Cashing in on apocalypse: Meet the people making a killing on climate change

The individuals most to blame for global warming are also the most likely to profit, says author McKenzie Funk

Published February 1, 2014 9:00PM (EST)

A wildfire burns in the hills just north of the San Gabriel Valley community of Glendora, Calif, Jan. 16, 2014.             (AP/Nick Ut)
A wildfire burns in the hills just north of the San Gabriel Valley community of Glendora, Calif, Jan. 16, 2014. (AP/Nick Ut)

For some, the global climate change crisis has been a call to action, the occasion for some of the biggest environmental movements of our time. For others, it's a business opportunity.

In Greenland, that's meant rushing to mine and drill the Arctic. For the Israelis, it's been a chance to market their mastery of artificial snowmaking (look for their techniques at work during the Sochi Olympics). The Dutch, no strangers to floods, are farming out their services to create sea-level-rise barriers, including to a post-Sandy New York. Major financial institutions in New York and London have recognized increased preciousness of water rights and farmland, and have invested their money accordingly.

Journalist McKenzie Funk spent the past six years traveling the world to document "the booming business of global warming." He spoke with Salon about the resulting book, "Windfall," which makes the compelling case that the effects of climate change are even more unequal than we've been led to believe. This interview has been lightly edited for space and clarity.

Profiting off the very thing that’s bringing us down – in some ways, you make global warming sound a lot like the financial crisis. Do you see the people you interviewed as being as complicit as those guys were? 

In the financial crisis, people were basically shorting the economy and they were sort of betting on failure, right? This is kind of the same idea with these people, so I think there is a little complicity -- but maybe not so much more than the rest of us have by not doing much at all.

I think these people are a little bit less aware of how they fit in the system. There’s a little bit of an indirect connection between someone buying water rights, for instance, and that sort of slowly causing the emissions that will slowly destroy the planet. There’s a slightly weaker connection than there was for the people in the financial world, who were actually seeing that the housing market was in trouble and who were betting on that failure.

Except when you talk about, say, the oil companies in the Arctic -- that’s obviously a clear case of a problem opening up an opportunity. The ice pulls back, you can drill, and then that leads to more people drilling for oil, which then causes more [global] warming.

You say, in the book, that in six years you never met a bad person. Do you really believe that none of these people are “villains” for profiting off climate change?

Well, it’s been interesting talking to people. I think it’s a little bit of a Rorschach test, this book. People bring their existing beliefs to it, and if some people are doing this or that they’re like “Oh my god, those assholes!”

I picked people who I thought were doing things that were not good. Absolutely. I didn’t go looking for heroes necessarily. But in almost every case I found real people behind them. People who had their own belief system, their own moral code, even if it was really different from my own. They often stuck to it and I think they thought they were good. I don’t think they were psychopaths.

I think they maybe were good, according to their own belief system.

For me, the takeaway was that there are a lot more bad ideas out there than there are bad people, and some of the sort of dogmas that people were sticking to were more dangerous than the intentions of the people themselves.

I went to South Sudan with a hedge fund manager who was partnering with the son of a rather scary general, and the manager’s idea was that we will help Africa by bringing in private investment. And we’ll partner with these generals who are feared by everybody else because they are the strongest guys, and power matters here. And by doing that, we will stabilize Africa. There might be some fighting, there might be some killing along the way, but this is the best way to get this done. He just believed it was that type of place. And you know, I didn’t totally buy it. He hated international aid for all the reasons a lot of people do: it spends a lot of money on land cruisers, it gives a lot of money to corrupt officials who are skimming off the top. I think that’s all true, but maybe it’s still worth doing. He was dead set against it. So yeah, there were some things that made me cringe.

The people who were trading vodka and grain for land

I think that one, for me, was not an easy one to swallow. And I had a later conversation with the guy and pushed back. I think the difference there was that they really knew what they were getting into. They knew how dirtily the land had been acquired. They were part of the economic system that was helping push this. You know, helping these peasants maybe get a little grain for a year or two and give them some vodka and then making off with their land -- I thought that was pretty bad, but I didn’t necessarily think the people themselves were evil. I just think they didn’t fully step back and consider what was going on.

In the same vein, it feels like the people who end up doing good, like the ones building storm barriers, are in it for self-interest first.

Yes. I’ve known a lot of people over the years, humanitarian types, who are really into their issue, and they’re doing good, but they’re really self-congratulatory for it. They’re doing good because it does something for their ego or it helps them. That’s not their only reason. But I think that’s true for all of us. We have complicated reasons for doing things and we tell ourselves, “I’m doing this for good reason,” when it’s actually just sometimes to stroke our own ego or to make money.

That seems like a spectrum. Like, the seawall builders — of course, I hope they come up with some good designs. Even these guys who are growing these genetically modified mosquitoes and releasing them in clouds over the Caribbean, and perhaps Florida down the line. I think they’re very well-meaning. Oxitec, that company in particular, I think, is not truly capitalistic. I think they want to do relatively good things. There might be a couple broken eggs along the way but they want to stop dengue fever.

The main thing was just spending a lot of time with these people who I was not expecting to like very much or think were that great. By and large they were fine. They were just people.

So from what you’ve seen, how much of this is still a fringe industry, and how much are people really profiting off climate change? I did just see a news story about how the Arctic’s getting its own shipping codes, because the melting ice has opened it up to boats. So not to be crass, but it does seem like more opportunities are sort of opening. Is that something that you’re seeing?

It’s the Arctic especially where you’re really seeing this shift toward opportunism. I think that’s because the physical impacts of climate change are simply more visible there. It’s warming twice as quickly, and as the ice is pulling back, it’s really tangible and it’s really changing things now. The rest is happening not quite as quickly -- there are obviously droughts everywhere, including the one in California, but for those the signal and the noise are a little harder to decipher, still, where the Arctic is just so obvious.

So as I think I mentioned in the book, there was a huge jump of water investment around 2007, after the IPCC report came out and after"An Inconvenient Truth." There were all these new mutual funds and different investment schemes involving water. Some of them crashed and burned; some are still going. So that’s happening.

The sea-level rise stuff, well, technologies that deal with that are still pretty nascent and investment there I think is still pretty much just the Dutch. They’ve been in this a long time and have a lot of expertise to export to the rest of the world. On a New York finance level, or London finance level, I still think the large portion of the money is going toward clean energy. It’s going toward mitigation and trying to stop climate change and not toward betting on failure. It’s just that I saw some people are starting to hedge their bets -- they’re starting to do both.

So, is there money to be made in green energy? Your book made it seem, pessimistically, like we might be past that, or that the people who have the money and smarts to invest in this sort of thing have decided that climate change is inevitable by now.

I actually see some hope with regard to that. Investment in the solar industry has been way up in recent months. And climate change is one of those thing where it's not like we can flip a switch and either have it or avert it. It’s going to be a scale. We can have it be kind of bad -- as we’re already pretty much on the road to dealing with some pretty negative impacts of climate change -- but the longer we wait to do anything, the worse it’ll get. As an investor I think you’ll notice that. I think investors will see that this isn’t going to go away; people are going to pay more and more attention because the impacts are becoming more visible. And I think that will push people toward green energy. It’s just a question of whether it’s quick enough, given the lags in the system, to actually avert any real crisis. I don’t know the answer to that part. But I don’t think that solar is dead just because people are betting on failure; I think that people are betting on failure, they’re going to bet on success, and they are going to do them both at the same time. They’ll try to make money on whichever future turns out.

Can you make the argument that the same countries that most contributed to bringing about climate change are the same ones that are most likely to profit?

That to me was one of the most important things I learned in reporting this. I came away from it not necessarily thinking the individual people were villainous, but recognizing the systemic problems: in the West, we’re the ones that emitted the most carbon and now we’re the ones most poised to profit. Or at least the most poised to be able to protect ourselves from the impacts of climate change. And so you see this disconnect, where in the far north climate change might actually just be an opportunity for certain industries and people might get richer. Greenland, for example, sees this great opportunity in climate change. And then you get down to the great middle of the planet, and those are people that emitted very little carbon and are going to get the absolute worst of the impacts. So it’s sort of exacerbating all the existing imbalances in the world all the more.

It adds a complicating layer to that debate over responsibility, like what happened at the climate talks over the Philippines’ typhoon. 

I think that actually matters a lot for dealing with this problem. It’s us and the other wealthy parts of the world understanding that we’re not going to get it as bad. If we are going to get rich off it, I think that sort of raises the moral stakes. It means that we’re not all in this together. We’re kind of screwing over other parts of the world if we don’t take action. So yeah, “the rich are going to get richer” is a good takeaway. 

So you argue that, so far as fighting climate change goes, appealing to self-interest doesn’t work. Do you have any insights about how we can make people care more?

I don’t think self-interest is useless. I don’t think capitalism is necessarily a failure in all cases. It’s just this idea that we can use the market – that if we can just get people scared enough about climate change, and they get so scared that they then realize they need to stop emitting because of self-interest, and that will fix the problem -- I just don’t think that whole scenario works. Not when the people who are emitting the most are the least likely to get hit by climate change. So that’s what I mean by self-interest running into limits.

What could go in its place? I think a lot of people do a lot of things for reasons that aren’t actually for their economic benefit or even for their direct benefit. To talk about South Sudan again, that was a country championed by American evangelicals who wanted to do good for another part of the world. You see a lot of things going on in the world that we do totally out of empathy. Aid that goes to the Philippines isn’t necessarily because we think there is going to be some spillover to us; it’s because something bad happened there and we want to help. 

In this country we talk about, Is there a market case for it? Is Amtrak making enough money to justify itself? Does the Post Office make enough money to justify itself? In our day-to-day lives we measure so many things not based on money, and I’m hoping that people, once they understand the moral stakes, will take a more moral stance on climate change. Not because they’ve been bad, but because they might actually care about what happens to people far away.

I’m not particularly hopeful that that will happen quickly, but I don’t think that it’s impossible to think that people care, that empathy does exist. And I think that as the world globalizes, those faraway places that are going to get hit more are in some ways nearer, thanks to the Internet, thanks to blanket coverage on TV. We cared about the revolution in Egypt, for instance. That wasn’t pure self-interest. I think people identified with the protestors in Tahrir Square.

So there is still cause to be optimistic?

Somewhat. I’m not optimistic, really, about that stuff. But I think people dismiss it automatically and think there always has to be a market case for things, and if that’s what we go into with climate change, I’m frankly worried. I’m not sure we’re ever going to get scared enough to do anything about it.

By Lindsay Abrams

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