Juggling Dynamite

The new book from Natural Capitalism author and environmental entrepreneur Paul Hawken, is called Drawdown.  Written as a how-to-guide, the book maps, measures, models, and describes the 100 most substantive solutions to global warming currently available. Work is already underway on a second volume of another 60 key technologies in process.

In a recent interview with VOX, Hawken talks about the dominant challenge currently facing life on our planet.   See:  A new book ranks the top 100 solutions to climate change. The results are surprising.

While attention has been building in recent years around high-profile areas like renewable energy and electric cars (and these are important), Hawken reminds that we cannot get to reversing the level of greenhouse gases just through smarter energy and vehicles.  Drawdown will require transformation in seven key categories: energy, food, women and girls, buildings and cities, land use, transport, and materials….The number one solution is educating girls and family planning, followed by plant-focused diets and refrigerant management:

A combination of educating girls and family planning, which together could reduce 120 gigatons of CO2-equivalent by 2050 — more than on- and offshore wind power combined (99 GT).

Also sitting atop the list, with an impact that dwarfs any single energy source: refrigerant management. (Don’t hear much about that, do you? Here’s a great Brad Plumer piece on it.)

Both reduced food waste and plant-rich diets, on their own, beat solar farms and rooftop solar combined.

As far as what harm Trump and his climate denying federal policies can inflict on the world, Hawken offers context:

…let’s be honest: The US has never led in this area. Ever. When they’ve tried on an executive level, they’ve never been supported by Congress. States have led, cities have led, but never the federal government.

Now the federal government is what it is. When [Trump] was elected, I went over every one [of the Drawdown solutions]. I said, “What can the [US federal] government do?” And it really isn’t that much.

I don’t want to in any way whistle past the graveyard of the enormous damage and harm President Trump can do, in terms of security and war and suffering. It’s just that people in the United States think that they’re the leaders on this stuff. They’re not. It’s Germany, China, France, Denmark.

They’re not cueing off the Trump administration. The rest of the world doesn’t take him seriously on this stuff.

Danielle joined the show yesterday. We talked about the emerging real estate bust in Canada. Home Capital Group, a large Canadian RE lender is on the skids. This is emblematic of what’s happening or will happen elsewhere in the world. The US’s markets are clearly starting to peak, where will the next bubble pop?   Here is a direct video link.

After topping 6000 in August 2007 on the hype and hope of voracious consumer demand during the subprime debt bubble, the Chinese Shanghai Composite Index collapsed 74% to 1585 by October 2008.  From that cyclical low the market then recovered 68% of its losses to crest at 4594 in May 2015.  Now back at 3052, the index remains still 50% below its 2007 peak, 10 years later.

This is how a secular bear moves: beginning from outrageous valuations and irrationally optimistic forecasts, stock prices move through manic swings, lots of risk and no net progress, typically for 15 to 20 years. As shown below, price is currently below the 2014 rally support, with a retest of the 2008 low still likely in the months ahead.

This is not just a Chinese market story.  A similar secular valuation and sentiment cycle has been driving the highly correlated international stock markets as well.

The Shanghai led the US stock market by 4 to 5 months at the peak of the last expansion (Dow peaked Dec 2007, Shanghai in August 2007) and trough (Dow in March 2009, Shanghai in October 2008).  Similar correlations are likely to follow this time as well.