"The true nature of the international system under which we were living was not realized until it failed." —Karl Polanyi
A transition to a sustainable economy requires not only population stabilization, breakthroughs in resource productivity and checks on material consumption, but also constraints on aggregate investment. Built into the DNA of finance is the goal of optimizing relatively short-term returns on investment, which, when successful, induces exponential growth in the aggregate stock of financial capital. When that expanding stock of financial capital is then reinvested, it spurs ever-increasing demands for natural resources and pressure on waste sinks. The contradiction between the finite scale of the biosphere and the endless growth of finance capital will be resolved either through crisis or, as advocated here, through foresight and remedial action. Shifting the economic system demands a fundamental transformation of finance, at least for the real investment decisions of the largest actors in the economy. We must view this profound shift as a critical national and global security priority that will require unprecedented intervention by governing institutions on the public's behalf.
The egregious offenses of modern finance need little elaboration. The finance-induced Great Recession—still a depression in parts of the European Union—has been causing oppressive pain and suffering, with multi-generational consequences, including increased wealth inequality, cascading throughout the global economy. If we can peer beyond the human wreckage, we may glimpse a silver lining: the lingering economic crisis has provided even mainstream economists a reason to question as never before the very foundations of our finance-driven economic system. Just as dangerous as rogue banks too big to fail or to govern—and the predatory casino finance that has become their stock-in-trade—is the growth imperative that drives the modern economy beyond the resource and waste sink limits of the biosphere.
Finance's most important practical functions in the real economy are the transformation of savings into investment and the credit creation process of the banking system. The reorientation of the flow of real investment (not to be confused with financial asset speculation) is the bridge to, and the steering mechanism for, a Great Transition to an economy that serves people while respecting the ecosphere's physical limits. For now though, the same planetary boundaries that dictate limits to growth also imply limits to investment, since investment fuels growth. No economic system in the history of civilization has ever had to contemplate such a constraint. How much and where large economic actors like multinational corporations and nation-states invest will significantly determine the quality of the economic system of the future and, given present social and ecological stresses, our collective well-being and global security. As a consequence, real investment choices must become a central concern of global governance, notwithstanding the many failings of governing institutions.
The Impact of Investment
The economy, as measured by Gross National Product (GNP), includes consumption, investment, government spending and net exports, often rendered as a simple equation:
GNP = C + I + G + netX
Concern for sustainability has typically focused on consumption since it represents the largest share of the economy (70 percent in the U.S., less in emerging economies like China and India). However, capital investment has a disproportionately large impact because of the long-term implications it has on future consumption through “technology lock-in" and the embedded feedback loops of business enterprise. For example, if an automobile company constructs a factory to build SUVs, then its advertising and sales efforts will focus on increasing the demand for these SUVs.
Distinguishing between financial investment and real investment is critically important. The former has attracted considerable attention in the investment community: witness the debates about the impact of “SRI" (socially responsible investment) and related “ESG" factors (environmental, social and governance) on corporate behavior and investment performance. Yet financial investors and speculators—groups that increasingly blur together—are typically far removed from the real capital investment decisions of the large public corporations that, to a significant extent, drive and shape the material economy. Even some leading practitioners of ESG and sustainable investment acknowledge that ESG is primarily a risk mitigation strategy for financial investment portfolios, rather than a transformational strategy for the real economy.
The top 1,000 global corporations represent half of the total market value of the world's 60,000 public companies and, undoubtedly, an even greater share of capital investment budgets. What demands our attention, therefore, are the decades-long impacts of the capital expenditure decisions of these largest corporations, together with the impacts of large government capital expenditures like investments in infrastructure. Corporate reporting on social and environmental performance, however, tends to focus on supply chain impacts rather than the initiating impact of the capital expenditures that create these supply chains. To take one of the world's largest corporations as an example, Walmart's continued investment in new superstores matters much more than its subsequent efforts to green its supply chain, notwithstanding the importance of that work.
Shareholder engagement that focuses on capital investment decisions will inevitably confront pushback rooted in concerns about long-term growth, competitiveness, and share price. Corporations make their investment decisions using an internal rate of return framework that compares a project's expected financial return with the firm's cost of capital. Because of the way finance discounts the future, corporations approve capital expenditures that achieve financial return targets with time horizons that rarely exceed ten years and typically ignore “externalities," including those with serious long-term risks. Concerns about the systemic impact on social and natural capital rarely enter the analysis. They are “managed" afterward, if at all. This short-termism is compounded by the even shorter-term horizon of financial investors and speculators preoccupied with quarterly earnings and higher valuations in the stock market.
Policy responses, moreover, rarely occur until after enterprise investment decisions have already been made. A company is free to build a cigarette industry, and only afterwards does society respond with labeling and advertising policies that, at best, partially mitigate the damage. Today, unprecedented ecological risks make this reactive approach unacceptable. Many forward-thinking CEOs and policymakers fully understand this new reality yet feel powerless to change it.
From the Firm to the System
An adequate response to the challenge of a world at risk requires turning from the firm-level investment decisions to the economic system as a whole. Along with genuine contributions to human progress, our economic system has produced staggering growth in financial wealth. Financial assets in the U.S. have doubled as a percentage of GDP since 1980. This should give us pause, rather than reason for celebration.
The drive for exponential returns on financial capital pushed finance to shorter-term and more speculative activity at the same time as physical resource limits to growth began to impose constraints. This has come at an alarming cost. Of the twenty largest countries in the world, constituting nearly three-quarters of global GDP, all but Japan suffered per capita losses in their natural capital stocks between 1990 and 2008. Although natural capital can be eroded for decades, we already appear to have passed safe limits, most notably the atmosphere's limit to absorb carbon waste.
In the “full world" context in which we now find ourselves, quantitative limits to aggregate material growth logically imply limits to investment. Our challenge is now to determine where we invest and what we grow. Energy and material efficiency in the industrialized world and investments in support of healthy lives with dignity for the less developed economies are obvious top priorities. Investments in fossil fuel-hogging luxury yachts and indoor skiing in the Dubai desert are not.
Continuing the pursuit of exponential growth of financial capital by drawing down both social and natural capital is unsustainable. Simple arithmetic demands that it will eventually generate some combination of financial, social, or ecological collapse. With the Great Recession as a wake-up call, we can begin to seek ways to shift the growth trajectory of financial capital from an exponential curve to a more sustainable (sigmoidal) growth curve as found in natural systems.
Thriving individual enterprises—particularly the ones needed to drive the economic transition—can and will continue to grow and deliver exponential returns to investors, at least for a while. However, even accounting for unanticipated efficiency gains in the energy and material intensity of the economy, the aggregate stock of financial capital will need to pass through a critical inflection point to declining rates of growth.8 This transition can occur through some combination of the following developments, many of which are already underway:
- a declining aggregate rate of return on invested capital,
- a systematic financial asset devaluation,
- the debasing of currencies through inflation,
- defaults leading to voluntary or involuntary debt extinguishment,
- an unprecedented scale of private philanthropy to recycle financial capital back into social and natural capital,
- a large-scale voluntary or policy-induced reinvestment of profits by the corporate sector into natural and social capital, and
- an increase in taxation to allow the public sector to recycle financial capital back into natural and social capital on behalf of vital public security interests.
We can choose to lead this transition to reduced growth in the stock of financial capital, while augmenting the stocks of social and natural capital, or risk having it forced upon us by nature's limits, social upheaval, or—most likely—both at the same time.
The Way Forward
The scale and complexity of the required shift in understanding is unparalleled, and time is not on our side. Not only are we in ecological overshoot, drawing down our life-sustaining stock of natural capital and putting social cohesion at risk because of growing inequality and related social stresses, but we are no doubt in “financial overshoot" as well. Financial overshoot exists to the extent that financial assets—both stocks and bonds—are valued by a marketplace that has not yet fully accounted for the multi-decade adjustment process ahead in which honest pricing of externalities and the real resource constraints of planetary boundaries constrain aggregate growth rates. If this transition is left unmanaged, the feedback loops of financial asset valuation adjustments into the real economy could unleash chaos as we now know all too well.
Three interconnected solutions are apparent, all immensely challenging. First, we can work within the current neoliberal economic paradigm to shift the flow of investment by internalizing the costs of the externalities that we currently ignore. Second, business, government, and large pools of private capital can begin leading through enlightened real investment and integrated philanthropy even before a world of accurate accounting using honest pricing is realized. Third, the public can demand a new set of rules and regulations—some local, some regional, some global—to establish the necessary guardrails and mandates for the transition.
Getting prices right: Commercial enterprises must begin to pay the true social and environmental cost of their operations. Establishing sound measurement procedures and mandatory transparency is an essential first step, and many integrated reporting initiatives show promise despite difficulties in enforcement. Critically, however, the presumption that we can put a correct price on many of these costs is naïve and dangerous. Some costs represent harms that can be mitigated, while others represent wrongs that never can. The value of a life in a life insurance policy is certainly not the true value of that life. This same principle applies to the value of healthy ecosystem functioning—not “a life," but “life"—which is literally priceless. Getting prices “right" to the extent possible is a necessary, but insufficient, response.
Enlightened private behavior: Progress is underway as smart companies and communities are investing in resource productivity and alternative energy to save money and accelerate the shift to a regenerative economy. Experimentation with forms of enterprise that better align all stakeholder interests, from partnerships and cooperatives to “for-benefit" corporations (B Corps) and innovative forms of social enterprise, is accelerating. A small group of entrepreneurs and enlightened stewards of capital are leading the way, albeit at a pace too slow and a scale too small. Could a group of large actors including businesses, governments, sovereign wealth funds, pension funds, foundations and endowments, and high net worth families—unshackled from speculative capital markets no longer fit for purpose and using innovative investment methods—work collectively to alter the course and quality of the economy through their aggregate real investment decisions and approaches? Or will the emergent bottom-up, distributed innovation fueled by crowdsourcing scale to such a degree that it impacts the global economic system?
The answer remains unclear. On the one hand, climate stabilization demands that we not burn the vast majority of known fossil fuel reserves already sitting on company balance sheets, yet the energy industry continues to invest hundreds of billions of dollars per year in search of more. On the other hand, real progress is afoot within the most progressive corporations, without which meaningful and peaceful economic transition would be difficult, if not impossible. A growing community of wealthy families, foundations, and sovereign wealth funds are engaging in “impact investing" and philanthropy to harmonize ecological and social impact with financial returns. But the critical large-scale expansion of this integrated approach, particularly the recycling of financial capital back into natural capital, has yet to emerge.
Public policy responses: No realistic assessment of the transition ahead, even by the most steadfast advocates of technology-driven and market-based solutions, can fail to see the primacy of the public sector's role in catalyzing this unprecedented shift. We will need new regulatory frameworks and incentives to help steer an economic transition more profound than the Industrial Revolution. Economically obvious but politically difficult policies like carbon caps and/or taxes must contribute to a portfolio of tools for curbing greenhouse gas emissions along with expanded research and development in clean technology. Action to remove subsidies from fossil fuel-based energy and agriculture and shift them to drive improved resource productivity and accelerated growth of renewable energy and sustainable agriculture is long overdue.
However, a larger and more uncomfortable requirement looms. In the full world of the Anthropocene, our notions of freedom will need to adjust to new realities. Simply encouraging so-called “green investment" will not be enough if we do not curtail investment that has negative and even catastrophic impacts. Deciding the qualitative “what" and the absolute scale of investment must become a matter of the public interest. Logic then points to a fresh and expanded need for governance, even though our confidence in government at the moment is low (or nonexistent) because of valid concerns about competence and corruption. New and effective approaches to global and regional governance, likely using cities as the central nodes of coordinating power, are essential.
In the crises ahead, the impossible will become the inevitable. The belief in the unencumbered freedom of large corporations and other large economic actors to make investment decisions that may have catastrophic and irreversible consequences must now be challenged. Activists fighting deforestation in the Amazon and the construction of the Keystone XL pipeline are showing the way forward. We must begin to accept some form of public interest influence over both the scale and direction of private and public investment capital flows as vital to our national and global security interests.
Opponents will inevitably attack this idea as socialism or worse. But it addresses a profoundly different issue than concerns about the ownership of the means of production. Given the linkage between investment and material throughput of the economy, how we choose to invest will determine to a significant degree whether we follow a path to a Great Transition or continue on the present course to societal destabilization and environmental collapse.
We can look to the public utility sector's (imperfect) permitting process for precedents of regulatory engagement in capital investment decisions at regional scale. Numerous state and multilateral actors, such as the World Bank, already influence the course of investment capital flows globally, although not always in a positive direction. The idea is not new, but the potential scale and scope are, particularly in regard to the need to constrain certain investments like the unrestrained extraction of coal.
Central banks are obvious candidates for radical institutional reform to encompass this new imperative. Central banking in the Anthropocene might well entail qualitative mandates regarding investment and credit flows in addition to conventional inflation and full employment mandates. We must also tackle thorny questions regarding the public and private nature of banking institutions, the credit creation function which the banks now manage under a fractional reserve system, and the alignment of the mission of banks with public purpose rather than private speculation at public expense.
We will achieve our greatest impacts if we can rein in and influence the capital investment decisions of the largest corporations and the G-20 governments, as well as the credit decisions of the fifty largest global banks and financial intermediaries. Supporting public policies can achieve this while allowing more decentralized entrepreneurial energies to flourish at appropriate scale within a new macro framework. If mega-firms in the private sector fail to act in accordance with this overriding public interest, or prove to be ungovernable, we may have no alternative but to nationalize and manage them in the public interest, as Milton Friedman's revered teacher H.C. Simmons well understood in his own context. Although such a suggestion is fraught with huge challenges, we must look head-on at the scale and scope of the transformation we need, particularly in the fossil fuel, agriculture, and banking industries.
Can such unprecedented global oversight, even if limited to the most critical economic actors, be practical without harming the global economy? We have no choice but to try, for business-as-usual will lead to ecological and social collapse—and, of course, the collapse of the economy as well. There will inevitably be short-term efficiency and growth trade-offs in exchange for system resilience. The rich countries will need to find prosperity without growth in material resource throughput—in fact, with an immense increase in material efficiency.17 At the same time, the developing world will need to foster human and ecological well-being through more intelligent technology choices than currently deployed in the North.
The careful, holistic management and monitoring of aggregate real investment flows are an inevitable part of the economy of the future and the challenging transition to it. This will require new global oversight mechanisms, informed by the best scientific understanding of critical ecosystems and empowered by sovereign nation-states and global corporations, to define and enforce a “safe operating space" within which our innovation-driven, free-market system can thrive.18 Like the canvas for a painter, boundaries will provide the discipline that enhances creativity. The extreme degree of financial speculation that defines the financial landscape today has no place in such a future and must be curbed immediately.
Large-scale investment decisions simply must be considered a vital part of the public interest. The sooner we acknowledge the implications of this immense challenge the better.
This article originally ran on Tellus Institute's Great Transition Initiative website.
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After decades on the political periphery, the climate movement is entering the mainstream in 2020, with young leaders at the fore. The Sunrise Movement now includes more than 400 local groups educating and advocating for political action on climate change. Countless students around the world have clearly communicated what's at stake for their futures, notably Swedish activist Greta Thunberg, who just finished her yearlong school strike for climate. Youth activists have been praised for their flexible, big-picture thinking and ability to harness social media to deliver political wins, as Sunrise recently did for U.S. Sen. Ed Markey's primary campaign. They necessarily challenge the status quo.
A Convergence of Issues<p>The unequal impacts of a changing climate have become extremely clear in 2020, so equity has come to the fore of climate conversations in every corner of the country. A global deadly pandemic continues to rage out of control in the U.S., heat waves are setting new temperature records, wildfires are scorching American Western states, and the hurricane season has already made it to the end of the alphabet for naming storms. In all cases, low-income, Black, Latinx, and Indigenous communities are bearing a disproportionate amount of the impacts.</p><p>"Today, the scab is off, the ugly reality of injustice is hitting us up close and personal, made more realistic by this COVID pandemic," Bullard says.</p><p>This year the decidedly youthful focus on intersectionality is a big part of what defines the transformation of the climate movement. Climate is not just an environmental issue, according to youth activists. It's also a racial justice issue, an economic issue, and an access-to-health care issue.</p><p>"Environmental justice is really seeing the intersection of these issues," says Alex Rodriguez, a community organizer with the Connecticut League of Conservation Voters, which aims to make environmental issues a priority for the state's elected leaders. The group is now focusing their efforts on the coming election and recently succeeded in persuading the state to allow absentee voting in November. "We want people to be safe when casting their vote," says Rodriguez, 26, whose fellow grassroots committee members range from age 16 to 60.</p><p>Rodriguez, who also serves on the equity and environmental justice working group for the Governor's Council on Climate Change, says, "We see our programmatic work as a way to help lawmakers see what they can do to improve the dignity of those suffering from environmental racism, systematic racism, and economic oppression."</p><p>Seeing the overlap and bringing these issues together is a strength that Bullard says was missing from the civil rights organizing he was involved with in the 1960s. He says 2020 is unique in many ways.</p><p>"The number of marchers is unprecedented, from different economic, ethnic, and racial groups—an awakening unlike any that I've seen on this Earth in over 70 years," Bullard says. "Today, the different movements are converging, and I think that convergence makes for greater potential for success."</p>
Young and Old<p>But young people are one essential demographic among many when it comes to climate action. With all that's on the line for climate in the coming elections, up and down the ballot, collaboration becomes key. Bullard says previous generations of climate activists can now play the critical role of mentoring, assisting, and supporting. Standing with, not in front of, youth.</p><p>"Youth are leading us and taking on frontline activity," says Jayce Chiblow, the community engagement lead for Indigenous Climate Action, a Canadian organization that works for Indigenous-led climate justice solutions. But in doing so, she says many young Indigenous activists are experiencing the trauma of violence, getting arrested, and being taken away from their land. "All of our older people are supporting those youth: Elders, mentors, people trained in nonviolent action," Chiblow says. "The youth aren't alone."</p><p>That support can go a long way. "There's a lot of anger and a lot of fear, and that's understandable," says Wazer of Sunrise Connecticut. "I definitely feel those things, too, just considering the ways that our future has been threatened and kind of trashed by older generations."</p><p>Under the Trump administration, the number of environmental rollbacks alone can be disheartening, not to mention new <a href="https://www.yesmagazine.org/video/arctic-national-wildlife-refuge/" target="_blank">drilling permits in the Alaska National Wildlife Refuge going up for auction</a>.</p><p>Wazer is frank about the risks of burnout, depression, and anxiety from the stress of it all, but draws inspiration from the example of the late U.S. representative and lifelong civil rights activist John Lewis. "That forgiveness and that ability to keep fighting and stay motivated … I think that that is something really powerful to learn from older generations."</p><p>An intergenerational approach can leverage the individual strengths of youth and older people in all their diversity.</p><p>"The elders hold our stories," says Chiblow, who is Anishinaabe from Garden River First Nation, Ontario. Those stories include lived experiences, culture, history, and generations of adapting to changes in climate. Such collective experience continues to inform Indigenous knowledge and connections to the land, as well as how people manage and govern themselves in relation to it. This knowledge is passed on through relationship-building and storytelling.</p><p>"Every time you hear that story, you're at a different point in your life, and you'll pick up something else … something new," Chiblow says.</p><p>Changes in perspectives that come with time and experience are among the reasons why intergenerational learning and coalitions are critical to the climate movement. To combine that living and learning is to expand the reach and meaning of the message exponentially. As part of her research for her master's degree, Chiblow brought together youth, community leaders, and knowledge keepers in her community to workshop climate action. "Those relationships are vital to keep that movement going," Chiblow says.</p>
The Unique Value Proposition of Elders<p>Older activists bring unique strengths to the table, according to gerontologist Mick Smyer, who designs strategies to move people from anxiety to action on climate. He calls himself "the aging whisperer to climate groups" and "the climate whisperer to aging groups." He is quick to point out that the learning can go in both directions.</p><p>"I think older adults are untapped resources," Smyer says. "Older adults bring several resources, one of which is their circles of influence. Just by virtue of having lived longer, older adults are going to have denser and richer networks," Smyer says. "The second is, when it comes to voting and civic engagement, older adults, as an age group, outperform all other age groups."</p><p>He uses the 2016 presidential election to illustrate his point: "The older age groups, 70% of them voted. Nobody [else] came close." He is cautious about making sweeping statements about older people broadly, but he says that ageism is alive and well. And that can deter the kind of collaboration that would beget necessary progress on climate action.</p><p>As the twin global patterns of an aging population and a changing climate continue arm in arm, Smyer says a good place for starting this work is within one's family.</p><p>"We each have that power to use in our circles of influence, particularly in our families, and we don't realize it," Smyer says. Whether it's via Zoom or FaceTime or a phone call or a chat in the living room, Smyer says, family members have a superpower: They will listen to each other, and they'll at least start the conversation.</p><p> "Intergenerational collaboration around climate issues, particularly in this election season, starts at home, and then goes to the polling booth," he says.</p>
Speaking the Same Language<p>As an individual's network of family, friends, and connections becomes wider and more diverse, the more work will need to be done to have them all working toward the same goals. That is equally true for the climate movement at large.</p><p>In bridging the gaps among baby boomers, Gen Xers, and millennials, Bullard says, "Each generation will have some idiosyncrasy and uniqueness about it that another generation will not understand or comprehend."</p><p>If everybody in a group or institution is similar, then there's no need to explain a lot, Bullard says. There's usually a fair amount of shared knowledge and values. But the more diverse that group gets, in age, race, gender, or culture, he says, the greater the potential for making mistakes, stepping on people's culture, and causing pain. But the potential for learning also increases exponentially.</p><p>Chiblow says successful collaboration comes down to being able to speak in shared concepts. The term "justice," for example, is an English word that's hard to translate into the Anishinaabe language. Chiblow says that because her community sees itself as belonging to the land, and being part of the land, the Anishinaabe worldview, and therefore their understanding of justice, is necessarily more holistic than the mainstream.</p><p>"Indigenous people have been feeling [the effects of climate change] for so long," Chiblow says. Today, as wildfires rage across the West, the mantra of "I can't breathe" is being driven home on a grand scale. For better and worse, climate justice is finally a front-page story.</p><p>"It's affecting the broader society," Chiblow says. "We're finally at the turning point where we could start to make real change because … people are really starting to feel that urgency."</p><p>The urgency will be tantamount in the coming election. A lot is at stake, says Chiblow: "Incentives, funding, all-around agreement, and also the way we're able to manage our lands and ourselves as people."</p><p>Bullard, too, is insistent on urgency. "This election is one of the most important elections of a generation, because there's so many things at stake," he says. "We can't wait another 40 years on climate. We don't have that much time. We don't have 40 years to get justice."</p><p>Issues of climate justice will be on the ballot in state and local elections this fall, such as Nevada's proposed renewable energy standards and Louisiana's proposed disaster funding. And the topic has finally made it onto the national stage. Joe Biden called Trump a "climate arsonist" for not acting on or even admitting that the wildfires in California are clearly climate-related. The frequency and intensity of such disasters is indisputable.</p><p>"Hurricanes don't swerve to avoid red states or blue states. Wildfires don't skip towns that voted a certain way," Biden <a href="https://abcnews.go.com/Politics/biden-address-west-coast-fires-confront-growing-threat/story?id=73000218" target="_blank">said in a speech on Sept. 14</a>. "The impacts of climate change don't pick and choose. That's because it's not a partisan phenomenon."</p><p>In many ways, the results of the upcoming elections will reflect the ways youth activists and older activists are able come to a common understanding of what climate justice means and what they want the future world to look like. </p><p>"There's a lot of knowledge built up in experience, and there's a lot of energy that's stored in young people," Bullard says. "When you put those two together, you have … an excellent recipe for potential success."</p>
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By Simon Montlake
For more than a decade, Susan Jane Brown has been battling to stop a natural gas pipeline and export terminal from being built in the backcountry of Oregon. As an attorney at the nonprofit Western Environmental Law Center, she has repeatedly argued that the project's environmental, social, and health costs are too high.
All that was before this month's deadly wildfires in Oregon shrouded the skies above her home office in Portland. "It puts a fine point on it. These fossil fuel projects are contributing to global climate change," she says.
Moderates Feeling the Heat<p>If elected, Mr. Biden has vowed to stop new drilling for oil and gas on federal land and in federal waters and to rejoin the 2015 Paris climate accord that President Donald Trump gave notice of quitting. He would reinstate Obama-era regulations of greenhouse gas emissions, including methane, the largest component of natural gas.</p><p>The Biden climate platform also states that all federal infrastructure investments and federal permits would need to be assessed for their climate impacts. Analysts say such a test could impede future LNG plants and pipelines, though not those that already have federal approval. </p><p>Climate change activists who pushed for that language say much depends on who would have oversight of federal agencies that regulate the industry. Some are wary of Biden's reliance on advice from Obama-era officials, including former Energy Secretary Ernest Moniz, who is now on the board of Southern Company, a utility, and a former Obama environmental aide, Heather Zichal, who has served on the board of Cheniere Energy, an LNG exporter. </p>
The Push for U.S. Fuel Exports<p>As vice president, Biden was part of an administration that pushed hard for global climate action while also promoting U.S. oil and gas exports to its allies and trading partners. As fracking boomed, Obama ended a 40-year ban on crude oil exports. In Europe, LNG was touted both as an alternative to coal and as strategic competition with Russian pipelines.</p><p>That much, at least, continued with President Trump. Under Energy Secretary Rick Perry, the agency referred to liquified U.S. hydrocarbons as "<a href="https://www.nytimes.com/2019/05/29/us/freedom-gas-energy-department.html" target="_blank">freedom gas</a>."</p><p>Mr. Trump has also championed the interests of coal, oil, and gas while denigrating the findings of government climate scientists. He rejected the Paris accord as unfair to the U.S. and detrimental to its economy, but has offered no alternative path to emissions cuts. </p><p>Still, Trump's foreign policy has not always served the LNG industry: Tariffs on foreign steel drove up pipeline costs, and a trade war with China stayed the hand of Chinese LNG importers wary of reliance on U.S. suppliers. </p><p>Even his regulatory rollbacks could be a double-edged sword. By relaxing curbs last month on methane leaks, the U.S. has ceded ground to European regulators who are drafting emissions standards that LNG producers are watching closely. "That's a precursor of fights that will be fought in all the rest of the developed world," says Mr. Hutchison. </p><p>Indeed, some oil-and-gas exporters had urged the Trump administration not to abandon the tougher rules, since they undercut their claim to offer a cleaner-burning way of producing heat and electricity. "U.S. LNG is not going to be able to compete in a world that's focused on methane emissions and intensity," says Erin Blanton, a senior research scholar at the Center on Global Energy Policy at Columbia University. </p>
Stepping on the Gas<p>In July, the Department of Energy issued an export license to Jordan Cove's developer, Canada's Pembina Pipeline Corp. In a statement, Energy Secretary Dan Brouillette said the project would provide "reliable, affordable, and cleaner-burning natural gas to our allies around the world."</p><p>As a West Coast terminal, Jordan Cove offers a faster route to Asia where its capacity of 7.8 million tons of LNG a year could serve to heat more than 15 million homes. At its peak, its construction would also create 6,000 jobs, the company says, in a stagnant corner of Oregon.</p><p>But the project still lacks multiple local and state permits, and its biggest asset – a Pacific port – has become its biggest handicap, says Ms. Blanton. "They are putting infrastructure in a state where there's no political support for the pipeline or the terminal, unlike in Louisiana or Texas," she says. </p><p>Ms. Brown, the environmental lawyer, says she wants to see Jordan Cove buried, not just mothballed until natural gas prices recover. But she knows that it's only one among many LNG projects and that others will likely get built, even if Biden is elected in November, despite growing evidence of the harm caused by methane emissions. </p>
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