By: Nora Germain
If you’re like me, in a typical week you’ll be inundated with many different pieces of news from a wide array of sectors. Recently I have come across two rather interesting stories, but to my knowledge they have not been discussed side by side. I see certain groups and outlets talking about one, and certain groups and outlets talking about the other. The fact that these two stories are not being discussed as one larger story is shocking to me, and I am referring to the fight to preserve old growth forests as well as the price of lumber.
First let’s talk about old growth forests. Many people do not know that old growth forests, the ones that are the oldest, most developed, most diverse and thus the most climate resistant, store a lot more carbon than newer, younger forests, especially tree groves with only one or two types of trees in them. These older forests, also called mature forests, have been developing for thousands and in some cases millions of years. It’s not just the trees that make them incredibly important for preserving a stable climate, however.
We also have to look at the age and quality of the soil, the root systems, the moss, the fungi and other things growing in and around these systems that also contribute to their massive carbon sequestration power. It’s estimated that the largest 1% of trees store up to 50% of a forest’s carbon. Although there is still a lot of research yet to be done on this subject, one cannot discount the invaluable habitats that old growth forests provide, and the homes that those habitats provide to millions of species. Since we are in an extinction crisis, biodiversity is more important now than ever before.
Regardless of the extinction crisis however, Earth faces a carbon crisis too, and when talking about climate solutions, it’s often suggested that planting new trees will help solve it. Nobody in their right mind would advocate for less tree planting as a rule — however, it’s important to think about what kinds of trees are being planted, and whether or not an ecosystem can survive there. Are the trees local, are they diverse, are they resistant to foreseeable environmental threats? What is the consequence for the underlying soil? These questions are incredibly important to ask, as healthy soil stores a lot of carbon. Local economies also may have an interest in a robust forest system, and we must consider how long it takes for these new trees to mature.
Climate scientists and activists have explained that in addition to reforestation (tree planting) and vast technological innovation, we first and foremost need to protect our old growth forests. We must not lose another inch of these if we can help it, for old growth forests are already here, and secondly, they help solve both of Earth’s environmental crises which are biodiversity loss (mass extinction), and climate change (too much carbon, resulting in heat).
This brings me to the other subject I heard about in the news recently. Many financial pundits and others have been discussing the volatile price of lumber, especially as it relates to inflation concerns. For those not familiar with the issue, lumber prices spiked almost 300% in recent months, and in mid June 2021, saw a sharp downturn of about 20%. The crypto community is of course no stranger to this kind of volatility. It’s fascinating stuff and certainly has real consequences for many industries, but in all of my research on this lumber story, something that’s been discussed for many months in the news, I’ve not heard one word about the climate crisis, the grave importance of trees, preserving our forests, or the carbon budget.
Every once in a while, when discussing the oil markets or something blatantly connected to climate, you’ll hear a mention of the term “ESG,” which stands for “environmental, social and governance.” This is an emerging sector or trend in finance which aims to invest money into businesses and markets that are greener and more equitable in general. It sounds good, but the ESG movement as a whole has sometimes been criticized as a woke, virtue-signalling, public relations-backed farce that allows for business to continue as usual.
While the climate and biodiversity crises continue to accelerate, we observe other social and political emergencies that need our attention. This includes things like wealth inequality, environmental racism, and a real testing of the strength of democracy around the world. There is no question that ESG is a vital component to how we organize our businesses, societies and capital in the coming decades. The question is whether the ESG movement is able to actually affect positive change or if it will succumb to corrupt pressures and basically fail as a true strategy for solving incredibly complex issues like, for instance, rapid decarbonization amidst a system of infinite-growth-centered capitalism.
Getting back to the disconnect between old growth forest preservation (or proforestation) and the discussion around lumber, it’s important that we start to connect these macroeconomic and multi-system events. We can’t just pretend that trees exist as a commodity, as a component to the stock market, and nothing else. Wildfire season is upon us again and the Western United States is bracing itself. How many trees will we lose this year? Is this not relevant to the discussion about both the cost and true value of trees?
We can’t think in these disconnected silos and hope to get anything done. We need to understand, as George Monbiot explains, that everything is based on ecology. Every business, every transaction, every product comes from Earth and depends on nature for its production. An obvious example of this is all the life saving medicines that come from coral reefs and rainforests. Pharmaceutical companies should be protecting these places aggressively, but I don’t see them saying or doing anything about climate. I hope that changes, given their huge capital influence and well documented ability to lobby Congress when they want to.
Our tendency to compartmentalize our thinking has drastically hindered our ability to understand how connected we all are to Earth. We cannot experience a fate that is separate from nature. It’s not possible, unless we depart from Earth entirely and focus on terraforming other planets. This is an exciting prospect, and probably an inevitable one, but once the first humans actually live on other planets, I suspect that they will start to realize what a gift Earth really is. Its water, air, sunshine, plants, animals and so forth all create the singular known oasis in the darkness of space, and we are killing it.
There is nothing wrong with financial literacy, financial planning, understanding business and economics, or experiencing financial success. But even in the financial sector, there is very little discussion of how climate will impact long term investments and the health of our financial markets. Millennials and younger generations will at least partially rely on these markets for retirement. Is it fair that these systems may become unstable in our lifetimes? Why don’t financial pundits talk about this? Don’t these people try to hedge against risk and volatility? Is that not their job?
Fidelity joined a group of financial companies holding more than $40 trillion dollars in assets in writing a letter urging governments around the world to take bolder action on climate and to disclose climate risk in investing more honestly. This is important, but I fear that this action could become the next version of a “terms and conditions” agreement with hundreds of pages of fine print that no human being would ever read.
It’s important to disclose financial risk, or exposure, to climate chaos. I’m glad that these huge asset managers are demanding that, and that they understand what type of havoc can come from ignoring the science. Still, I see very little discussion about these concerns, and very few outlets even reported on this historic letter.
Bloomberg reported on the letter in their “Bloomberg Green” section, but made it available to subscribers only. I’m not sure if it made it to the home page, and that’s just the issue. We relegate incredibly important news about the future of our planet to sections of the paper where people who are interested in “green energy” or “ESG” will see them. That’s very foolish because even though climate news is more frequently sought out by certain groups of people, it affects everyone and everyone should know what’s going on. Somehow the survival of the planet itself has become its own niche category in media, like sports or tabloids.
We have not figured out how to report on financial news within its inextricably linked ecological context, we have not figured out how to educate the general public on the huge financial risks (double the cost of COVID per year, according to The Guardian) that the climate crisis poses, and we also have not figured out how to teach people to invest, to use their own capital, in a way that actually supports equitable decarbonization efforts. All we’ve seen in general are surface-level discussions about ESG, which often lack any measurable actions or goals. This is unacceptable.
Climate targets laid out in the G7 summit and in other meetings often don’t contain short term, substantive plans, either. They are filled with ambitious, long-term promises but don’t back up those promises with step by step benchmarks or achievable, understandable drawdown strategies. We need to plug in the Christmas lights of logic, and connect our sectors, our efforts and our prospects together.
We now have emitted so much carbon that humans have never lived before in an atmosphere of this composition. Before you say that’s not a problem, let’s wait for the subsequent heat and all related feedback loops to play out. That could take decades, even if emissions went to 0 today, which they’re not. Prospects regarding nature are very, very bad. To my knowledge there isn’t a single natural environment or place that has a good prognosis. That should alarm you.
Here’s a quote from a 2020 report published by Forbes. “The last time the atmospheric carbon dioxide was this high, sea level was 50 to 80 feet higher than it is today and 3.6°–5.4°F warmer than pre-industrial temperatures. There is a delay in the physical response of a forced increase in carbon dioxide to temperature and sea level, meaning this acts as a benchmark for where we are likely headed into the future.” Read my previous blogs for more context.
So there you have it. We can no longer pretend that lumber prices don’t have anything to do with the Amazon Rainforest, or that the economy has nothing to do with extinction. We have to remember that we live on Earth. It’s 2021. We really shouldn’t be cutting down any more trees anyway. As I’ve said before, our planet is not an app, a website, an algorithm, a video game or a television show. It’s a rock covered in miraculous life, traveling through space, and it needs our help. We need our help.