Pope Francis is set to weigh in on the climate change debate in what has already caused a considerable buzz in the media, by equal measure prompting cheers from the green lobby and irritation among climate skeptics, even before the message has been released.
But does the Pope’s message on climate matter? The instinctive answer is no: industry pays attention to prices, market trends and legislative frameworks, not religious leaders. But is that view missing something? One argument is that there’s a bigger picture here that warrants consideration.
As early as the second half of June, the Pope is expected to issue an Encyclical letter, a rare and high-level statement of fundamental principles, stating that protecting the environment is an urgent moral imperative for humankind.
The letter will reportedly be sent to the world’s 5,000 Catholic bishops and 400,000 priests, reaching a potential 1.2 billion Catholics as well as a wider audience from other faiths and secular society.
The timing of the Pope’s message is significant. The upcoming Encyclical comes ahead of global climate talks under the United Nations in November and December this year, and is seen as a direct attempt to influence the outcome of the talks.
Recent comments by some of the Pope’s top advisors provide an insight into the Pontiff’s upcoming guidance.
“The ideology surrounding environmental issues is too tied to a capitalism that doesn’t want to stop ruining the environment because they don’t want to give up their profits,” said Cardinal Oscar Rodriguez Maradiaga, the coordinator of a group of nine cardinals that serve as the Pope’s informal cabinet, speaking at a press conference in Rome.
This was always going to be controversial: climate change and the world’s response to it are already delicate topics, given the scale of vested interests in fossil fuel energy sources versus cleaner alternatives. So it’s hardly surprising that a heavyweight moral and religious leader entering the debate would ruffle some feathers.
From the climate skeptic’s perspective, the Pope is treading outside his remit: climate change is a political issue, not a religious or moral one, and religious leaders should stay out of the debate.
Supporters of climate action say this is nonsense: climate change is, at its core, a question of chemistry and physics, making it demonstrably non-political.
The global issue
The issue only becomes political at the level of global response to the problem. Many argue that the people who are most responsible for causing a build-up of greenhouse gases in the atmosphere are also reaping the largest material rewards for doing so, while those least responsible will suffer its worst effects, making the issue a moral and ethical one.
Does any of this matter for the energy markets? Whatever one’s views on religion and climate science, the Pope’s views matter because more than 1 billion Catholics represent a significant collective force that could change the game on global climate action.
The Pope is not widely recognized as an expert on science, climate or energy policy. His legislative powers are confined to the Vatican City State. But that’s beside the point. The Pope wields tremendous influence as a moral and ethical leader and his views matter in terms of public opinion. And in democratic countries, it is public opinion that elects governments and provides them with a mandate to legislate.
According to a declaration entitled “Climate Change and the Common Good,” released jointly in April by the Pontifical Academy of Sciences and the Pontifical Academy of Social Sciences, the Vatican’s scientific advisors gave a strong indication of what to expect from the upcoming Encyclical.
“Unsustainable consumption coupled with a record human population and the uses of inappropriate technologies are causally linked with the destruction of the world’s sustainability and resistance,” the advisors said.
“Widening inequalities of wealth and income, the world-wide disruption of the physical climate system and the loss of millions of species that sustain life are the grossest manifestations of unsustainability. The continued extraction of coal, oil and gas following the ‘business-as-usual mode’ will soon create grave existential risks for the poorest three billion, and for generations yet unborn,” the advisors warned.
At first pass, it would be tempting to think that climate sceptics would casually dismiss the Pope’s entry into the fray, saying religion should back off from politics. The reality is the exact opposite.
Free market think-tank responds
Chicago-based free-market think-thank, The Heartland Institute, clearly sensed a threat from the Pope’s upcoming instruction on climate change, and sent a team to the Vatican in April to counter what it regards as bad scientific advice given to the Pope by climate scientists.
The Pontifical Academy of Sciences on April 28 hosted a workshop titled “Protect the Earth, Dignify Humanity” to “raise awareness and build a consensus” among people of faith that human activity is causing global warming.
“The Heartland Institute ” the world’s leading think tank promoting scientific scepticism about man-caused global warming ” is bringing real scientists to Rome… to dissuade Pope Francis from lending his moral authority to the politicized and unscientific climate agenda of the United Nations,” the Heartland Institute said.
That a US free-market think-tank would send officials to Rome is not only a clear reminder that the stakes are high on the climate debate this year, but also an indication that they understand the significance of the Pope’s ability to influence.
The Heartland Institute’s basic position is that global efforts to limit greenhouse gas (GHG) emissions from burning fossil fuels will increase electricity prices, harming the prospects of the world’s poor to climb out of poverty. The institute appears to stay quiet on what could happen to the world’s poor if global warming is left unchecked, presumably because they do not believe climate change is a crisis.
That’s to say nothing of how renewable energy projects are delivering off-grid power and helping to alleviate poverty for the poorest people in rural villages in India, Africa, Asia and Latin America.
Green groups have for years lamented the near-glacial speed of United Nations climate change talks and a lack of any meaningful global deal to curb human-induced climate change, even after decades of negotiations.
And all this amid scientists’ warnings of sea level rise, drought, increases in extreme weather events, potential global food and water shortages, and possible destabilizing impacts on countries with already fragile governance structures.
Time to take out insurance?
The science of global warming is never going to be completely settled, even with more evidence adding to the existing pile, because of the complexity of the atmosphere and its ever changing dynamics. That’s the nature of peer-reviewed science. It continually evolves, improves and takes into account new evidence.
But then most home owners choose to take out contents insurance without needing to know if or when their property will be burgled. The risk that their home might be burgled is sufficient to make paying for the policy worthwhile; it makes sense to pay a small cost to avoid a much larger one.
So why do we need complete certainty on the risks of climate change before taking out a global insurance policy against it?
The answer to this is multi-faceted: because dealing with this threat is inconvenient. Because to halt the rise of atmospheric GHGs to safe levels within a single lifetime will require a seismic shift in how the world’s economy works, up-ending existing business models, disrupting resource-driven power structures, and requiring massive investment in new technologies on a scale never before seen.
Limiting global emissions is difficult because climate change is a long-term issue and politicians are accustomed to thinking on 4-5 year time horizons.
And so far, we simply lack the kind of global governance structures that are needed to address long-term existential threats at the timescale demanded by the science.
For free-market conservatives who are doubtful of the climate science and who believe in small government with limited influence, climate change is anathema. Why? Because if the problem of climate change is real and the private sector collectively fails to deal with it, this will create the conditions in which government is likely to get bigger, more powerful and more intrusive.
That’s why the issue is so divisive. In the short-term, it’s easier to deny that the problem exists than accept the science and start dealing with the threat. One side of the political spectrum wants to deny the science, while the other side wants to initiate a managed transition to diversify the world’s energy sources before the situation demands more radical and disruptive change.
And at the sharp end, there will be winners and losers resulting from worldwide climate action. Some of today’s thriving industries could become tomorrow’s Rust Belt. Money will flow from where it has accumulated in the past to new sectors, at a magnitude and on time-scales that are hard to predict.
History is littered with companies and entire sectors that either didn’t understand the nature of disruptive change or failed to act upon it in time. Photographic film and camera-maker Kodak was sidelined by the digital photography revolution. Blockbuster Video was broadsided by the switch to movies delivered by post and web-based video on demand.
Equivalent changes are taking place in the energy markets. We’ve already seen what the US shale-gas revolution has done to the economics of US coal production, coupled with global regulatory efforts to limit CO2 emissions.
In fairness, this issue cuts both ways. History is also littered with renewable energy companies that failed to live up to expectations, for example US solar company Solyndra which went bankrupt, and more recently Hong Kong-listed Hanergy Thin Film Power Group Ltd, whose shares took a pasting on May 20.
But given the direction of travel, it’s hard to shake off the view that the world’s most polluting industries face a period of further transformative change. When disruptive change happens, the choice is adapt or lose market share.
As recently noted by Platts Energy Economist managing editor Ross McCracken, the global coal industry is in crisis because it has failed to recognize the structural shift in power generation driven by regulation rather than price. It has missed the window of opportunity to invest in clean coal technologies, and now faces a slow decline.
The cost of renewable energy is falling and the global shift to clean energy is already under way. Reducing global emissions carries a cost, but it’s a cost that must be balanced against a careful consideration of the cost of inaction, according to the UN.
There is no getting around it. Cutting global emissions at scale is a tough call. But the alternative is to take a punt on the scientists being wrong, and to hope for the best, with all the risks that this entails.
Taking the latter approach is a position that is now considered unacceptable to a growing group of countries, including major players such as the European Union, the United States of America and China.
Adapting to rising sea levels and extreme weather events is, in all probability, within the capabilities of rich countries, even if poorer countries suffer much worse effects. But adapting to a world where most food-growing regions are compromised might be something that all countries struggle with.
The big question
The question is whether sustained climate impacts overwhelm countries’ adaptive capabilities, and whether an economy can cope with paying for sustained multiple climate disasters at the same time as dealing with high food prices, civil unrest and a growing burden of climate-related migration.
It is impossible to be certain on the extent of these impacts, or where and when they might occur, or their frequency and severity. But governments agree that the risks are real and businesses have always had to cope with risk.
Cutting greenhouse gas emissions in an orderly, managed way is the kind of global insurance policy that the UN global climate negotiations seek to put in place.
Depending on one’s viewpoint, the uncomfortable truth is this: the world is not going to shift away from fossil fuels in a decade or two. That means there are essentially two choices: continue with the status quo and face the effects of climate change, whatever they may be, or find cleaner ways to use the fossil fuel resources we do have while the transition to clean energy is underway.
That, in all probability, will mean some coal and gas-fired power generation being displaced by nuclear, wind, solar, hydro-electric, biomass, geothermal, wave and tidal power, as well as new technologies that have yet to emerge, with each country’s energy mix dictated by its domestic natural resources, public opinion and lawmakers’ willingness to subsidize one technology over another.
Carbon capture and storage may have a role to play in that transition, but frankly the economics don’t look great. The private sector doesn’t want to pay for CCS on its own, and broadly speaking, the public feels the same way. That’s not to write off CCS entirely, but the challenges go way beyond technology and legal issues.
The debate about climate science and the ethics and morals of global warming is unlikely to go away any time soon. Climate scientists have been warning governments for years about the threat of climate change. Part of the reason that they have failed to adequately respond is voter apathy.
The general public has been fed mixed messages about climate change to the extent that many don’t know who to believe. Of course, public perception of the climate issue varies from one country to another. In general, the public confusion over the science has led to apathy, and broadly speaking, public opinion has not been out in force behind the climate action lobby, at least not at a level that most governments feel they need to respond to.
As ever, the devil is in the detail. If the Pope were to issue a vague message that humanity has a sacred duty to protect and nurture the natural world, this is unlikely to irk the right-leaning climate skeptic section of the political spectrum.
But if, as appears to be the case, he spells out a clear instruction for humanity to shift away from fossil fuels in the shortest possible timeframe, this would be a different matter, because the message would represent a move beyond theology and ethics into the territory of global politics and policy.
Unfortunately in the polarized debate on climate change, common sense is often the first casualty. If the Pope spells out a message to the world’s Catholics that capitalism itself is the problem, this will play into the hands of sceptics who will accuse the Pontiff of advocating a kind of socialism bordering on Communism.
But this is a false debate. The choice is not between fossil fuel-powered capitalism on the one hand and job-killing, innovation-stifling big-government socialism on the other. To frame the debate in this way is to ignore reality.
For a growing number of industrialized countries and economies in transition, the debate is about how best to harness free market principles to bend humanity’s trajectory away from a grim future of resource over-depletion and climate disruption in favor of a more balanced future of jobs, innovation and growth based on a healthy mix of energy sources that do not threaten human welfare.
Fossil fuels have a role to play in that future, but cleaner alternatives are already moving into the mainstream. The falling cost of renewable energy technologies means they will not forever be dependent on government subsidy. Furthermore, efforts to put a price tag on industry’s CO2 emissions are raising the prospect of a thriving and competitive low-carbon economy.
Serving to underline the point, German Chancellor Angela Merkel and French President Francois Hollande on May 19 committed to strive for a total decarbonization of the global economy this century. For that to be more than a dream without a plan, legislative frameworks will be needed, and not just in Europe.
In any case, it’s not the Pope’s view that matters so much as the underlying issue that he wants to draw attention to.
If the majority of scientists are right, the underlying physics and chemistry of the atmosphere will eventually force the issue, irrespective of the political debate. Companies and investors who agree with that analysis are already positioning themselves for a global transition to clean energy.
Those that don’t agree are banking on the scientists being wrong, or assuming that governments will ignore their warnings.
One interpretation of the Pope’s upcoming climate message is that it doesn’t matter: a billion Catholics don’t have to agree with the Pope just because he’s their spiritual figurehead.
Another interpretation of the Pontiff’s upcoming environmental guidance is this: a billion or more people is a number large enough to make politicians sit up and take notice.
Even if only half that number start doing things differently, that, at the very least, makes the Pope’s message worth paying attention to, even for people who think religious leaders should stay out of climate and energy debate.
Take your pick according to your particular persuasion. One thing’s for sure: an increasing number of governments have already accepted the climate science and are putting actions in place to reduce greenhouse gas emissions while safeguarding jobs, growth and prosperity. If religious leaders join in that effort, it will simply add more momentum.