Understanding China, can BP help with climate change?
February 13, 2023 - The Nett Report
Every other week The Nett Report provides readers with thoughtful perspectives useful to navigating life in a changing world. Past issues can be found here (recent) and here (past three years).
Climate Change
Can oil companies positively address climate change?
On February 13, 2023, CEO Daily reported on an interview with BP CEO Bernard Looney, who believes oil companies can play a critical role in addressing climate change. Some quotes:
Oil and gas aren’t going away for decades. Disinvestment by shareholders serves no purpose except to allow investors who don’t care about the environment to earn a higher return. Better to stay in and push for change.
Let’s say you wanted to start an EV charging company tomorrow. The number one issue you have is access. There are 550 million people who live within 20 minutes of a BP site. Why wouldn’t we use that?
Let’s say you want to start a sustainable aviation fuel business. To decarbonize aviation, you will need to do three things:
One, you need feedstock. We’ve got one of the largest trading organizations in the world to trade commodities.
The second thing you’ll have to do is build a plant. We have decades of experience in building plants.
And the final thing you have to do is sell it. BP is in 700 airports globally, in 70 countries. We already have the infrastructure, the airports, and the decades-long relationship with every airline in the world.
Are gas station bans next on the climate action front?
A January 17, 2023, article in Esri’s Where Next digital magazine explored the future of gas stations, their impact on the businesses near where they are located, and whether gas station bans are next on the climate action agenda. In March 2021, Petaluma, California, became the first city in the US to ban the building of new gas stations. The article says “nearby cities have since adopted ordinances to halt future gas station construction, and local leaders in New York and British Columbia are exploring similar policies. The trend could reshape the economic ecosystems and commercial centers that depend on how and where people drive.”
Toyota rejects strategy to build an all-EV fleet
Toyota has been a leader in addressing climate change through its innovative automotive designs, most notably with the hybrid Prius. However, according to February 1, 2023, article in motori.com, Toyota “won’t make the shift to an all-electric lineup, and now it’s using science to tell EV-only extremists that they’re wrong.” Toyota says that “the best approach for a sustainable future is a multi-pronged one, blending EVs with hybrids and other green technologies, and not a full-on commitment to battery-powered cars only.” The company believes there will be a shortage of lithium for batteries to power EVs in the future, and the reduced amount of lithium needed for a hybrid vehicle means “a big fleet of hybrids would make a bigger positive impact on emissions than a smaller fleet of EVs, and Toyota says this nuance is lost in the talks about adopting EVs on a global scale.”
The Political Divide
Understanding China
Prompted by recent talk about the “coming war with China,” writer James Fallows, in his February 1, 2023, Breaking the News newsletter, provides several points to better understand the divide. “What I really hope is that points like these will become part of “oh, that’s obvious” conventional wisdom,” he writes.
The more you know, the less you know. It’s not that your store of knowledge keeps going down. It’s that your awareness of what you don’t know—and won’t ever know—keeps going up, and faster.
China is a problem. China as an enemy would be worse. We just know that this China is more trouble to deal with than its predecessors. This all makes China a problem. A challenge. A challenge that, because of its scale, is not going away. What could be worse? Worse would be a China geared toward thinking of the U.S. not as a rival but as an outright enemy. All you have to do is look at Vladimir Putin’s Russia to see how much more serious that could be.
Things look different up close. China looks most imposing and unstoppable from a distance. And most complicated and fragile up close.
China cares more about China than about the U.S. What ranks first is China. Will a new policy help the leaders? Will it keep them and the Party in power? Will it hurt their rivals or critics? Will it make enough people in the country feel better off? After that, they can talk about what it means for the U.S.
The U.S. should care more about the U.S. than about China. When it comes to charting its own economic and social future, the U.S. should do things because they are good for Americans and not because we need to “keep up with China.” And we should talk about them in those terms.
(5 1/2) Stop the war talk. Resist the “implications of the “Thucydides Trap” model for the U.S. and China. This is the idea that a rising power and a declining power are practically doomed to clash.”
Future of Work / The Economy
“My advice is: Get your company fit for growth. Do all the cost restructuring that needs to be done, then reinvest in growth. And that growth needs to be powered by technology. That will be the future.” - Mohamed Kande, global advisory lead, PwC
“In the long run, we’re all dead.” - British economist John Maynard Keynes pointing out that most people don’t care that the economy eventually will correct itself because people live today and often can’t afford to wait.
Experts differ on the possibility of a recession in 2023
A number of outlets have opined on the possibility of a recession in 2023. Those opinions differ widely. Here’s a sampling.
“The EU economy looks set to avoid a recession as a coordinated response from governments outweighed the ongoing fallout from Russia's war in Ukraine, according to the European Commission.” Politico, February 13, 2023
“Continued strength in the labor market and early signs of improvement in the business surveys suggest that the risk of a near-term slump has diminished notably.” Goldman Sachs, February 6, 2023
“2023 will be an OK year to the extent that it will be recessionary, but not brutally so.” Alan Nevin’s 2023 Economic Forecast for the Nation and San Diego, January 2023
“A series of severe and mutually reinforcing shocks — the COVID-19 pandemic, the war in Ukraine and resulting food and energy crises, surging inflation, debt distress, as well as the climate emergency — battered the world economy in 2022. Against this backdrop, world output growth is projected to slow from an estimated 3.0 percent in 2022 to 1.9 percent in 2023, marking one of the lowest growth rates in recent decades.” United Nations World Economic Situation and Prospects 2023, February 2023
U.S. industrial investments “will change the contours of the global economy”
Referring to what he called “the triple play of the bipartisan infrastructure bill, the CHIPS Act, and the Inflation Reduction Act” which invested some $2 trillion dollars of taxpayer money in industrial policy, Fortune CEO Alan Murray wrote on February 13, 2023, that this “massive investment in industrial policy is real and will change the contours of the global economy. Whether you favor or oppose it, it is a huge break from 50 years of American economic policy orthodoxy.”
The price of eggs – avian flu and supply chain problems or corporate profits?
The New York Times’ February 3, 2023, The Morning newsletter reported what we all have been hearing about the price of eggs, which has more than doubled. The article blamed increases in grain prices (inflation), avian flu (which killed 44 million egg-laying hens), and demand persisting in the face of less supply. Former U.S. Labor Secretary Robert Reich has a different take. In his January 26, 2023, newsletter, he writes that although avian flu did kill hens, egg production remained steady and that the flock was never less than 7-8 percent lower in 2022 than in 2021. He also says the largest egg producer, Cal-Maine, didn’t experience increases in production costs that explain the rise in prices. Reich reported that Cal-Maine’s CFO “conceded that the firm’s high profits were due to “significantly higher selling prices, our enduring focus on cost control, and our ability to adapt to inflationary market pressures.”
Covid-19
Nothing new this week that you don’t already know about Covid-19. Stay safe. Stay healthy!
What experts say about avian flu’s risk to humans
While bird flu might have had an impact on egg prices, to date, only one person in the U.S. is known to have contracted the virus, and that was in April 2022. According to a February 8, 2023, article in Forbes, “the bird flu outbreak is the deadliest one in almost ten years … and while infection in humans is rare, some experts are gravely concerned it could eventually make the leap and spread among humans … The continuous circulation of the virus poses great risks and may result in more spillover events in mammals ... A virus that is able to transmit to mammals needs to be stopped before it may become a matter of public health concern, as we learned from the SARS-CoV2 lesson.”
The Nett Light-Side
“Aging seems to be the only available way to live a long life.” - Daniel-Francois-Esprit Auber, French composer (1782-1871)
A last-minute tip for a sustainable Valentine’s Day: “Roses are red, the ocean is blue. Buy locally grown flowers instead of those that traveled far for you.”
What Super Bowl winners and losers are paid
A February 12, 2023, article in Fortune details what players are paid for participating in the Super Bowl, including winners, losers, and those who joined the team late in the season.
Super Bowl mom’s tactful reply – it’s about grandchildren
Jason (Eagles, age 35) and Travis (Chiefs, age 33) Kelce are the first brothers to play against each other in a Super Bowl. On the Today Show on February 1, 2023, their mom, Donna Kelce, was asked who she would be rooting for on the day of the big game. Her answer was an exercise in tact: “Jason would say I am going to root for the baby in the family, and I keep trying to tell him ‘but you have given me grandchildren.’”
Wing-walker free-falls from a biplane and is rescued by another
This 1983 video from MacGillivray Freeman documents “a wing-walker flying, falling and being rescued over the Grand Canyon in the film Flyers. This stunt was achieved without any CGI, just the expert skills of skydiver Kevin Donnelly and stunt pilot Art Scholl.”
About Carl Nettleton
Carl Nettleton is an award-winning writer, speaker, thought partner, facilitator, and subject-matter expert regarding water, climate, sustainability, the ocean, and binational U.S.-Mexico border affairs. Nettleton Strategies, the consultancy he founded in 2007, is a trusted source of analysis and advice on issues at the forefront of public policy, business, and the environment. He helps people to think strategically about their options for change. He is also the founder of OpenOceans Global, a nonprofit addressing ocean plastic in a new way.
Nettleton Strategies
www.nettstrategies.com
Great suggestion Sanjeet. I have been well aware that there isn't much to report on Covid - but since it was the subject that started the newsletter, I have been holding off from deleting it. Do you have a suggestion for a replacement?
Another insightful issue, sir. I have one suggestion for you. As the world finally gets ready to bid final goodbyes to Covid-19, don't you think it will be better to replace the section on the virus with something else. Something which is now coming into play after the pandemic winds down.