on January 28, 2014
"Windfall" combines the lessons of "An Inconvenient Truth," by Al Gore, and "The Big Short," by Michael Lewis. It is a well-reported account of efforts by investors to hedge their bets on climate change. Unlike those focusing upon industries aimed at averting climate change, such as solar and wind energy, these investors are looking to profit from the likely, if not inevitable, warming of the earth. This amounts to a bet against the prospect that global warming can be controlled. It is, arguably, a bet against the survival of the human race. This is the ultimate "Big Short," and it is a bet being made by some ot the world's most sophisticated investors.
The message is extraordinarily timely. The narrative skill of the author puts one in mind of John McPhee. "Windfall" is at once enlightening and entertaining. It is a must read for those interested in the economics of climate change and, for that matter, the future of the earth
First off, this book is just fun to read. The author has found some great people and places, and built unforgettable sketches around them, and embedded the disparate material in a coherent narrative. He takes a technical, unsexy and complex topic and makes it as entertaining as escapist fluff. It's journalism at its best. It will remind you of writers like Michael Lewis and Jim McManus. I wish McKenzie Funk a long career.
The book consists of investigations into a variety of people hoping to make money from climate change. A major distinction, which the author curiously does not recognize, is between the pay-me-now and the pay-me-later folks. The first group claims to be able to predict climate change (or its consequences or the consequences of specific policies) and wants money today whether they are right or wrong: investment management fees, research funding, salaries to legislate or agitate, subsidies. The pay-me-later group is spending its own money today in projects that will pay off later only if they are right.
As you would expect, the differences between these types of people are dramatic. Among pay-me-now people, "the assumption is that climate change now suffers mainly from a PR problem." They put great stress on "consensus" and never fail to mention "overwhelming evidence." Given the variety of questions related to climate change, I'm pretty skeptical of someone who claims overwhelming evidence for everything, especially without a track record making money from successful prediction. Given their analysis of the problem, they spend their efforts on PR: raising money from investors and granting agencies and donors, politicking, lobbying; and their prior work experience is in these areas.
The pay-me-later group instead sees climate change as a huge variety of related issues (including many that do not involve climate) and the difficulty is understanding individual aspects well enough to design practical solutions to mitigate damage--or even turn problems into opportunity--for both social good and personal profit. While relative emphasis on the two motives varies among the people in the book, the pay-me-later folks discuss that issue seriously while the pay-me-now folks are either uncomfortable with the question or give hard-to-credit answers. Pay-me-later people are harder to find than the first group, since they're spending their time researching and building rather than arguing and asking for money.
The tone of the book is mildly pessimistic leavened with a dash of humanism. Climate change is happening, and we lack the collective will to take effective top-down action. Therefore our reaction is going to be shaped bottom-up by people who are thinking of personal profit rather than the global good. The result is unpredictable, but human. We're making the planet we deserve, because of who we are, not the perfect planet that angels would prefer.
I came away with more optimism. There are smart, energetic people with successful track records working hard on the detailed micro issues that matter far more than global averages or sweeping regulations with unintended consequences. This is what has navigated us through the massive changes in the past, and it's our best hope for the changes of the future, and there will be massive changes to climate and lots of other stuff, whatever legislation is passed concerning carbon emissions. While all the pay-me-later people profiled in the book may be wrong individually, we know they are trying to be right since they're betting their own money, and they represent a sufficiently diverse group that I expect enough of them to be right to shape the future in a manner that is good for both people and the planet.
The pay-me-now people don't bother me. They'll extract some money and pass some bad rules, but they'd be doing that on some other issue if they hadn't jumped on the climate change bandwagon. It's not as if they have useful skills to apply to other endeavors, and they need to eat like everyone else. At least this book manages to refine something of value from their efforts, we get to be entertained by them for a while.
This book puts a human face on an issue that is usually expressed in numbers, and turns a keen investigator's eye on areas dominated by bombast. I suspect it will not change minds on any major issue. People enamored of coercive top-down solutions based on consensus predication and involving mass sacrifice will find hope in the determination and altruism of the pay-me-now group while laughing at the small-scale vision and petty motives of the pay-me-later group. The author's tone is neutral--perhaps "independent" is a better word--enough that you can't tell who he is skewering and who he is burnishing. People like me will laugh at the profiteers and take comfort in the entrepreneurs. But it is a gigantic achievement that for an issue as important as climate change, we have a book that will unite everyone with some laughter and some hope.
There's a fairly popular TED talk by the author that covers a lot of the same territory, but in very little detail. That could give you a quick preview of whether the book is likely to be interesting to you.
It's a strange tale, of essentially good people, who are aiming to profit from the massive climate change underway. It's clear that there will be winners (especially in the northern hemisphere, farther north) and losers (for sure on islands and in the tropics). The book is a very different look at climate change, one that I had never given much thought to, but which is important. Regardless of sea levels, there will be efforts to save Manhattan, we will burn a lot more fossil fuel in any future path, and the first world will continue to not pay to fix the effects of warning in the third world.
One criticism is that the coverage of geoengineering feels abbreviated. Admittedly that's the one area of profit making from climate change that I knew about ahead of this book.
This book adds a great deal to our understanding of climate change. Author McKenzie Funk focuses not on atmospheric science, which has been adequately covered before, but rather on the complex human economic reaction to it, which has not. This exploration is replete with ironies.
Funk divides his book into three sections: the Melt, the Drought, and the Deluge- in other words, the arctic, the dry regions, and the threatened coasts and islands. He travels widely and interviews many- in fact the amount of work he put into this over six years is intimidating. A fascinating pattern emerges: while humans collectively talk a good line about fixing global warming, as individuals or members of families or nations we focus more on ways to survive it or to thrive despite it. This realization echoes Jared Diamond's statement in his book "Collapse"- that the Easter Islander who cut down the last tree there probably did so because someone else would get the wood if he were to leave the tree standing. In other words, the "tragedy of the commons" dictates that the human race will indulge in a race to the bottom on climate change if we cannot forge a planetary agreement to combat it.
An entertaining and insightful look at human nature, this certainly gives the lie to those on the right wing who argue that global warming is a hoax designed to make scientists rich. Funk makes it clear that the world of economics has come to accept that global warming is quite real. Instead of working to fix it, however, that world is now focusing on how to turn a profit while letting it happen. Warning, there is a great deal of information this book even though it is under 300 pages in length. It is slow going at times! The effort bogs down under sheer detail in the middle: insulation blankets to protect ski slopes in the Alps, fences around Bangladesh to wall in climate refugees, get rich quick schemes based on selling rights to diminishing water sources or to protect insured homes from wildfires while letting uninsured homes burn. What keeps the reader going is a simple feeling of amazement at the crazy, scary, but basically logical world that Funk uncovers. His final chapter is on the weirdest and most ironic topic, geoengineering. He follows it with an epilogue to establish his own personal viewpoint.
“Windfall” is virtually certain to be the most important book on the topic of global warming to be published in 2014, even though we have not even gotten to 2014 yet as I write this.
Author McKenzie Funk goes gonzo across the globe, minus the booze and drugs, and delves into all the right people and places. Where is the money going? Do you believe? It doesn't matter what you believe, billions are being spent by the same companies that are funding climate denial; they are buying up farmland in Canada that is opening up with temperature shift, they are buying up mineral rights under formerly icebound lands and seas. GM crops are being developed, Dutch dike builders are being consulted. And water; fresh water is becoming a commodity. From new snow machines that are keeping ski runs in business, to the future of indoor skiing as traditional areas melt, 'Windfall' has it all. Much of the climate literature is dry, IPCC reports read like desiccated computer manuals. Mr. Funk makes the climate's cutting edge accessible, human, and fun.
on February 11, 2014
*A full summary of this book is available here: An Executive Summary of Mckenzie Funk's 'Windfall: The Booming Business of Global Warming'
The main argument: That the earth's climate is warming, and we are the main cause of this phenomenon (through the emission of greenhouse gases, including especially carbon), is now beyond dispute to anyone with an objective mind and an appreciation of science.
The clearest and most obvious effects of global warming are the melting of glacial ice and the corresponding rise in sea levels. But the effects of a warming world do not end here, we now know. The models tell us that warming also means less rain and even drought and desertification in some areas; more rain in others, often in deluges; stronger storms, such as hurricanes and cyclones; and an acidifying ocean.
On a human scale, this means salinated and eroding coast lines; desiccated farmland and more wild fires in drier areas; increased flooding and soil erosion in suddenly wetter areas; more destructive and deadly storms; and threatened sea life.
With all these negative effects, you would think that the people, companies and governments of the world would be eager to step in and do everything we can to stem the rising tide of climate change (including especially cutting emissions). Instead, however, what we have seen is much talk and little action.
There are several reasons for this complacency. One of the leading ones is that the effects of climate change often seem somewhat removed from our daily lives. Indeed, even though we are now seeing the beginnings of many of the effects listed above, most of us glimpse at most a small fraction of these effects. And besides, it is difficult to attribute any one of them to global warming specifically. What's more, we like our way of life, and it's difficult to imagine changing it for something as abstract and often remote as global weather patterns.
In connection with this, many of us are wont to think that the best approach to climate change might simply be to adapt. We're an innovative species, after all, what's to stop us from innovating our way out of trouble? This idea is especially appealing to the innovators and entrepreneurs among us, for whom not only peace of mind, but profits await. Given that this is the case, it is no surprise that we are already beginning to see some very innovative business approaches to adapting to the new normal. Everything from extensive water desalination plants, to man-made floating land-masses, to storm-surge sea walls, to snow machines and indoor skiing resorts.
Continuing with our wishful train of thought, it might also occur to us that as we are innovating to adapt, we should also be able to innovate to help mitigate and even halt climate change without necessarily weaning ourselves off oil until it is more convenient to do so. Once again, there are profits to be made here, and once again, such innovations are already underway. Everything from the development of alternative forms of energy (including solar, wind, and other renewables), to ingenious ways to manipulate the weather and climate back to normal (known as geoengineering).
Beyond optimism (some might say denial), and the fact that there are big profits to be made from adapting to climate change, there is also one other factor to consider in our relative complacency when it comes to halting and reversing carbon emissions. That is that while many of the effects of climate change listed above are bad for many people, at least some are good for some people some of the time--at least in the short-term. For instance, while melting ice stands to swamp some parts of the world, it is also leaving large tracts of land in the arctic open for resource exploration and shipping routes. In addition, while shifting hydrology is leading to the loss of large tracts of farmland in drier areas, it is also often leading to richer agriculture in newly warmer, wetter areas. Also, while shrinking farmland and water resources is leading to food and water shortages, and rising prices, those in control of these precious resources are making a fortune.
As we can see, then, being complacent about cutting carbon emissions is not only pleasant for most of us, for some of us, it's even a windfall! And that brings us to the topic of the book: all the things that are now being done to profit off of climate change (which we have now been introduced to above).
First off, on the whole this book is very good. It is extremely well researched and very well written. Also, the author does well to make sense of our relative complacency regarding cutting emissions, and just what is being done to address climate change right now. My one and only objection to the book is that though the author claims he will be entirely neutral in the book, it becomes clear that he favors the carbon emissions cutting route to the adaptation route (all the while admitting to recently having bought a bigger car, and flying all over the world for the purposes of his book). And one does wonder whether in the end the author's political stance really does affect his supposedly objective reporting (though for the most part we don't get the impression that this is true). All in all, though, a very good and interesting book. A full summary of the book is available here: An Executive Summary of Mckenzie Funk's 'Windfall: The Booming Business of Global Warming'
on June 16, 2015
I ordered this book (subtitle: "The Booming Business of Global Warming") as soon as I saw the premise: an exploration of the businesses that will profit from climate change and the businesses whose profits are driving climate change.
Restated from a positive perspective, these businesses profit from adaptation or a lack of mitigation, respectively.
Restated from a normative perspective, they are businesses that serve or exploit society.
So you can see that there's going to be a lot of hope and anguish in this book, except that it's often buried under discussions of revenue, jobs and market share. As an economist, I can appreciate the fact that money incentivizes a lot of behavior. As a human, I am horrified that so many clever people are making money on the corruption, fear and ignorance of politicians. (The book does not discuss a carbon tax or other mitigation policies that would erase the profits under discussion, and that's not the author's job. It's just a context that depresses me whenever I think of the magnificence of our "civilization" that humans seem determined to ruin.)
So... the book is divided into three sections: Melt, Drought, and Deluge.
In Melt, Funk tells about Canada's rush to defend the Northwest passage that's opening with the shrinking arctic; how Shell oil went from "planning for less oil" to "drilling the arctic" as politicians left the path of Blueprints (limiting carbon emissions) for Scramble (dealing with too much carbon); the development of natural resources (and political shenanigans) as Greenland loses its glaciers; and how the Israelis got into selling (artificial) snow in the Alps. These chapters describe businesses that are making money as ice melts.
In Drought, Funk joins private firefighters that protect insured houses while neighbors burn down; the traders who buy and sell water rights (covered often in this blog); the rush to buy farmland in poor countries to ship food to richer countries (see my article PDF); and the battle to halt desertification in Africa (and the refugees fleeing that desertification for Europe). These chapters are about the rich getting richer as they plan ahead and hedge their lifestyles, while the poor are increasingly marginalized.
In Deluge, Funk explores the tensions along Bangladesh's borders, which are likely to be overrun as some of the 150 million residents flee their sinking, flooding delta; how the Dutch are willing to sell seawalls to anyone with cash (sorry Bangladeshis!); the quest to outwit nature by destroying mosquitoes before they can bring tropical diseases to middle latitudes; and the hopes of geoengineers (a group that deserves to be slandered with rain makers). Yes, there are some "solutions" in these chapters, but their cost (via adaptation) is so extravagant compared to mitigation that I think that we should be handing out penny-wise, pound-foolish awards to our so-called "leaders."
In his final chapter, Funk reflects on his six years of seeing, thinking and talking about climate change. His words say it best:
In psychology, magical thinking is the fallacy that thoughts correspond to actions— that to think is to do, to believe is to act. Perhaps the most magical assumption of the moment is that our growing belief in climate change will lead to a real effort to stop it. But as I discovered in Canada and Greenland and Sudan and Seattle and all over the globe, that is not automatically true. We are noticing that in this new world, there is new oil to find. There is new cropland to farm. There are new machines to be built. From what I have seen in six years of reporting this book, the climate is changing faster than we are.
The hardest truth about climate change is that it is not equally bad for everyone. Some people -- the rich, the northern -- will find ways to thrive while others cannot, and many people will wall themselves off from the worst effects of warming while others remain on the wrong side. The problem with our profiting off this disaster is not that it is morally bankrupt to do so but that climate change, unlike some other disasters, is man- made. The people most responsible for historic greenhouse emissions are also the most likely to succeed in this new reality and the least likely to feel a mortal threat from continued warming. The imbalance between rich and north and poor and south -- inherited from history and geography, accelerated by warming -- is becoming even more entrenched
Climate change is often framed as a scientific or economic or environmental issue, not often enough as an issue of human justice. This, too, needs to change. From this moment on, many of us could get rich. Many of us could get high. Life will go on. Before it does, we should all make sure we understand the reality of what we’re buying.
The people who should read this book cannot afford it or cannot be distracted from their profits. What should those who read it do? The only action that comes to mind is revolution, but that's unlikely to succeed when citizens are distracted and deluded (e.g., Russia and the US), reactionaries are backed by crony capitalists (e.g., Egypt and Turkey), or people are too worried about big screen TVs to see the bigger picture (e.g., India and Australia). Indeed, it's hard to see how any leaders can win support from voters by promising less now for more later. Does this mean that China's dictators are our last hope?
Bottom Line: I give this book FIVE STARS for exploring the stories of those who are profiting from our demise.
on April 9, 2014
Funk is a fine reporter, who seems to enjoy physical challenges and risk. He is enterprising and good in getting people to talk and assist him. Thus, "Windfall" is generally interesting as a combination travel book and investigative report, although at times I found myself skimming. Funk is outraged that the richer countries are not doing more to fight global warming or assist its victims, but he can be sloppy in his thinking, and lacks nuance in understanding the science. Most climate scientists are careful to emphasize the increased level of uncertainty when trying to forecast regional weather effects as contrasted to general worldwide trends, i.e. increasing temperature, rising waters, probably more extreme weather events; it is therefore not clear what particular regional changes in rainfall patterns can be ascribed to global warming. Funk actually berates the Gates Foundation for not "spending a penny" to help cut global emissions even while recognizing the good it is doing to help people in poor countries. Funk also seemed outraged that Australians found it more valuable to devote water to raising wine than wheat; there are times the free market fails, but this was not one of them.
Some of the information that surprised me: between 2003 and 2008 2,690 desalinization plants were built; India is building a fence to keep Bangladeshi's out; in the American West you can buy insurance type plans so that private firefighters will attempt to save your house, while of course ignoring other houses that might be in harm's way; Netherland firms can construct floating islands and hope to sell them to the Maldives; a conference at Columbia University discussed how small island nations could hold on to some of the benefits of nationhood such as territorial fishing rights, even if their people have to flee rising waters; a "senior (US) intelligence official" told Funk that of all the geopolitical concerns arising from global warming, not to "worry too much about the other four countries" with claims to the Arctic, since a melting Arctic would be such a windfall to all 5 countries bordering it (the Canadians might not agree); it may be possible to mitigate hurricane strength by a device which mixes surface and sub-surface water, thereby cooling the surface; spewing sulfur into the atmosphere to achieve the cooling caused by volcanic eruptions may interfere with rainfall patterns in a detrimental way, based on analysis of historical eruptions - but there is patent on how to do it.
on March 15, 2015
This is one of the best books I’ve ever read. (I’m 65 years old and have read a lot.) Here’s why it is outstanding:
1. The research is broad and deep, and the revelations are startling.
2. The reporting is balanced—not the least bit moralistic or histrionic, which happens often when you have such a controversial and anxiety-producing subject.
3. The writing is delightful and fun, even when describing scientific, technical, and commercial subjects.
I have a bachelor’s degree in geography. That does not make me a climatologist. But I do have a basis for understanding and evaluating the research and debates around global warming. This book is sobering without scolding.
By now most folk are aware of the basic arguments for/against climate change, the looming energy crisis and the resource problems, particularly surrounding water and arable land. Funk takes a "neutral position and then immediately proceeds to create a narrative about entrepreneurs who are basically libertarian neutral as to the consequences and seek only the opportunity much like the early pioneers who crossed the US plains seeking opportunities. Making money in the "paper markets" of Wall Street is boring and limiting compared to seeking the challenges in the field. This can be water rights in the United States, farm land in Africa or South America or natural resources, including oil and minerals as the ice sheets in the north open up access.
He misses the back story surrounding the "billions" from those very same, bored, "Wall Street" investors who are willing to buy a piece of the potential opportunities created by these venture entrepreneurs. Without this pile of funds knowingly choosing to support these ventures, the entrepreneurs would be forced, perhaps to approach these opportunities differently. Why, with all the socially and environmentally screened funds,would one actively seek to support this path given the same knowledge about the climate issues?
Like Buffet in his book, 40 Chances, or Ramalingam in his book, Aid as Chaos, Funk is caught up in the narrative in the field and the chance to touch and sense the environment and the players. Unfortunately, he can't make up his mind whether he needs to play Joe Friday or to play the personalities like Tom Wolfe. Should we have "the facts/the story" or is the reader to be taken, as in a BBC feature, breathlessly over rutted roads in a LandCruiser, over acquired hectares in a twin bladed copter or sitting with a deal cutting general in the midst of civil unrest.
It is volume of mixed stories such as paving a canal to save water from seeping into the ground, saving it for a city while denying the benefit of the seepage to support agriculture when the water resurfaces, to acquiring millions of acres in Africa and Asian by countries (investors) concerned about food shortage in their own counties. Funk points out that no one has "clean hands" and then moves on. Next story!
If one reads the acknowledgements, one finds that this volume was supported at various points by editors and publishers of books and articles each with a different focus. This may be part of Funks problem since the volume seems to be a stylistic assemblage on a common theme. It is not a boring nor an exciting read but, after awhile, one gets tired of examples tied together by theme and wonders where the substance lies. Perhaps its more like a travel guide flyover dipping here and there to point out sites on the journey