How climate change became a burning issue
Dire warnings about the effects of global warming should be taken seriously. Yet, while some books on the subject make pertinent points, others fail to convince. By Fiona Harvey
It is a story worthy of Greek drama. Humanity discovers the secret elixir that will bring us prosperity on an unimagined scale, enabling the construction of fabulous cities, travel faster than the speed of sound, communications at the speed of light and the means to bring forth bounty from barren land. But just as we raise ourselves to these god-like levels, we discover that the potion is poisoned. By drinking it, we are upsetting the natural workings of the world in a way that will soon destroy the very basis of our civilisation.
There is one small voice of hope, however. We have discovered the secret just in time -and we possess both the knowledge and the power to neutralise the poison and make all well. All that is needed is for the world's peoples to put aside their differences and work together for a common goal. In this devilish test set by the scheming gods, can we pull through? Can we make it?
What a subject it would have made for Aeschylus or Sophocles. Instead, we have a collection of lesser artists and thinkers who struggle to connect our dependence on oil, gas and coal with the coming catastrophe of climate change that threatens to reduce our wondrous creations to rubble.
In the past few months a slew of books has been published detailing the science of climate change, the effects of climate change, the problems caused by climate change, and the solutions to climate change. They have been accompanied by a series of works on "the end of the world", loosely tied to the ecological disaster we are building up to. The parallel enthusiasm for books on "peak oil" - the theory that the world's fossil fuel resources have begun to run out or will soon do so -ranges from the learned to the crazed. A smattering of business books also promises to help entrepreneurs take advantage of all these trends - well, someone must stand to gain out of the end of everything.
Cataclysm has never been far away from the thoughts of mortals, as Simon Pearson recounts in A Brief History of The End of the World. This is an entertaining, though superficial, romp through "end-time myths" from the Flood through the early Christian mystics to the visions of nuclear Armageddon that invaded our nightmares last century. Pearson marshals a convincing
A BRIEF HISTORY OF THE END OF THE WORLD: Apocalyptic Beliefs from Revelation to UFO Cults by Simon Pearson Robinson ?8.99, 320 pages
THE LAST GENERATION: How Nature Will Take Her Revenge for Climate Change by Fred Pearce Eden Project Books ?12.99 352 pages AN INCONVENIENT TRUTH: The Planetary Emergency of Global Warming and What We Can Do About It by Al Gore Bloomsbury ?14.99. 336 pages
THE NORTH POLE WAS HERE: One Man's Exploration of the Top of the World by Andrew Revkin
Kingfisher Publications ?9.99 128 pages
breadth of examples to show how pervasive this idea is, with some brief thoughts on why it may be such a deep-seated psychological need.
He brings the history of doom merchantry up to date with an account of the apocalyptic overtones of George W. Bush's "war on terror", which, the author seems to think, is a more likely source of destruction than global warming.
The crucial difference between global warming and the older myths of destruction is the "emphasis on human instrumentality". Contrasting the scientific consensus with the religious views of the current president of the US, Pearson notes: "There will be no Noah's ark to save us from rising sea levels, no pre-tribulation Rapture which will spare us the worst of the environmental catastrophe, no divine intervention to replace the old earth with a new one... it is governments and ordinary people who must act and act now. Only then can disaster be averted and the planet saved."
For all its death and destruction, Pearson's short book is a cheery read, mainly thanks to his determinedly jolly tone.
But a more apocalyptic cover could scarcely have been devised for Fred Pearce's latest work on environmental disaster. With a dark red brooding shot of the New York skyline under a glowering sky about to be engulfed by flames, and embossed lettering melting on to the page, The Last Generation looks like a typical thriller. It will come as quite a shock for people who pick this up in airport departure lounges to find it is not a page-turning whodunnit, but a passionately argued scientific treatise on "how nature will take her revenge for climate change".
Pearce is a well-respected environmental journalist, a former news editor at the New Scientist and currently its environment consultant. He has an encyclopedic knowledge of current and past scientific thought on climate change, and his book is as thoroughly researched and tightly argued as his qualifications would suggest.
For those who already know something of climate change, this book provides depth and breadth of detail, such as a discussion of whether the tropics or the poles are more important in driving the earth's climate. But even those with no previous knowledge of the subject will find it easy to keep up Pearce orders his arguments intelligently, and presents them in terms the lay reader should easily digest (he particularly relishes the term "megafart", used to describe a great outpouring of methane from the ocean 55 million years ago).
The premise is simple. In the two decades or so since climate change began to be taken seriously, it has been regarded as something that would happen slowly and gradually. A steady 2 JTmagazine September 23/24 2006
rise in temperatures would end up melting the poles and raising sea levels in 60 to 100 years or so. Wrong, says Pearce. The earth's complex systems of climate, ocean circulation, weather systems and chemical reactions are not so lightly defied. They are extremely sensitive to even slight changes.
The complacent like to quote the 0.6°C rise in temperatures that has taken place since the Industrial Revolution, taking it as proof that we can cope with more warming. Pearce argues that even minor meddling with the climate will have dire results, which will bear down upon us as soon as the next decade or so rather than comfortably ambling up in a century's time. The Last Generation of the title is us, we who are adults today.
Climate changes have never happened gradually in the past, Pearce says, but in wild swings and lurches from ice age to warmth. There is no reason to suppose human-wrought climate change will be any different, so prepare for a bumpy ride. Pearce quotes one expert who compares the earth to a drunk - stable while sleeping but if woken given to random violence. We are new poking the drunk with a stick, he warns. Pearce piles theories and evidence to show that we are in danger of pushing the world through various tipping points of temperature and greenhouse-gas concentration. These make runaway climate change with devastating consequences all but inevitable, he says, from inundation to desertification, including the failure of the Asian monsoon and the transformation of the Amazon to a desert - even if we stopped burning fossil fuels immediately, we may already have passed the point of no return.
But this relentless roll call of disaster engenders a certain resistance in the reader, a bit like the resistance that most of us feel towards doomsday cults. The science should indeed alarm us, but Pearce seems in danger of losing the reader by his insistence on the most extreme interpretations and scenarios. Reading it feels like being bludgeoned slowly into agreement.
Compounding this problem, Pearce is badly let down by his publishers, who have omitted to include any graphical material save one lone diagram. It's a shame, as illustrations would make it easier to explain some of his more complex arguments and keep track of the confusing range of data we are expected to remember.
No such criticism can be made of Al Gore's book, An Inconvenient Truth. Here, no graph is left unplotted, no map unreproduced, and no illustration is too insignificant to be excluded. The text suffers badly as a result, squeezed in dribbles and chunks in various fonts and point sizes into the few spaces available after yet another hurricane picture has been put in.
Do not think about trying to read this book in one go. Leave it around your house to show that you care - you may even dip into it from time to time. Read a few nuggets and look at a few pictures (the disappearing glaciers are the best) while One expert compares the earth to a drunk - stable while sleeping but given to random violence if woken you wait for Armageddon. To be fair, the book accompanies the film of the same name. It will make more sense to someone who has seen the film, which is surprisingly good and a more gripping viewing experience than the thought of almost two hours spent at a slide show given by a politician might suggest.
Wherever arguments about climate change are rehearsed, children cannot be far behind. Every "green" at some point appeals to our sense of obligation towards the younger generation to spur us into action on greenhouse gases. And now, finally, children have their own climate change book so they can see for themselves the horrible things that are going to happen to them - and for which their parents are mostly to blame.
The North Pole Was Here was written for children but can also be enjoyed by adults. Part adventure story and part science book, it is an engaging account of Andrew Revkin's visit to the top of the world as part of an expedition investigating global warming. Mixed in are some of his reports (some rather simplified) on climate change from The New York
Times, where he is --.^cm reporter. The earth's poles have warmed several times faster than other regions, and it is here that the most dramatic effects of climate change can be seen. Readable without being patronising, the book explains the key concepts behind climate change through the polar lens, and describes the history of Arctic exploration from the 19th century to the present.
Most readers will want little to do with The Chaos Point by Brvin Laszlo (Piatkus, ?9.99). Presenting us with a choice -"breakdown or breakthrough" -to be made within the next decade, the book posits that the end of the world will come through a combination of our greed, environmental degradation, terrorism and smoking.
Dotted with facile fables and warmed-over platitudes, the book suggests meditation and "an altered state of consciousness" as part of the answer to keeping the world turning. Reading it certainly had me reaching for the means to an altered state of consciousness, but not through meditation.
The business reader may have more luck with Daniel C. Esty and Andrew S. Winston's Green to Gold (Yale University Press, $25), a manual on how to turn your company into an eco-success, catching the current wave of consumer and government interest in saving the world from environmental catastrophe.
The prospect of Armageddon is one that is revived by every generation, recreating its fears in its own image, a process that springs partly from the same impulse that makes us scare ourselves with ghost stories. This does not mean disaster will not happen, however, and there is no shortage of current candidates - I prefer climate change, but you may choose bird flu or terrorism. But books about Armageddon tend towards the breathlessly portentous or the bludgeoningly boring. I suppose it was too much to ask for the end of the world to be fun.
Fiona Harvey is the FT's environment correspondent.
To buy any of the books reviewed in this issue, at 20 per cent discount plus p&p, call the FT ordering service on 0870 429 5884 or go to www.ft.com/bookshop
September 23/24 2006 FT magazine 43
With shares in almost 1,000 companies, Karl-Walter Freitag is a flamboyant investor-activist, using German law to influence and even control corporate management. By Patrick Jenkins
Of the 15 or so cars in his collection, including a red Ferrari, Karl-Walter Freitag has picked out a diminutive 1950s Fiat 600 Jolly to drive to lunch with the FT in Cologne. He arrives late, parking it with a flourish in the middle of a roundabout opposite Casa di Biase, the Italian restaurant he has suggested for our meeting. Enter the Robin Hood of German capitalism or the nation's most infamous extortionist - Freitag has been called both.
In a country where big institutional shareholders are only just starting to use activist techniques to manipulate company managements. Freitag is the best known of the few dozen small investors who have long taken advantage of the fine-print of German law to force large and small companies alike to pay them millions of euros.
Most companies see them as bounty hunters. But the fact that another high-profile activist is a prominent academic -rrufcssor Ekkeharcl Wenger of Wilrzburg University lends credibility to their version of events: that they are simply maligned investors fighting for their rights.
Now in his 50s. with more than 30 years of activism behind him. Freitag is loath to talk about both his personal fortune and the size and value of his private investment company, Metropol. But he is widely reckoned to be a millionaire many times over. And it shows. From the cars to the clothes he sports to our lunch (bold cream trousers and a loud-striped shirt), he exudes a natural, if dated, chic.
The waiters at the otherwise deserted Casa di Biase. a few streets away from his city-centre office, are soon fawning over their flashiest regular, suggesting the loin of lamb and spaghetti with fresh pesto. He ignores their specials and the menu, and instead commands a platter of charcutcrie for himself and some seared vegetables for me.
Settled on the restaurant's terrace like a prince in his palace. Freitag dismisses my attempts to classify his investment tactics as neatly as his look. He is neither hero nor villain, he insists, just a good investor.
A quick run through his portfolio throws up scant evidence of obviously good investment. How, you wonder, can this man have made his fortune from such a blithe amalgam of shareholdings? Spurning stock-picking, Freitag owns seemingly indiscriminate stakes in the majority of listed German companies, both big and small. "1 own shares in close to 1,000 companies," he says. He never "short-sells" a stock as a means to profit from a downward-trending share price. And he has only one, wise, criterion for shunning a company: "I have never invested in something I don't understand. So I avoided the dotcom boom and bust."
The trick, though, lies not in buying the right stock in the first place, but in employing the right methods after he has invested.
As we tuck into our main courses - vitello tonnato for him, that pasta and pesto for me - Freitag explains that he and others like him use (critics say abuse) two main areas of German shareholder law to turn corporate activity or proposals to their own personal advantage.
The most popular avenue is the Spruchstellenverfahren, or claim for compensation, frequently used when a company is bought and then small shareholders are squeezed out.
Freitag estimates that he makes about 50 such claims a year. "I have a 95 per cent success rate," he says. One typical example was triggered when Munich Re, the reinsurance group, bought out its partially owned subsidiary Hamburg-Mannheimer a few years ago. In 2004, after holding out for two years, Freitag and a few other activist investors at Hamburg-Mannheimer secured ?1,300 a share for their outstanding stock, more than double the amount offered under the terms of Munich Re's original squeeze-out proposal.
Such a loophole is not unique to Germany but it is here that lawyers believe it is most exploited - particularly by cunning local private investors and, increasingly, by foreign hedge funds.
Activists' use of the more serious Anfechtungsklage, or legal blocking of a corporate proposal, is more controversial, since under German law a single investor can use
Casa di Biase, Cologne
1 x seared vegetables 1 x charcuterie platter 1 x pasta with pesto
1 x vitello tonnato
2 x grappa sorbet 1 x mint tea 1 x espresso
the manoeuvre to delay a move such as a plea for fresh capital, even if it has been approved by a shareholders' general meeting - and potentially hold a company to ransom in the process.
Just such a tactic was used recently when a crucial attempt by troubled department store group KarstadtQuelle to raise ?500m of fresh equity was blocked by Freitag and a handful of other small shareholders.
Company lawyers claim there are countless examples of small investors filing these kinds of complaints. Each one triggers a time-consuming judicial review of the company's proposal, during which time unscrupulous investors may demand money to go away and allow the transaction to proceed. Lawyers admit there is little proof of such allegations since companies are as reluctant as shareholders to be seen to be involved in a bribery racket. Payments are in any case typically disguised as "legal fees", lawyers say.
Freitag distances himself from such activity. Just once did he overstep the law, he says. Back in 1987 when investment group AMB, now part of the General! insurance empire, bought Bank fur Gemeinwirtschaft, he withdrew his objection to the buyout only after being paid DM1.5m. He was later taken to court, fined DM50,000 and accused by the judge of operating in a "grey area between cunning and criminality".
It is probably the memory of the AMB incident that has made Freitag such a hate figure in corporate Germany. He still reckons he makes "about 20" Anfechtungsklagen in a typical year. But he insists: "I have never breached the rules since AMB."
Furthermore, he argues, all his legal challenges are well founded and never constitute the spurious delaying tactics that his critics accuse him of. "Put it this way," he quips. "I don't file a complaint because too few of a company's board members sport beards."
In the case of KarstadtQuelle. for instance, he says he was merely defending himself and other small shareholders against an attempt by the dominant shareholder, the Schickedanz family, to overprice the rights issue. "Accusations of extortion are lies and more lies," he rails. "The only thing I extracted from Karstadt during our dispute meetings was three bread rolls and five cups of coffee."
So is the Robin Hood label right, then? No, says Freitag: "The capital markets are a selfish place, with no room for Robin Hoods or Mother Teresas."
From the start, his motivation was a desire to make money. As we clean our palates with a grappa sorbet, Freitag tells the tale of his self-made beginnings. He began trading shares at the age of 16, when relatives gave him DM3,000. He never had any parental guidance - "I think the highest-risk investment my parents ever had was a building society account" - but was inspired by hearing of speculative opportunities in obscure colonial trading companies.
Through "over-the-counter" trades in Hamburg and Berlin, he bought into Deutsch-Ostafrikanische Gesellschaft in modern-day Tanzania, Schantung Handelgesellschaft in northern China and Cameroon's national railway operator - and turned his initial outlay into a "six-figure sum" within a couple of years.
Aside from a brief venture into industry (he long held the patent for an elastic fibre used in babies' nappies), he has earned his money ever since by going after companies as aggressively as the law allows.
But he does claim a degree of moral impetus all the same. "Company bosses accuse me of greed," he says, impassioned now. "But German managers have been infected with the pest of a US remuneration system. It was former Daimler-Chrysler chief executive Jiirgen Schrempp who brought it here."
He also takes a swipe at Germany's "old boys' network" that has helped to underpin the so-called Deutschland AG structure of cross-shareholdings and mutual support, often at the expense of shareholder value: "Whenever I act against a company, it's always in the interest of all shareholders."
But he refuses to line up with many of the foreign investors - notably private-equity firms and hedge funds - that have flooded into Germany. "They're just playing an easy game of asset stripping," he says.
As if to take the ethical high ground, Freitag tells me of his modest lifestyle. Besides the classic cars and a home full of iconic design objects from the 1960s, he has few other extravagances. "I sleep on a tatami Japanese straw mat in a 30-square-metre room beneath my office on the 42nd floor of a Cologne tower block," he says, claiming to have no holiday homes, either, and no time to take a break from the corporate research that underpins his investment activities. "Occasionally I spend the week-•^ end with my files on a 30-year-old 10m . \ steel boat, moored in Potsdam."
But whatever Freitag's quirks, and the moral legitimacy of his methods, the golden era of his brand of shareholder activism may be over, according to lawyers. The so-called ; UMAG law, which modernises the / rules on "corporate integrity" and on disputes between shareholders and companies, came into force late last year, blunting the powers of rebels. For one thing, it stops latecomer shareholders from capitalising on a company's difficulties. In the past, opportunistic \ investors have bought small sharehold-•