goldman Sachs. In recent comments to the Financial Times, Nouriel Roubini of RGE Monitor and the Stern School of New York University estimates peak losses on US-generated assets at $3,600bn. Fortunately for the US, half of these losses will fall abroad. But, the rest of the world will strike back: as the world economy implodes, huge losses abroad - on sovereign, housing and corporate debt - will surely fall on US institutions, with dire effects.

E.U. to launch environment project ‘auction’

BRUSSELS — The European Union will offer almost 100 environmental projects from developing countries around the world in an auction to try to attract donors to back them, the European Commission said Tuesday. The “Auction Floor,” to be held in Brussels on March 13, will allow developing projects to meet potential donors such as local […]

Green(ish) news from around the capitol

• Sen. Maria Cantwell (D-Wash.) is expected to be named the new chair of the energy subcommittee of the Energy and Natural Resources Committee on Wednesday, according to a press release from her office. • First Lady Michelle Obama stopped by the Department of Interior on Monday to visit with Secretary Ken Salazar and employees, […]

Obama administration puts halt to Bush-era oil and gas policies

In a rebuke of the Bush administration’s oil and gas policies, Interior Secretary Ken Salazar on Tuesday announced that his department is shelving a plan to open new areas of the outer continental shelf to oil and gas drilling. The agency will gather more public input before deciding how to proceed on offshore drilling, and […]

Vilsack continues to lay the groundwork for reform

There was some curiosity as to what stance U.S. Department of Agriculture chief Tom Vilsack would take in his speech this week before the National Association of Wheat Growers. Surprisingly, he came as the bearer of bad tidings. According to this report:

Vilsack called on farmers to accept the political reality that U.S. farm program direct payments are under fire both at home and abroad and therefore farmers should develop other sources of income. In his remarks to the groups he said he intends to promote a far more diversified income base for the farm sector, saying that windmills and biofuels should definitely be part of the income mix and that organic agriculture will also play an increasing role.

Um, what? Leave aside the "prepare for a pay cut" thing for a moment. Did Vilsack just use the O-word in front of a bunch of large-scale industrial farmers? Once they stopped laughing, I wonder if they starting thinking about the implications of what he was saying. Maybe this guy is for real.

Vilsack's comments certainly jibe with his plans for the new USDA Office for Ecosystem Services and Markets -- an entity that is charged with cataloging the climate impacts of forestry and farming practices. The Christian Science Monitor characterized it thusly:

In Virginia, Big Coal beats efficiency by one vote

At the beginning of the week, I wrote over at Huffington Post about how the State of Virginia could be poised to take significant action to bolster the economy and help the climate by passing an energy efficiency bill introduced by State Senator Donald McEachin.

Psych!

As reported by Lauren Glickman at the Chesapeake Climate Action Network, Democratic Majority Leader Dick Saslaw from the Northern Virginia suburbs cast the tie-breaking vote to keep green jobs out of his state. For Saslaw, Virginia is apparently for unemployment ... and pollution.

Not surprisingly, Saslaw has received more money from Dominion Power, the state's leading burner of coal fired energy, than any other legislator since 2004.

Perhaps if these were normal times, this would be just another story of polluter influence. But in these extraordinary -- and extraordinarily tough -- times, it's something more. Article XI, a great new Virginia blog, reports that the bill would "save Virginians approximately $15 billion on electric bills by the year 2025," creating thousands of jobs. Investing in energy efficiency produces more than two and a half times the number of jobs as investments in coal.

Opposing energy efficiency means killing jobs -- something that Saslaw will have to take home to his constituents -- and everybody in Virginia who was hoping the Democratic leadership would actually stand up for jobs and an end to polluter corruption. You can call Saslaw and let him know how you feel about his vote at 804-698-7535.

What are the prospects for climate legislation in the House?

I think Energy and Commerce Committee Chair Waxman (D-Calif.) may be making both a strategic and a tactical mistake in pushing to get a climate bill out of committee by Memorial Day. I say this as someone who was delighted that Waxman defeated Dingell for the chairmanship.

Strategically, as an extended must-read analysis in E&E Daily ($ub. req'd, reprinted below) explains:

... in the Energy and Commerce Committee, it is often stated that a legislative victory there foretells success when the bill reaches the entire House. "If you do it in committee, I think you do a huge amount of what you need to do for the floor," said Manik Roy, vice president of federal outreach at the Pew Center on Global Climate Change.

Obama isn't going to see a climate bill on his desk this year (see here). Even Speaker Pelosi was originally skeptical the House would pass cap-and-trade this year.

Obama certainly isn't going to devote a lot of time and political effort to raising the issue's profile in the next three months -- nor should he.

So why push such an important and difficult vote before the ground has been laid for it, when you will be operating with one hand tied behind your back? At a time when the administration, public, and media are focused squarely on the greatest economic mess since the Great Depression? Even if Waxman succeeds under such circumstances, he may be stuck with a weaker bill than he otherwise could have gotten.

I will explore what I see as Waxman's tactical mistake -- trying to put energy legislation into his climate bill -- in a later post.

Here is the full E&E Daily story:

Senate Foreign Relations Committee leaders urge action to avoid deforestation

Sens. John Kerry (D-Mass.) and Dick Lugar (R-Ind.), leaders of the Senate Foreign Relations Committee, called on Monday for action to prevent deforestation and thereby slow down climate change. Clearing and burning forests accounts for 20 percent of global carbon dioxide emissions. “There’s no point in words. It’s time for action,” Kerry told the crowd […]

Obama talks tough on energy in first prime-time press conference

President Obama had some firm words for critics of his economic stimulus plan in his first presidential news conference on Monday night, using some of his most forceful comments to defend the green energy investments in the plan. “Why would that be a waste of federal money?” asked Obama. “We’re creating jobs immediately by weatherizing […]