Rethink° January

This recap is fossil, maybe instead of the balloon and the little girl we should have picked a fossil for our banner, because big oil is making headlines. But to counterbalance that...

Moritz J. Mey

and

Max Polwin

Feb 03, 2024

… we will start with some good old degrowth for you. Let’s get it going.

Life in a 'degrowth' economy, and why you might actually enjoy it

📰 Teaser: What does genuine economic progress look like? The orthodox answer is that a bigger economy is always better, but this idea is increasingly strained by the knowledge that, on a finite planet, the economy can’t grow forever.

This week’s Addicted to Growth conference in Sydney is exploring how to move beyond growth economics and towards a “steady-state” economy.

But what is a steady-state economy? Why is it desirable or necessary? And what would it be like to live in?

Continue Reading (→ The Conversation; 6 min)

🤔 Moritz’ two cents: Another article on degrowth. I wanted to highlight it again, as I recently came across a book published in 2023 called “Green Growth”, explaining how green growth would work, so mentally I needed a counterbalance. When it comes to degrowth, I want to pinpoint (as the article does very well) that it is not the horror scenario most people might imagine. Rather than a recession “hitting” it’s deliberately planning one, for the own good, and most of it is well backed by research. For example: people consume less if they work less. Funny right? You’d earn less money, but you also won’t need it because you’d have more time to be happy with less. As the article puts it, “It is about creating an economy based on sufficiency, knowing how much is enough to live well, and discovering that enough is plenty”.

Can scientists save your morning cup of coffee?

📰 Teaser: The threat posed by rising temperatures and shifting rainfall patterns to the global coffee supply is significant, with Brazil, the largest producer, facing a potential unsuitability of between 35% and 75% of its coffee-growing land by the end of this century. Furthermore, between 43% and 58% of the world's coffee-growing land could be rendered unsuitable by the year 2050. The fussy nature of the Coffea arabica plant, which accounts for 70% of the world's production, makes it especially vulnerable to these changes. Scientists are investigating how to solve the problem, such as by moving coffee plantations to higher places, using agroforestry techniques, and making new coffee plant varieties that can grow in a warmer world.

Continue reading (→ Economist; 12 min)

🤔 Max’ two cents: Coffee is one of the most important cash crops in terms of supported livelihoods (around 120 million people depend on it for income). The challenges it faces due to advancing climate change are symbolic of climate-related challenges to our globalized agricultural system. Around 80% of the world’s coffee is produced by smallholder farmers, which complicates timely adaptation. Agricultural finance is challenging for smallholder farmers, in particular in a low margin business such as coffee, where the farmers typically receive between 7-10% of the retail price. Thus, going beyond fair trade coffee and aiming to consume direct-trade coffee from ideally B-Corp certified roasters is import, as they commonly support farmers to adopt future-proof farming practices, and sometimes to experiment with new potentially climate-resilient varieties. My personal favorite in Germany is Coffee Circle. Given the cultural value of coffee globally, it could be an effective medium for climate communication?!

Big five oil companies to reward shareholders with record payouts

📰 Teaser: BP, Shell, Chevron, ExxonMobil and TotalEnergies to distribute more than $100bn despite public outrage

The world’s five largest listed oil companies are expected to reward their investors with record payouts of more than $100bn (£79bn) for 2023 against a backdrop of growing public outrage at fossil fuel profits.

The five “super-majors” – BP, Shell, Chevron, ExxonMobil and TotalEnergies – showered shareholders with dividend payments and share buybacks worth $104bn in the 2022 calendar year, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

Continue Reading (→ Guardian; 6 min)

🤔 Moritz’ two cents: Mhhh how does that sound? We’ve all been paying more for energy, we have had a fossil fuel sponsored COP last year, and now we see our favorite climate laggards paying themselves large dividends. Interestingly, they did not all have rising profits, but they also pay out more money than they do invest in new technologies. 6x times as much as in the case for Shell. The crazy thing, while it sounds like the shareholders are milking the cow as long as it goes, the article suggests that this profit taking might actually be an indication that the industry is optimistic about future profitability. Optimistic about continuing to generate (lots of) money from fossil fuels, as they do not invest much into renewables. After the confidence big oil rigged COP, this it does not seem like a great start to 2024 in terms of keeping our living conditions on earth in check.

Could a Giant Parasol in Outer Space Help Solve the Climate Crisis?

📰 Teaser: The plan is to fabricate a massive sunshade and deliver it to a faraway location between the Earth and the sun, thereby reducing the impact of a tiny but crucial amount of solar radiation, sufficient to combat global warming. If just shy of 2 percent of the sun's radiation were to be blocked, it would be enough to cool the planet by 1.5 degrees Celsius and keep Earth within manageable climate boundaries.

Continue Reading (→ The New York Times; 5 min)

🤔 Max’ two cents: Treating global warming just like a scaled-up version of a hot day in the sun, when we are looking for a parasol, has its appeal. Radiation from the sun is too intense for our liking, or for the health of our planet. Ergo, let’s block some radiation and the temperature will drop and reach comfortable limits. Building a sufficiently large parasol (the size of Argentina!) in space, would cost trillions of Euros. We might just invest this money in proven technology that reduces further GHG emissions and also addresses pressing, non-carbon environmental challenges, such as ocean acidification, biodiversity loss and plastic pollution.

Radical interventions are necessary to drive down emissions and to stabilize the planetary boundaries, but a too narrow and disassociated approach will not deliver adequate solutions.

For now, simple actions such as reducing consumption of material in the rich world (start with beef, electronics, and clothing) is a quick win. Fancy technical “solutions” are worth investigating, but one should also take in mind the possible negative side effects, and most effective alternative use of required capital. Negative carbon technologies are sexy, but changing farming practices might provide more bang for the bug (drawing down carbon, providing healthy food, and increasing biodiversity).

Exxon Sues ESG Investors to Stop Climate Proposals on Ballot

📰 Teaser: ExxonMobil Corp. filed a lawsuit against US and Dutch climate activist investors to remove what it describes as their “extreme agenda” from the ballot at its annual shareholder meetings. Teaser (→ Bloomberg; Paywall)

🤔 Moritz’ two cents: This is a fun one. Basically, the directors (employees of the shareholders) sue a part of the owners. They sue them because they think that the plan of the owners to take the company towards a more sustainable pathway is “too extreme”. That is a company that belongs to the same bunch that is still positive about earning more money with fossils in the future. Welcome to shareholder capitalism 101. “. As such, the goal of the firm is to increase its profits and maximize returns to shareholders.” or how did the Friedman doctrine go?

But what if some shareholders would rather not approach this “stop at nothing” philosophy but balance societal wellbeing with the behavior of the firm? Dear Exxon, isn’t it time to abandon Friedman capitalism and realize that we humans need some values now? Some, that you can’t express with a price of a share.

📚 Rethink° Book Club

Please share with us what you are reading.

Moritz: I just finished “Klara and the Sun” by Kazuo Ishiguro a Nobel Prize laureate for Literature: “What stays with you in ‘Klara and the Sun’ is the haunting narrative voice—a genuinely innocent, egoless perspective on the strange behavior of humans obsessed and wounded by power, status, and fear.” says the Booker Prize committee. I have to admit, it did not quite catch me. It is an interesting perspective, but I felt a bit like reading one of those books we had to read back in school. The perspective is intriguing, I agree, though in my view the story does not really catch up to speed.

Max: I am reading “Baustellen der Nation” by Philip Banse and Ulf Buermeyer, the hosts of my favorite German politics podcast “Die Lage der Nation”. In ten chapters, the book analysis the main challenges facing Germany on an economic and political level. The analysis is concise and yet in-depth, such as when assessing why the German train system has been underinvested for decades and what can be done about it. In particular, the chapter on the sluggish digitization of government services was instructive for me, as it depicted very well the myriad challenges due to the jungle of monolithic software solutions that each municipality, region, province, or ministry has implemented. Instead of dwelling too much on the doom and gloom, the authors then describe how other countries in Europe, such as Denmark, managed to digitize government services successfully. This book strikes the right balance between providing an honest analysis of the current state of affairs, while also laying out what action should be taken to improve on it.

Send us your recommendations, and we’ll list the highlights: me@mjmey.com

Not yet enough? Here are some evergreens and recent content we came across:

🎧 Outrage and Optimism on climate policy and action by the chair of the Paris Climate Agreement Christiana Figueres, Tom Rivett-Carnac and Paul Dickinson.

🗞️ The ESG on a Sunday newsletter is for everyone who wants to keep up with developments in sustainable finance.

🎥 Water Bear is a non-profit movie platform focused on advancing activism, as a Netflix for impact.

📅 Rethinking is timeless. Read our December issue.

The context of this quote is a recent speech in the German Bundestag by the Journalist Marcel Reif. His father, Leon, was a Holocaust-Survivor and had his wishes boiled down into three simple, but powerful words.