The Cost Of Climate Change : Planet Money Climate activists have long used political and social pressures to decrease the use of fossil fuels and preserve forests... but now many are following the money to try and affect change.
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The Cost Of Climate Change

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The Cost Of Climate Change

The Cost Of Climate Change

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UNIDENTIFIED PERSON: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

STACEY VANEK SMITH, HOST:

So you know Bloomberg Terminals, Cardiff.

CARDIFF GARCIA, HOST:

Yeah, I know Bloomberg Terminals. I used to have access to one...

VANEK SMITH: Wow, really?

GARCIA: ...Back in the old banking days. And I'd love to have access to them again, but I have a feeling NPR is not going to spring...

VANEK SMITH: (Laughter) Yeah.

GARCIA: ...For the $20,000 that they cost.

VANEK SMITH: Let's try and get computers that weren't manufactured in 1987 first. But, yes, they loom very large in the world of finance. They're kind of like a computer that is connected to a special financial Internet, right? Is that fair?

GARCIA: Yeah, I think that's a fair way to characterize it. They give you a way to get financial information in real time and then sort of manipulate that information so that you can play with it, make charts and graphs and all kinds of other things, yeah.

VANEK SMITH: Yeah. This is things like, you know, stock prices going up and down and, like, wheat crop prices and, like, all kinds of things that people use to make trade.

GARCIA: Yeah, my mouth is watering right now.

VANEK SMITH: And this, like, speedy knowledge is very expensive. A Bloomberg Terminal costs upwards of $20,000 a year per person, which is nuts.

GARCIA: I would characterize that as a sound investment for the NPR New York Bureau, but fine.

VANEK SMITH: We will talk about what on Earth you would use this thing for in a minute. But, you know, I mean, the people who use them generally are bankers and traders, so this information is very meaningful to them. It's very valuable. But that is also why it was so weird when the Rainforest Action Network bought a Bloomberg Terminal.

BILL MCKIBBEN: They decided that they would pony up the money for one of these Bloomberg boxes.

VANEK SMITH: And that's expensive, right? I mean, these are not cheap.

MCKIBBEN: It is expensive. I mean, look; every brokerage house in the world has one, but they became the first NGO, I think, with one.

GARCIA: Bill McKibben is a climate activist and author. And he says the Rainforest Action Network bought a Bloomberg Terminal so that when any company made a deal that would in some way affect the rainforest, the Rainforest Action Network would know immediately and could then follow the money.

MCKIBBEN: Whenever a deal, a loan, whatever gets made, everybody goes on - the word goes out on the Bloomberg box, and it's a big celebration. But they were kind of running the numbers backwards. The league table they were publishing each year showed who was doing the most damage.

VANEK SMITH: This worked. The Rainforest Action Network picked out projects it saw as the most destructive for the Amazon rainforest. It saw where the companies doing those projects were getting the money to do those projects, and a lot of it was coming from loans given by Citigroup. So the Rainforest Action Network ran a campaign showing celebrities cutting up their Citi cards. And eventually, Citigroup came around. It set up an organization with other banks that would limit lending to projects that would damage the rainforest.

This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.

GARCIA: And I'm Cardiff Garcia. Today on the show, the environment and the economy. Deforestation, climate change - these are big political fights right now, but these issues are also about economics because big storms, rising sea levels, dying crops - these all cost money, and so does drilling for oil, digging for coal, cutting down rainforests. So increasingly, activists are doing what the Rainforest Action Network did. They are following the money.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

VANEK SMITH: Bill McKibben is the founder of 350.org, a climate activist group. It's focused on decreasing the global use of fossil fuels. And Bill says his group really liked the economic approach that the Rainforest Action Network had taken. So their group started following the money, too, looking at which big investment funds, like pension funds and endowments, were investing in fossil fuels, like coal and oil companies.

MCKIBBEN: We did a roadshow around the country. We did...

VANEK SMITH: Oh, like you do if you're, like, planning on taking a company public.

MCKIBBEN: Yeah, we did. But these were very public. We did - I think we did 28 shows in 30 nights all across America.

GARCIA: These shows were like rallies where they highlighted how much local investment funds, like university endowments and pension funds, were investing in fossil fuels.

VANEK SMITH: And they were getting people and investors angry enough to complain. It was kind of like a roadshow of shame.

GARCIA: And Bill claims it's been working.

MCKIBBEN: The New York City pension fund, as the comptroller of New York City said the other night in a meeting, he said, you know, every place I went for years, there were people there demanding that we divest, and I listened to them eventually, looked into what they were saying and understood they were right, and we moved. But without the pressure, it probably wouldn't have happened.

VANEK SMITH: Bill says the trillion-dollar Norwegian sovereign wealth fund pulled money out of fossil fuel investments, as well as the University of California endowment and pension fund.

GARCIA: But Bill adds that to really move the needle, they want to get to the banks. Fossil fuel companies need a lot of money for equipment and digging and drilling and exploration, and that money often comes in the form of financing and loans from banks. And so Bill's idea was to pressure the banks, and then maybe you can get them to stop loaning money to fossil fuel companies.

VANEK SMITH: Most of these banks are public. They have a fiduciary duty, and they're lending money because it's part of their business. You know, I mean, it's their job to make money, and one of the big ways they make money is by lending. And oil companies want to borrow the money. Why should they not lend it?

MCKIBBEN: True enough. Look; we're in what every scientist now is calling an emergency - maybe the most dire emergency that our species has ever faced. So people are going to have to make some changes in business as usual. For many people, those changes are really hard.

GARCIA: Bill admits this is a long shot. Banks do billions of dollars' worth of business with fossil fuel companies every year. They're some of the biggest, wealthiest companies on Earth. And if you're a bank, that's really attractive.

VANEK SMITH: Still, Bill says there is a precedent for pressuring banks on ethical grounds.

MCKIBBEN: During the apartheid era, there was enormous pressure on banks to stop lending the South African - the South African government and its subsidiaries, and a bunch of banks did eventually. It took a lot of work to push them there, but eventually they did. And that, along with stock divestment, was one of the things that people like Nelson Mandela credited with helping South Africans liberate themselves in that great struggle.

GARCIA: But again, this is not just an ethical issue. It's also about economics. And here's where things get complicated. See, our economy runs on fossil fuels. Our cars, our companies, our overseas trade, the heat in our homes - these things come largely from fossil fuels. It helps to underpin the global economy, which is why everyone freaks out when gas prices go up. People suffer. They have to pay more money.

VANEK SMITH: And if a ton of money vanishes from the fossil fuel industry too fast and before there's something that could replace it on a comparable scale, it could totally devastate the global economy in all kinds of ways - thousands of jobs, global trade, travel, getting food to people who need food. It could kick off a terrible economic crisis.

GARCIA: Now, Bill counters that not taking money out of fossil fuels fast enough also could have dire economic consequences. He points to a recent study from the Intergovernmental Panel on Climate Change which tried to put a price on climate change itself. And it calculated that for a 1.5 Celsius increase in the temperature - that's about 2.7 degrees Fahrenheit - it would cost about $54 trillion.

VANEK SMITH: To put that number in context, that's more than twice the value of the entire U.S. economy and about 10% of all the money on planet Earth right now. It's a lot. And many estimates say temperatures could rise by that much in about 30 years.

GARCIA: So what the heck? That's today's indicator, $54 trillion. Now, a lot of that estimated cost comes from things like crops dying due to changing weather or coastal flooding, cleaning up the damage and then fortifying the cities, and drought, so heat-related stress and illness.

VANEK SMITH: What kind of an impact can that have if banks withhold their funding?

MCKIBBEN: Oh, hell. I mean, that would be a sea change. The other banks would quickly follow. Stock market valuations would change dramatically. Flows of money would stop heading for coal and gas and oil and head much more directly into sun and wind. It would be as big a sea change as it's possible to imagine and, really, the only one that can come at that kind of speed.

VANEK SMITH: Bill says money is kind of a ham-fisted way to effect change. It can't have all the caveats and compromises that, like, a climate tree or a new law could have. But, he says, for making something change really fast and really dramatically, it's hard to beat money.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

GARCIA: This episode of THE INDICATOR was produced by Lena Sansgarry (ph), fact-checked by Nadia Lewis. Our editor is Paddy Hirsch. And THE INDICATOR is a production of NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

GARCIA: By the way, speaking of beating money, $20,000 for a Bloomberg Terminal - still think it might be worth it.

VANEK SMITH: You still think it might...

GARCIA: Still think it might be worth it.

VANEK SMITH: OK, OK. What would you look up on it, though? Like what - what?

GARCIA: You know what I'd look up on it, Stacey.

VANEK SMITH: The yield curve.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

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