Crude oil siphoned from pipelines to fuel the international cocaine trade is tearing oozing, toxic holes in the forests of western Colombia, Reuters reported.
In the forests, traffickers and paramilitaries brew homemade gasoline from oil stolen from pipelines, according to the outlet.
The illicit gasoline — brewed in clandestine refineries — is used to extract cocaine from coca leaves, a key early step in refining the drug.
Previous reports have suggested cocaine trafficking is responsible for at least a quarter of annual forest loss in some Central American countries.
As Colombia’s cocaine exports rise to record numbers, oil theft at two key pipelines has tripled over the past four years to nearly 3,500 barrels per day, Reuters reported.
Much of that stolen product goes to crude refineries in the jungle — which typically dump about two-thirds of the oil they receive into the ground, police told Reuters.
That poisons about a square mile around the refinery by clogging the tiny pores in the land that allow oxygen to reach the underground world of roots, ants and earthworms.
“The damage is extreme. The animals, the trees – everything is totally burned,” Col. Johan Pena, commander of a unit tracking oil thieves on the Ecuadorian border, told the outlet.
Welcome to Equilibrium, a newsletter that tracks the growing global battle over the future of sustainability. I’m Saul Elbein. Send tips and feedback. Subscribe here.
Today we’ll see why Tesla’s discounts this week crashed its stock price, followed by a warning from a leading regulator about the limits of sustainable investing. Plus: Cleaning your home’s air for less than $100.
Programming note: Equilibrium will be taking a break next week. Happy holidays!
Tesla rolls out discounts amid dropping stock price
Tesla stock continued to tumble this week amid the announcement it would offer discounts on its two top-selling models.
- The electric vehicle (EV) manufacturer’s stock has lost nearly 20 percent of its value this week alone.
- Tesla’s share price has fallen nearly 70 percent since the beginning of the year.
On Thursday, U.S. regulators said they would also investigate two more crashes involving Teslas that might have operated on automated driving systems.
Double discount: Tesla announced Wednesday it was doubling the discounts on any Model 3 or Model Y vehicles delivered before the end of the year.
- That meant a jump from $3,750 — announced Dec. 1 — to $7,500.
- The company also this month offered to throw in 10,000 miles of free high-speed charging.
What analysts are saying: The fact Tesla seems “to be cutting price to increase deliveries volumes doesn’t raise confidence,” Craig Irwin, a senior analyst at ROTH Capital Partners, told Reuters.
That’s a particular concern “at a time where we see increasing competition,” Roth added.
On Musk’s mind: Elon Musk said in a Twitter Spaces audio chat on Thursday that he expects “a serious recession” in 2023 that would cause consumers to defer major purchases.
Strategic concerns: Tesla’s discount decision represents a “troubling” example of prioritizing short-term appearances over long-term results, financial advice site MotleyFool reported.
- If Tesla waited until Jan. 1, 2023, new Treasury rules mean the government would offer its own $7,500 deal, as we reported.
- Instead, Tesla is footing the bill for that discount itself — when the government will offer it for free in a week.
Why?: “Tesla’s willingness to discount its EVs indicates that it’s more concerned with meeting Wall Street expectations on arbitrary quarter-end delivery volume than on getting an extra $7,500 for the same vehicle,” the MotleyFool wrote.
- The drop is another sign of trouble for the trailblazing electric vehicle company amid continuing fallout over its chief executive’s controversial takeover of Twitter.
- For his part, Musk is unapologetic: “I am not going to like sort of suppress my views just to boost the stock price,” he said on Twitter Spaces, according to Reuters.
Bad vibes: The doomsday risk for Tesla is that all the intangibles that helped make the brand feel cool and futuristic will evaporate — leaving the company to be traded as just another car company, according to Investor’s Business Daily.
Where’s the harm in that? If investors treated Tesla like they do Ford and General Motors — companies pouring billions into new EV supply chains — company shares could see even more significant drops, Business Daily reported.
Feds: ESG is not ‘get out of jail free’
Potential environmental, social or governance (ESG) benefits will not stop the Federal Trade Commission (FTC) from busting an illegal deal, agency head Lina Khan wrote on Wednesday in a Wall Street Journal op-ed.
- “Some in corporate America seem to think that the FTC won’t challenge an otherwise illegal deal if we approve of its ESG impact,” Khan wrote.
- “They are mistaken.”
Main target: antitrust — The FTC has just one mandate, Khan warned executives: avoid competition-crushing mergers.
- Its job is to ensure consumers have “meaningful choices” and entrepreneurs and workers “real opportunities,” she wrote.
- According to a 1963 Supreme Court decision, an illegal deal “is not saved because, on some ultimate reckoning of social or economic debits and credits, it may be deemed beneficial.”
A GOOD YEAR FOR ESG — BUT SCRUTINY IS INCREASING
While the Russian invasion of Ukraine spiked fossil fuel consumption, 2022 marks a banner year in the rollout of ESG business, Reuters reported.
Three highlights: Renewables have become the cheapest form of new energy, and national and international regulators rolled out new sustainable investment regulations and oversight tools, according to Reuters.
- The world is on track to put in more renewable energy by decade’s end than it had in the past 20 years.
- The Securities and Exchange Commission rolled out climate-related financial disclosure rules — joining regulators in the U.K., EU and Asia.
- The U.S. this year passed $370 billion in clean energy funding.
Risk and opportunity: The rapid rise of ESG means asset managers need to be proactive in figuring out the sustainability of their investments — before investors start asking, Bain Capital partner Debra McCoy wrote this week.
- Around 19 percent of utilities investors already have limits to the level of carbon emissions they are willing to finance, she noted.
- “Don’t take the risk of letting investors assess and act on your ESG outcomes before you do,” McCoy added.
On the horizon: Last month’s U.N. biodiversity summit in Montreal suggested that businesses would be well served to begin tracking their impacts on nature as a whole — not just carbon emissions, Eva Zabey, executive director of the corporate coalition Business for Nature, told Reuters.
- “Those not already assessing and disclosing their risks, impacts and dependencies, will need to get ready,” Zabey said.
- Regulators are realizing that “business as usual is economically short-sighted, will destroy value over the long term, and will no longer be accepted,” she added.
All a buzzword? But while ESG and sustainable investment are popular concepts that can be spun into lucrative investment products, there is still a big difference between marketing and reality, business professor Hans Taparia of New York University told the New York Times.
- “Real change with respect to E.S.G. would mean a drop in profits for many corporations,” Taparia said.
- That is “why we are witnessing something between infinitesimal change and greenwashing,” Taparia said.
World Bank approves $500M green industry loan
Brazilians in the Amazon could soon find it easier to get paid to keep their forests standing under a new international lending program.
The World Bank announced on Thursday that it was loaning Brazil half a billion dollars to meet its climate goals and stand up new sustainable industries.
- The money will help set up a green lending program through Banco do Brasil, one of Latin America’s largest banks.
- It will also pay to help carbon-storing Brazilian companies sell their wares on international carbon markets.
Big promises: The World Bank estimated that the program would keep 90 million tons of carbon dioxide out of the atmosphere.
- It will do this in part by helping Banco do Brasil finance reliable carbon tracking technology and methods, Reuters reported.
- These are increasingly necessary to sell “high quality” credits on international voluntary markets.
Key position: Banco do Brasil is one of the biggest funders of Brazil’s farm sector, according to the World Bank.
That sector — particularly cattle ranching — is by far the biggest contributor to deforestation in the Amazon, according to environmental news site Mongabay.
BRIEFLY: A TOUGH ROAD TO ZERO DEFORESTATION
Brazil’s newly elected president Luiz Inácio Lula da Silva has promised to eliminate deforestation in the Amazon.
But the ongoing land rush on the fringes of Brazil’s vast forest makes fulfilling those promises a big challenge, The Associated Press reported.
In one western family of rubber tappers — traditionally dependent on intact forest — only one daughter wants to join that trade.
Her two sisters “want to cut down the forest, plant grass and run cattle.”
Clean your home’s air with this do-it-yourself filter
A cheap homemade filter is highly effective at purging indoor air of viruses and pollutants, a new study has found.
- The so-called Corsi-Rosenthal boxes cut concentrations of potentially dangerous forever chemicals and phthalates by up to 60 percent, according to the paper published on Friday in Environmental Science & Technology.
- The boxes can be built “quickly for about $100 per unit, with materials from the hardware store,” lead author Joseph Braun of Brown University said in a statement.
Paint me a picture: The boxes are a simple device that use a box fan to force air through a filter, trapping floating contaminants.
- The design the Brown team studied required four MERV-13 filters, a 20-inch box fan, a cardboard box and duct-tape to stick it all together.
- If you’re interested in building your own, check out this guide from the University of California College of Engineering.
Any downsides? Primarily noise — the devices increase ambient sound levels by
5 to 10 decibels, which could be enough to pose a distraction, the researchers noted.
Some context: Ten decibels is the volume of a person breathing nearby, according to a fact sheet from the nonprofit International Noise Awareness Day.
Friday Follow-ups
Catching up on stories from earlier in the week.
Air travel’s bad week gets worse
- A huge winter storm led to 2,600 airline cancellations on Thursday — in the midst of one of the year’s biggest travel weekends. The storm’s continued onslaught has left thousands of passengers stranded in airports this weekend as cancellations rose to 3,200 Friday morning — 500 at Chicago airports alone, our colleague Julia Shapero reported.
Hundreds of thousands face the freeze without heat
- Gusting winds from the winter storm reached 70 miles an hour as it blew across the East Coast — knocking down power lines and spreading blackouts, The Associated Press reported. As temperatures hung below freezing, 170,000 were without power in Maine; 130,000 in North Carolina; 120,000 in Virginia and 110,000 in New York, according to tracking site PowerOutage.us.
In budget bill, Democrats let nature down: advocacy group
- We reported on how the new $1.7 trillion omnibus bill secured a raise for the Environmental Protection Agency, and how it may have doomed the Atlantic right whale. Overall, Democrats blew their chance to find significant funding for the EPA, Fish and Wildlife Service, or a proposed $14 billion bill to help bring back America’s most at-risk wildlife, Stephanie Kurose of the Center for Biological Diversity argued in an op-ed for The Hill.
Please visit The Hill’s Sustainability section online for more and check out other newsletters here. Happy early New Year!