Doing the Math with $250K

Doing the Math with $250K

(Earlier this month, KC Golden of Climate Solutions was awarded a prestigious Heinz Award for his work. So, we asked this Climate Access member to tell us what he has been up to and what he plans to do with his $250,000 prize; what follows is his reply.)

David Minkow (Climate Access editor) asked me a series of interesting questions about the Heinz Award and my work. One of my goals is to focus, so I’m only going to answer two of them here! 

“Do you have any ideas about how you will use the award?”
This, as it turns out, is the question that everyone really wants me to answer, and the one that makes me the antsiest!
First and foremost, let me say what almost anyone who reads this knows to be true: the Heinz Award is recognition for the work of a huge network of partners and friends, without whom I could have accomplished exactly bupkis.  I am so grateful and proud to have my contributions recognized this way.   But the credit belongs to the ecosystem of work.  It may sound trite but it is utterly true.  That’s the first thing that comes to mind when I think about what to do with the award.
The second thing that comes to mind is that the award is, shall we say, premature.  In this respect (and no other), it’s like Obama’s Nobel  —  a prospective award, given in hopes that we might rise to the occasion and do what’s right and necessary to win climate solutions at scale.  So I aim to use it in ways that justify that hope.
But, as generous as this award is, we’ve got a lot more money aligned against us in the fight for climate solutions.  So we need leverage.  Following Bills McKibben and Clinton, let’s “do the math.”
What if we used the award to buy coal and keep it in the ground?  If we could get BLM to sell to us at their going rate of about a buck a ton, we could buy 250,000 tons. Doesn’t sound like much compared to the 150 million tons per year that Big Coal wants to ship to Asia through Northwest ports, does it?  But work with me here. 
The Harvard School of Public Health estimated the total external costs of burning coal in the U.S. at about $175-$523 per ton.  (Lord, I miss Paul Epstein.)  So, assuming we can buy the coal for $1 a ton and keep it in the ground, we’d reap $43-130 million in avoided external costs for our $250,000 investment.  (I know, coal buyers could just burn other coal instead. Hang in there for a minute.) 
Now suppose Warren Buffet — attracted by this extremely favorable ROI — wanted a piece of the action.  Say instead of shipping coal to Asia on BNSF, he were to buy it and leave it in the ground using, say, 10% of his initial gift to the Gates Foundation, or $3.1 billion.  At a buck a ton, and using our Harvard School of Public Health range of external costs, that’d be $542 billion – $1.6 trillion in benefits.  Now there’s leverage.  (True, he wouldn’t actually get the money for his investors; the benefits would accrue to everyone.  That’s why we took it out of his philanthropic budget, rather than Berkshire-Hathaway.)
Ah, but what about “leakage”?  Even if Buffet and I buy up all that coal and leave it in the ground, coal buyers and burners could just find some other coal, right?  Well, not exactly.  As it turns out, opening up a mainline from the Powder River Basin to Asian markets would substantially increase net long-term coal consumption – primarily by sending long-term supply and price signals that would encourage continued expansion of long-lived, capital intensive coal burning infrastructure in Asia.
Still and all, though Buffet and I could bottle up a prodigious quantity of coal, there’s many multiples of that amount available (per McKibben’s terrifying math).
I guess we’d need to protect our investment with science-based limits on carbon pollution, so somebody couldn’t just burn other coal to displace the coal we locked down.   And, of course, if we did that, we wouldn’t really need to buy all that coal ourselves!  This could save us a lot of money!
Let’s see, how many beers could I buy for each of the necessary 60 votes in the Senate using the Heinz award?   A LOT.  But not nearly as much as the Koch Brothers’ posse, which will spend more than $400 million in this election cycle alone. 
Hmmm. They could buy 1800 beers for each one I could buy. I could offer to withhold $1 worth of donations to climate champions for every $1800 they withhold from climate deniers and Super PACs.   But they might not go for that. It’s much more expensive to convince voters that fossil fuel dependence is good and clean energy is bad than to convince them of the opposite. But probably not 1800 times as expensive.
So it’s a good thing Buffet is in on this deal with me. We just spent $3.1 billion of his hypothetical money keeping coal in the ground.  Now we’re offering a better deal:  he could outspend the Kochs by half, and still send $2.5 billion back to the Gates Foundation.  Would that be enough to take back a government that would deliver what Americans want: responsible limits on carbon pollution and confident leadership for climate solutions?
David also asked me what we need to do going forward to make climate a national priority.  We’re all struggling with that question.  We all have long, unsatisfying “answers” to it.  But I have a short one too:
We should look to the Lummi Nation.  Last week, in a ceremony of mythic significance for their future and ours, they refused to sell their treaty rights – their identity, their souls – to Peabody Coal and their enablers.  They stood proud against the proposed coal export terminal north of Bellingham, Washington.  This picture says more about what we need to do than all the words and numbers I can think of.
KC Golden is policy director of Climate Solutions.

Photo via (cc) Flickr user S.MiRK