By William S. Becker
A long time ago on the Greek island of Crete (or so the story goes), a young man named Icarus attempted to escape imprisonment by flying away on wings made of feathers and wax. His father warned him not to fly too close to the sun, but Icarus ignored him. The sun melted the wax. Icarus fell into the sea and drowned.
It seems as though this story is being played out by Donald Trump. Except, and stay with me here, he is being buoyed by bubbles instead of wings; the heat that threatens to pop them also comes from the sun, but via global warming.
Trump said this about the U.S. economy when he announced in June that he is running for reelection: “Our economy is the envy of the world, perhaps the greatest economy we have had in the history of our country…Our country is now thriving, prospering and booming and, frankly, it’s soaring to incredible new heights.” There are several reasons to question whether it will stay there much longer.
A “bubble” develops when public policy is based on implausible views about the future. For example, the real estate bubble was based on the implausible view that the housing boom would continue indefinitely. In the present case, the implausibility is that the economy can keep soaring when the President of the United States ignores serious threats including the world’s biggest, global climate change. Trump’s performance and the economy’s are riding on at least four bubbles: the carbon bubble, the investment bubble, the disaster bubble, and the national security bubble. If he keeps ignoring global warming, all four will pop. Here they are.
The carbon bubble is caused by the ongoing use of fossil fuels, the emissions from which are the principal cause of the warming planet. Trump doesn’t care. Insofar as he has an energy policy, it’s to help oil, gas and coal companies keep producing and exporting those fuels. Trump sweeps aside any threat to this flawed policy, including the Paris climate accord, environmental regulations, credible science and past presidents’ policies to cut carbon pollution.
With a Congress that is too timid to tell him that the carbon bubble will pop, Trump has become the titular leader of global business as usual. The United States produced 12.2 million barrels of oil in April, the first time ever that production here has exceeded 12 million. The world’s 10 biggest oil companies, led by ExxonMobil and Shell, are projected to spend $167 billion on new oil and gas fields between 2020 and 2029. Despite the Paris accord, 33 global banks have invested nearly $2 trillion in fossil fuels over the last four years. The International Monetary Fund calculates that worldwide government subsidies for fossil fuels totaled a staggering $5.2 trillion in 2017. They amounted to nearly $650 billion in the United States four years ago, second only to China.
The implausible view here is that the United States and the rest of the world can keep this up. The immediate problem is not oil and gas reserves. It’s that the atmosphere has a limited capacity to hold carbon pollution without profound adverse consequences for life on the planet. That capacity is called the carbon budget. Scientists have calculated that to stay within the carbon budget, about 80% of the world’s proved reserves of fossil fuels must remain unburned.
If powerplants and vehicles don’t burst the bubble, melting permafrost will. Permafrost is the frozen soil that covers 24% of exposed land in the Northern Hemisphere. It contains organic matter from plants and animals going back to the Ice Age. As global warming thaws it, the organic matter decomposes and releases potent greenhouse gases. Climate change already has begun with 850 gigatons of carbon in the atmosphere; permafrost holds 1.6 times that amount.
The melting process has begun. The result is a “positive feedback loop” in which the released greenhouse gases further warm the Earth’s surface, resulting in more thawing, which releases more greenhouse gases, and so on. Trump’s bubble – and the world’s – will burst when enough greenhouse pollution is put into the atmosphere to make climate change catastrophic and unstoppable.
Meantime, the carbon bubble is creating a disaster bubble and its consequences for the economy.
The disaster bubble: The investment management company Morgan Stanley reports that weather disasters intensified by climate change cost North America $415 billion over the last three years, two-thirds of all the damages suffered worldwide. Climate scientists in the U.S. government warn that if we do not mitigate climate change, annual losses in some sectors will grow to hundreds of billions of dollars within a few generations.
In a typical year today, taxpayers pay nearly 10 times more for federal disaster relief than three decades ago. The disaster bubble is expanding because of more extreme weather events combined with the movement of people and infrastructure into disaster-prone areas like coastlines and, especially foolishly, floodplains.
At least 9,000 Americans have died from heat-related illnesses since 1979. The National Climate Assessment issued by government scientists last fall warned that in the worst case, extreme heat will make outdoor work dangerous by 2090, costing the economy $155 billion annually. Coastal property damage from sea-level rise and stronger storm surges could cost $28 billion yearly.
The Pew Charitable Trusts reported last year that states, too, are paying substantially to prepare for and recover from climate-related disasters, although “the overwhelming majority of states don’t have a complete picture of how much money they are spending”.
The implausible assumption here is that the United States can keep absorbing these costs. Federal officials are considering ways to push more disaster response and recovery costs onto states. But as far as families are concerned, it makes no difference which level of government is paying; the cost trickles down to property owners and taxpayers.
The disaster bubble will burst when the cost burden becomes intolerable and disasters keep raising the national debt and consuming funds necessary for other critical programs, or when the cost of private insurance becomes unaffordable for families and businesses. We are closer than many of us think.
The investment bubble: With climate change already inflicting costs and damages, one would think that public and private investments in the energy system would be focused on building a grid that can seamlessly handle solar and wind, and creating an infrastructure for electric vehicles, building community-scale solar grids, and extending powerlines to rural wind farms. Instead, the world is in the midst of an oil and gas infrastructure boom. The oil and gas industry and its investors have tripled their spending on infrastructure since 1996, half of it in North America. One result is a pipeline bubble, according to Global Energy Monitor (GEM), a nonprofit group that monitors these things. GEM cautions that “North America is betting over $1 trillion on a risky fossil infrastructure boom.”
There are incredible risks in these investments. There are several ways they will turn bad. At some point, climate change will become so destructive that policymakers will be forced by public costs or public opinion to curtail fossil energy production. Trillions of dollars in infrastructure and underground reserves of oil and gas could be stranded. Second, the fossil fuel market might deflate because of competition from cheaper and cleaner renewable resources, combined with carbon taxes and the repeal of public subsidies for oil, gas and coal. As GRM notes, “Just as the fracking revolution enabled natural gas to push coal out of North American power markets, today plunging solar and wind cost structures threaten to similarly drive the displacement of natural gas.”
This appears to be happening now. Bloomberg says the value of the 170 companies in the Russell 3000 Energy Index, most of them in oil and gas, went down 12% during Trump’s first two years in office. ExxonMobil and Kinder Morgan Inc., the pipeline and energy storage companies, each declined 1% while Peabody Energy Company, the largest private coal company in the world, declined 4%. Meantime, 89 major publicly traded U.S. companies with at least 10% of their business in clean energy technologies experienced gains of 50%.
The national security bubble. Climate change is increasing the worldwide risk of humanitarian crises and conflict. At the same time, it is interfering with military preparedness. A nine-month investigation by NBC News and Inside Climate News found that 17 soldiers have died from heat exposure in the last 10 years. In 2008, 1,766 cases of heat stroke or heat exhaustion were diagnosed among active-duty service members; by 2018, the number climbed by nearly 60%, with 2,792, heat-related deaths in the military over the decade. The military reported earlier this year that nearly 80 military bases already are subject to significant risks of flooding from sea-level rise and drought attributed to climate change.
Another risk involves the global oil market. We have known for many years that the security of oil supplies depends on a narrow, easily-sabotaged waterway in the Persian Gulf. The Strait of Hormuz provides the only access between the Persian Gulf and the open sea, making it a vital “chokepoint for a third of the world’s liquified natural gas and 20% of its petroleum.
It is bordered by Iran and the United Arab Emirates and it includes some of Iran’s territorial waters. It is protected in part by the U.S. military.
Now, the vulnerability of that shipping lane – the Strait of Hormuz – is being exploited by Iran, which has begun sinking or confiscating oil tankers owned by other countries. That threatens conflict between Iran and the U.S. Economically, it would make little difference if the United States became self-sufficient in oil and gas. In a global economy such as we have today, any nation’s oil crisis can shock the world economy.
Military and intelligence experts have warned for years that climate change intensifies existing conflicts between and stresses on nations. “Climate hazards such as extreme weather, higher temperatures, droughts, floods, wildfires, storms, sea-level rise, soil degradation, and acidifying oceans are intensifying, threatening infrastructure, health, and water and food security,” the intelligence community’s Worldwide Threat Assessment cautioned in January. The Institute for Economics and Peace predicts that climate conflicts will threaten world peace within a decade.
Nevertheless, “the White House seems to be ignoring – even potentially challenging – research and expert opinions on the connection between climate change and national security,” according to Scientific American. Worse, Trump and his Administration are cutting the government’s science expertise and even banning the words “climate change” from government websites and documents. Two years ago, Trump left any mention of climate change out of the National Security Strategy that the White House is required to issue from time to time.
Earlier this month, the U.S. Army War College noted ominously, “The Department of Defense is precariously underprepared for the national security implications of climate change-induced global security challenges.”
Then there’s the “flood” of refugees hoping to enter the United States across our southern border. Climate refugees from drought-stricken areas of Central America are among them. Millions more are expected in the years just ahead. As the Texas Observer noted last December, “A flood of climate refugees is coming, and the choices are stark: Develop a generous asylum policy and mitigate the impacts of climate change with investment abroad. Or build walls high enough to stem the tide.”
In the National Security Strategy issued during Trump’s first year in office, the White House wrote, “Our fundamental responsibility is to protect the American people, the homeland and the American way of life.” But the American way of life is in great jeopardy from these and other “implausible views about the future”.
Without exaggeration, we can conclude that the greatest threat to the American way of life is not Russia, China, Iran or some other foreign power. The greatest threat is President Trump, his Administration and the many members of Congress who lack the guts to stand against him. Trump will brag about the health of the economy during this election cycle. When he does, we should remember that our security and the quality of our lives is held aloft not by a solid foundation of leadership and public policy, but rather by several fragile bubbles that are in imminent danger of breaking.
It seems implausible that one man has so much power and hubris that he could permanently change life on the planet, but that is the case. In 2020, we would do well to elect a man or woman whom we can trust to handle the power well.
Next: By denying the conclusions of climate science, President Trump is contradicting the entire federal government.