Que mas?

Last month I shared my picks for the top sustainability stories of 2012; I also reflected on the predictions I made at the beginning of last year, summarizing what happened on the items that I saw, and adding a number of other items that I had missed.

Here are my picks for the top sustainability stories on the horizon for 2013.

Defense drives
The U.S. Department of Defense is emerging as a major driver of sustainability initiatives in the U.S., driven by a very steely-eyed assessment of national security considerations.

In September, Defense Secretary Leon Panetta said that military reliance on fossil fuels creates significant risks and costs on both tactical and strategic levels. The Defense Department (DoD) is looking at the impact both on military capacity — measured in dollars, mission effectiveness and lives — but also the impact on the national security of the country and the vulnerability of the country to unreliable fossil fuel supplies and climate disruption.

As a result, DoD has been a major player in the new energy economy, both as investor and as market maker. How important is this? Well, the past few times they tried it, we got transistors, the semiconductor industry and the internet.

The realism at DoD stands in stark contrast to the ideological blinders at the House of Representatives, where some conservatives have slammed DoD for investing in biofuels, renewables and energy efficiency. Though long seen as knee-jerk advocates for military spending, they act as though blind to the $400 a gallon to move diesel fuel to troops “in theater,” and to the harsh but real DoD’s key performance metrics: the number of lives list per thousand gallons of diesel delivered.

I’m betting that realism will trump ideology — at least here.

Fossils dig in
In other surprising institutional news, the International Energy Administration — which has been a major international source for the fossil fuel industry since it was formed in the early 1970s — reported that in order for there to be a sliver of a chance with keeping climate change less than two degrees Celsius, two-thirds of the global reserves of fossil fuels ― two-thirds of everything that we know exists under Saudi Arabia and the United States, under China ― has to be left in the ground not to blow out the climate.

This is a staggering finding, both because of the scale of it and because the real challenge it raises. The fossil fuel industry will of course fight to the death to prevent that from happening; how often do you hear of companies walking away from assets?

Yet every other indicator on the planet, from climate issues to national security to the cost of specific disruptions, argues in favor of willfully and intentionally stranding those assets. Even if that point of view were to prevail, the mechanics of how to make it feasible for a massive global industry to walk away from assets is not clear challenge.

A few years ago, I constructed a thought experiment: If your company had a division that ate cash annual equivalent to four times its actual value, what would you do? Both business people and environmentalists give the same answer, unhesitatingly: You shut it down. You take the loss. To put it another way, for the annual public subsidy to the coal industry, we could shutter the industry, remediate the mines, redevelop the communities, retrain the workers, invest in renewables and have change back on our dollar.

That would be rational. But the world isn’t rational, nor is economics. Unless someone can orchestrate a buyout or pay to not have the resources exploited (as we’ve seen to some degree in the utility industry), this will play out as a clash not of ideas, but of powerful interests: national, international and biological interests on one hand and the fossil fuel industry interests on another level. We’ve seen a prefiguring in California’s Prop 23 in 2010, where significant business interests lined up against the fossil industry in support of the state’s world-leading climate policy, and, as noted above, we may have a powerful new ally in the Defense Department. But in the end, it will not be governments or activists alone that drive this. It will be Wall Street.

Read more: Climate culture shock