Friday, August 30, 2013

We did our divestment

The Water District board voted 7-0 last night to enact our climate divestment policy - no new investments in the top 200 fossil fuel companies, get rid of what we currently have by 2016, and send letters to the state agency managing our pension funds, a state water agency association, and our local government counterparts encouraging them to do the same. Also yesterday, we cut our own compensation by just under 10%, reverting it back to what the board received in 2008.

There was some reasonable discussion of whether we should distinguish the best fossil fuel companies from the rest. We decided to go ahead with the simple divestment from all of them, and consider at a future time whether we should amend the policy in favor of the better companies.

Like I said earlier, this should make us the first water district and third government agency of any kind to complete this step. has a press release here. The San Jose Mercury News published an article, and to make it interesting I'll just copy below mostly just the critical parts:

In the 1980s, hundreds of American cities, states and universities sold their investments in South African companies as part of a protest against that country's former apartheid government.

Now, environmental groups are trying to duplicate that effort, but with global warming polluters in the role of villain. And, just as with South African divestment a generation ago, the Bay Area is at the head of the parade again, prompting cheers from environmentalists and jeers from skeptics who say the whole effort amounts to little more than empty symbolism.... 
"It is unfortunate some people seem to feel supplying consumers with reliable and affordable energy is somehow comparable to apartheid," said Tupper Hull, a spokesman for the Western States Petroleum Association, in Sacramento.

"Petroleum energy provides billions of people worldwide with mobility, comfort, security and economic prosperity, he said."

Hull said that many oil companies "understand the desire to develop new alternative energy sources and reduce our collective carbon footprint" and that many fossil fuel companies are working on renewable energy projects.

Jeremy Carl, an energy expert and research fellow at Stanford's Hoover Institution who has been critical of the tactics of the environmental movement, said that climate change is occurring and is a problem. But rather than divestment, activists should work with companies and governments to promote issues like tax credits to encourage renewable energy research, or a carbon tax that would be offset by tax refunds to the public.

"We've seen people saying the fossil fuel companies are awful, and then driving home in their car and turning on their natural gas-powered electricity," he said. "I find it totally a distasteful and hypocritical way of looking at a serious situation. It trivializes an important issue."

I don't find that very persuasive, somehow. I have no interest in the flack from WSPA but I wonder if it's worth talking to Jeremy Carl, who's only a 15 minute drive away from me in my fossil-fueled car.

Per my previous post, I think the primary effect of these actions are cultural/political and not directly economic. OTOH, there's an economic cost to cultural disfavor - I bet tobacco companies have to pay a premium to hire and retain employees who might otherwise prefer to not kill people for a living. Could work the same way here as another form of cultural tax on carbon.

Video below of every fascinating moment of the discussion, assuming the video works (discussion begins about a minute into the video). It's Item 9.1 if you want to read it as well.

The EV v. gas infrastructure argument cuts both ways

The big challenge for electric vehicles is that we have the societal infrastructure to support gas engines but not electric. Despite that fact, in California the hybrid and EV plug-ins are now 1.8% of the market. Globally and nationally, estimates range from one to three percent of all vehicles in 2019-2020 will be the two types of plug-ins (see page 4).

The infrastructure challenge is real even if "range axiety" is overhyped. To the extent that challenge to plug-ins is met and overcome, though, then the shoe is on the other foot. Every sale of a plug-in vehicle decreases support for the infrastructure supporting gas vehicles. When plugins are taking only one percent of the market, the decrease is insignificant. When they take three percent, it's starting to be significant, and we can expect the effect to increase and to be concentrated in some areas. If nearly two percent of California car sales are electric now, then what will be the percent in a decade, and what will be the situation in the San Francisco and LA metropolitan areas?

There are going to be fewer gas stations and fewer gas engine car servicing businesses. They'll try to adapt but plugins and especially EVs won't need charging stations in the same places and they won't need as much maintenance.

I think we may be about a decade away from hearing the first complaints of range anxiety and range irritation coming from gas vehicle owners in some markets, where they'll have to drive five miles or more out of their way each time they want to gas up, while their plugins can charge whenever they're at home, work, or shopping. The process may accelerate as investors hesitate to put money in the gas vehicle infrastructure, knowing they'll need a number of years to make a profit while their market is shrinking.

I know I'm pretty good at counting my chickens before they hatch, and I recognize that cars have a 10-year lifespan so it takes a while for the existing car population to reflect changes in sales (UPDATE:  per the comments, more like 20 years, although older cars are driven much less). Still, I can see this happening in a decade in some markets, especially where I live.

Tamino uses math to describe how denialists handle data, but I prefer visuals

From Senorgif. Title:  Uh, Not a Good Fit.

Republicans writing the Fall 2014 campaign commercials for Democrats

Prelude here:  a Republican operative with a pre-existing condition and no insurance rethinks the Obamacare thing.


"We're the Jones Family, living right here with you in Houston, and we've been conservative Republicans for as long as we can remember. When Republican leaders told us not to sign up for health insurance on the Obamacare exchanges, we believed them. After signup eligibility closed, Suzie here got hit by a car [PHOTO MONTAGE OF MEDICAL TREATMENT]. We're incredibly relieved that Suzie is recovering, but the bills have ruined us because our Republican leaders told us not to get insurance."

"We can't wait until the eligibility for Obamacare insurance signup starts again, and we'll be signing up."

"We're still conservatives, but something has gone deeply wrong with the Republican Party leadership. We're protecting our family this fall by voting for [DEMOCRATIC CANDIDATE] who will help us get and keep affordable health care. You should do the same."


I don't think the effort to get people to not sign up will be very successful, but it should be successful enough to have plenty of Real People examples, like the hypothetical one above, in contested campaigns throughout the country.

While not all Republicans/conservatives have called for a boycott, a lot have and the rest have done everything they could to sabotage health care. I think this commercial would be a fair shot against your typical Tea Party Congressman unless he or she made an exception and told people to sign up on the exchanges.

Good chance we'll be the first water district in the country to divest from fossil fuels, starting August 27th

I'm guessing we're first on the planet too, but who knows. I previously wrote a memo suggesting we drop investments in fossil fuel companies (the big push by, and we directed staff to return to us with a proposal. It's now available (to RTFD, click here for the policy and scroll to Attachment 5 to get to the memo and discussion). It's pretty simple - no investments in the top 200 fossil fuel companies, relying primarily but not exclusively on third-party documentation of what constitutes the top 200 companies. Our district doesn't control pension funds, so I'll ask that we also include a letter to the state CalPERS board urging them to take the same step that we're doing.

Along with being the first water district in the solar system to have a climate divestment policy after the August 27 meeting (assuming I'm not counting my chickens too early), I think we might also be the third government agency to do it. Reading through the list of twenty cities, Seattle and Santa Monica are the only cities with a controlling policy in place. A handful of others have passed advisory measures but don't mandate the change, some aren't currently invested in fossil fuel companies but don't have a policy, and the rest are still investigating the idea.

I think there are a fair number of water districts like ours with significant climate awareness and political responsiveness, so I hope this will spread. As for its actual impact on those companies, even if it spreads widely, that's less clear. The pool of money available to be invested in those companies would have to shrink a lot before the companies are forced to pay a premium in dividends or interest rates in order to get investments. I suppose it could happen, but I think the primary effect is cultural, creating an awareness that they are basically little different from tobacco companies and the apartheid-era South African investments.

There is a difference from South Africa in that it wouldn't be good if we halted all fossil fuel use immediately, but somehow I'm not too worried about that outcome.

Hyperloop and autonomous driving versus betting the farm on high speed rail

We'll eventually find out whether Musk's Hyperloop concept will come to something. It's hard to imagine some of the claims, particularly about costs, will be anything other than underestimates. Just building tunnels to get through mountains north of Los Angeles and maybe other areas will rocket up the costs. I've also been following and peripherally-involved with California High Speed Rail for years, and I know that simply putting your structure up on pylons, which has also been proposed for HSR in places, isn't a guaranteed way to avoid land use conflicts.

Still, for the present, I view Hyperloop as similar to autonomous driving in its effect on our proposed HSR - both concepts have an known unknown chance of making HSR become a huge mistake. Autonomous driving might not be able to go 200 mph, but the cars could pod up together on a dedicated or separated highway lane and drive well over 100 mph. That improved drive time across California combined with the ability to use the time productively because you don't have to drive the vehicle could pull a lot of the market share away from HSR. Or not. Maybe they won't be all that fast or take longer to realize than I imagine.

But if you assigned some number to the risks, like a 15% chance that the Hyperloop will kill HSR before it pays off, 25% chance that driverless cars will do the same, and 30% chance that costs will be so much higher or income revenues lower than anticipated so that it doesn't make sense, that all results in a 55% chance that HSR will be a failure just based on those factors alone. Of course I pulled those risk numbers out of the air but they don't seem unreasonable.

I've been cautiously supportive of California HSR although I don't think it's popular in my area. We need to get people out of planes, soon. Almost everything I hear about it just makes me more hesitant though.

Betting a huge amount of money on a single piece of technology, no matter what it is, strikes me as un-hedged.

Unrestrained criticism of Hyperloop is here, YMMV.