Why ContraCarbon?

I am not against Carbon per se. Let’s understand that Carbon is important to survival on this planet. It is the fourth most present element in the universe exceeded by hydrogen, helium and oxygen. It is present in all Earth life forms and constitutes about 19% of the human body only surpassed by oxygen.  There is essentially a fixed amount of it on Earth, and it is being converted from one form to another continually as part of what is known as the Carbon Cycle. If you really want to know more about Carbon, Wikipedia currently has 16 pages on the topic of which two are References for those nuts who don’t get enough out of the first 14.  http://en.wikipedia.org/wiki/Carbon

My primary problem is with the incremental change in the Carbon cycle that has been caused by man in one way or another. The poster-child for this change is the increasing amount of CO2 that is being put into the atmosphere.  The primary source of this incremental CO2 is the combination of Carbon, in various chemical forms, with oxygen–typically as a fuel source for transportation, power or chemical transformation.   A secondary problem is the lack of self-sufficiency, nation by nation, of the Carbon,  primarily in a liquid or gaseous form, that will be our main fuel and chemical source for some time .  We ultimately have to become less reliant on Carbon or figure out some way to restore the Carbon cycle to the point where we aren’t putting excess CO2 into the atmosphere.

I don’t plan on spending a lot of time on whether we are experiencing global warming.  In fact, I much prefer to view the problem as one of anthropogenic (man-made) Climate Change. I will comment on the impact and pace of Climate Change on our lives and what we can do about it. I will also try to point readers to other sources for those who want more detail on a particular point made. I came at this topic as critically important to the planet via investing.  While Chief Investment Officer at Neuberger Berman–a role from which I retired in 2008–I created a small unit to do research on paradigmatic issues–paradigm shifts that, if one got them right, could change the risk profile of investments related to the shifts.  The truth is, the traditional role of CIO at Neuberger didn’t really exist. Neuberger consists of several very experienced and successful investment management teams, doing extensive bottoms-up research on specific investment ideas . The last thing they need is someone else telling them what to do.  My primary job was not to screw things up.  What I discovered, though, is that the bottoms-up work actually led to concentrated investing around specific macro themes. I felt that if I could verify or support those themes–those paradigmatic ideas–it would point out and possibly reduce the risks of the investments that were being made.  Thus, the small paradigmatic unit was created.  The work started with Energy demand and supply. That quickly morphed into research on China and India, the major new incremental users of energy as they became part of the global economy.  The work on all three topics naturally morphed into the issue of Climate Change. 

While the initial reason for all this research related to investment opportunities, it was apparent that Climate Change had significantly broader implications for the planet, and, more specifically, for my grandchildren.  Over the last four years I have devoted significant energy (if you will pardon the term) to the topic, on the investment  and the policy front. I have spoken to many groups on Climate Change. I have also been involved with a small group at the UN (UNEP)  focusing on Private Capital and Climate Change.  I don’t believe that the technological solutions to restoring a balanced Carbon cycle have all been determined nor have certain potential solutions been implemented. I believe it is true that conservation could go a long way to solving the problem, but, unless the price of Carbon rises significantly and becomes much less volatile, conservation will be a marginal contributor to the solution.

I am interested in all ideas that can contribute to solutions. I am not interested in a shouting match on whether there is a Climate Change problem.  There is definitely a problem of too much CO2 going into our atmosphere.  Facts and data go a long way to having a healthy and useful dialogue on the issue of Climate Change and the solutions to the CO2 (and equivalent pollutants) problems.  This first posting is pretty basic.  We can get more esoteric as time passes. We can also have some fun as well discussing this serious problem and related problems. And, maybe, we can add something to the debates and the solutions that are useful and profitable.  Let the games begin.


This entry was posted in Climate Change, General Interest by Jack Rivkin. Bookmark the permalink.

About Jack Rivkin

Jack Rivkin retired in 2008 as EVP, CIO, Head of Private Asset Management of Neuberger Berman(NB) and from NB's Executive Management Committee. He was also on the Lehman(LB) Council on Climate Change(CC) and the NB CC Fund Advisory Board. He has been engaged with the United Nations and other entities on policy issues related to Private Capital and CC. He is an Associate Fellow of the Asia Society. He has continued on the NB Mutual Fund Board and with his CC responsibilities. He began his investment career in 68 as an analyst at Mitchell Hutchins(MH), and became Director of Research(DOR) there. After Paine Webber(PW) acquired MH, he served as DOR; CFO of PW; CEO of PWMH-the equity trading and investment arm of PW; Chmn of MH Asset Management and President of PW Capital. 87-92 he was DOR and, subsequently, Head of the Worldwide Equities Division of LB. 93-95, he served as a Vice Chairman and DOR at Smith Barney (now Citigroup). He was an EVP with Citigroup Investments 94-01, responsible for private equity investments. He was also an adjunct professor at Columbia University teaching a course in Security Analysis. He joined NB in 2002. He is the co-author of “Risk & Reward—Venture Capital and the Making of America’s Great Industries,” Random House, 1987. He is a regular guest on various media. He is the principal subject in a series of Harvard Business School cases describing his experience as DOR and Equity Head at LB. He has served as a director of a number of private companies and the NYSSA. He is currently a director of Idealab, Dale Carnegie, Operative, World Policy Institute and other private companies. He is a member of the Economic Club of NY, the Anglers Club, Theodore Gordon Fly Fishers, and a lifetime member of Trout Unlimited. He continues to be an active private equity investor when he isn’t fly fishing. Mr. Rivkin earned his Professional Engineering degree from the Colorado School of Mines and his MBA from the Harvard Business School

8 thoughts on “Why ContraCarbon?

  1. Well done. Interesting and somewhat provocative. There has to be more discussion in this area, particularly with the decline in incentive the dramatic decline in energy prices. Thanks for adding to the pool of knowledge and discussion.

  2. Jack – this reads well and I like the style. I can see I will find this both interesting and informative. But I did not find it provocative! Perhaps this is just coming at this issue from a European perspective.

  3. Jack:

    Congratulations for launching Contra Carbon!

    I look forward to following your thoughts. I’m particularly interested in what call-to-actions you’ll suggest for the new administration, for individual citizens, and for investors. The anthropogenic problem runs so deep. With oil prices in the 40s, and the economic collapse so deep– do you think that we can keep the heat on these issues (pun intended)?

    Best,

    Cliff

  4. This looks very promising. You seem to know your science and to have an open minded approach.

    I am also retired. My website has an article on home energy conservation with a list of 156 conservation measures organized by cost and benefit. This article will also appear in Solar Today magazine. Please feel free to refer to it or link to it. http://energyperspective.blogspot.com/

    Bob Barbera told me about your website.

    Best regards,
    Doug Korty

  5. Jack:
    I like your down-to-earth, no-punches-pulled writing style and your promise to let others argue about the fact of climate, while you focus on the practical and fixable. You effectively establish your credibility via your Neuberger history (and of course, I wonder, if we are going to get any investment ideas along the way?!?). Are you planning to post past speeches and any new ones you may deliver? This has tremendous promise: to deliver lots of information and insight in a cogent, readable way.
    I am looking forward to the next installment already! Good luck, Jack.

  6. Jack,

    Congrats on this blog. Your no-nonsense style and unique perspective bring a welcome breath of fresh air (no pun intended) to this debate. I will use it as a solid source of information and ideas. I hope the folks in Washington become avid readers of your blog – they could use an injection of common sense and creative thinking.

    Andy Bergin

  7. Pingback: Neuberger Berman Chief Investment Officer on Climate Change | Big Winner

  8. Jack,

    Memo to President Obama – HIRE JACK!!!

    Everytime I read your blog I hear a clarion call that the U.S. is going to get our clock cleaned on green technology by China and the rest of the world. I know President Obama has gone further on this issue than his predecessors but I still don’t hear the compelling economic argument for green technology across the spectrum in the U.S. that I hear in your blog. We not only could lose a leadership role, we might be down the list behind several other countries and consume green technology the way we consume oil. Can you imagine the hue and cry if you ever heard a politician saying “in this election year of 2032 we must pledge to reduce our over-dependence on foreign wind turbines, solar panels and electric cars”. We’d all want to hang ourselves for our stupidity. Keep writing Jack till they start listening.

    Andy (author of Owning Your Stage on Google)

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