Introduction

n the first decade of the twenty-first century, an international

team of water scientists studying patterns of rainfall found
some troubling anomalies: The seasonal patterns of rain that
theyd measured for decades were swinging wildly from the norm.
The amounts of moisture in the atmosphere, along with where
and when it accumulates, were shifting dramatically. From several
vantage points on earth, the scientists saw an unraveling of the natural patterns of variation that had provided a century-old framework
for understanding rainfall. Where they once found predictable variation, they now found chaos.
The variations were on a scale never seen before. They were so
outside the realm of predictable fluctuationa realm known to
science as stationaritythat the researchers came to a profound
conclusion: Stationarity is Dead, they declared. Those three
words became the title of their pathbreaking article in 2008 for
Science. It was no longer safe to assume, they wrote, that natural systems [would] fluctuate within an unchanging envelope of
variability.1
In laymans terms, the past no longer offered clues to the future.
The man who came up with those telling three words is
Christopher Milly, a hydrologist who has spent close to thirty years
studying water with the US Geological Survey. He led a team that
included seven scientists from leading scientific institutions in four
countries. In demeanor, Milly is taciturn, thoughtful, analytic. But

x | The End of Stationarity

there was nothing restrained about the alarm he experienced upon

viewing the water data and thinking through its implications.
The concept of stationarity is as old as the scientific method itself,
rooted in the idea that new variables be tested against a baselinea
stationary moment in time. Such a baseline is critical to planning
for the future. For planners and urban designers who make multimillion-dollar decisions on how to ensure a steady supply of water
to cities, for farmers struggling to ensure reliable sources of water
for their crops, for the entire spectrum of insurance companies and
beverage companies, of wetlands protectors and dam builders, not to
mention all of us reliant on the earths most fundamental resource,
the findings amounted to pulling the rug out from under the past.
Milly recalled that when he was in graduate school, back in the
1980s, the principle of stationarity was so embedded in their work
that we barely had to think of it; it was built into the assumptions of
everything you did. Now he was upending that very concept. People
and planners need to consider the fact that the future is different from
the past, he said. Thats a revolutionary idea. Indeed, it was such a
discomfiting idea that the research paper in Science triggered animated
conversation and dispute in the scientific press, unleashing a barrage
of criticism, unease, praise, and requests for clarification.
Seven years later, in September 2015, Milly and his team provided
their response in the journal of the American Geophysical Union
(AGU), a group representing scientists who study the earth and
its terrestrial, atmospheric, and marine ecological systems. They
doubled down on their observations, offering further evidence that
in fact past patterns were no longer being replicated, and recommended that planners start to incorporate the enormous range of
uncertainty suggested by their research in planning for the future.2
We have always been cognizant of how great the range of
variability is when we study the earth and the atmosphere, Milly
commented when I interviewed him at the AGU conference in 2015.
Now climate change comes along and... the textbook examples
are no longer relevant to what weve been observing in nature.

Introduction | xi

uvWVU
The fraying thread that connects our past to our future is not limited
to the flux in the natural order. The ecological shake-up wrought by
climate change is also shaking up our economic and political order.
In the financial realm, as in the natural realm, the past provides
fewer and fewer clues to our future. Like the migration patterns of
songbirds that no longer correlate to the hatching patterns of their
insect prey, or the mountain snowpacks that no longer store water
for the dry summer months, the economy is facing miscues born of
the feedback loop between tumult in the atmosphere and tumult on
the earth. Rapid changes in the weather and temperature are outpacing our traditional ideas for assessing risk, redefining the calculus for
economic success, shaking up the geopolitical status quo.
In other words, the death of stationarity applies as much to our
economic and political realm as it does to our natural realm. They
are two sides of the same disrupted system, each redrawing the rules
of the other. We have entered the era of carbon shock, an era being
transformed, physically and financially, by the accelerating consequences of fossil fuels and by our slow but steady shift away from
them. This flux will continue to be a defining feature of the decades
ahead as we battle the ecological disruptions, social inequities, and
economic falsehoods that are at the core of our attachments to fossil
fuels. New uncertainties, risks, and possibilities lie ahead.
The climate summit in December 2015 was in many ways the
most significant gathering yet to signify our shift from the familiar
to the new. The meeting was an extraordinary international mix-up
of scientists, politicians, diplomats, activists, and journalists, jostling
and hustling through the drafty corridors in a former airfield, called
Le Bourget, outside Paris. All were focused on one elemental goal:
to regain our equilibrium before the unfolding forces in the atmosphere pass the point of no return. At one side event after another,
scientists reported on the accelerating speed of natural disruption, economists reported on the new economics of fossils versus

xii | The End of Stationarity

renewables, while negotiators hammered away at a new architecture

of international collaboration. Never before in the climate saga has
there been such simultaneity under one roofthe scientists informing the politicians and the politicians struggling to match the science
with the monumental task of dismantling the political and economic
superstructure built upon fossil fuels, while the activists reminded
everyone that whatever they did we were all running against a clock
ticking high up in the atmosphere that would not stop ticking.
As Hans Joachim Schellnhuber, one of the worlds premier climate
scientists and head of the Potsdam Institute for Climate Change
Research in Berlinwhich has been at the forefront of climate
research over several decadesobserved during one of those side
events: Were starting to move out of everything weve ever seen
before. It was one-tenth of a degree Celsius hotter in 2015 than it
was in 2014, which itself had set a heat record, just the latest uptick in
an unprecedented rate of increase over the past two decades. Each
degree, said Schellnhuber, impacts more vital organs of the planet.
You could say the same thing about the economic organs of the
planet. The financial consequences of climate change have until now
largely been hidden: In defiance of free-market principles, we have
not been accounting for the actual costs of fossil fuels. Just as an
optical illusion tricks the eye into seeing something thats not there,
traditional accounting diverts our attention from invisible costs; we
see only profits. Keeping these costs a mystery has been fundamental to our economic growth. Weve been keeping a false ledger, in
which the environmentally corrosive impacts of the energy that
companies, and the public, use to produce, distribute, and dispose
of everything from almonds to automobiles have been dramatically undercounted. The worlds three thousand biggest companies,
according to the United Nations Environment Program, cause
$2.15 trillion in annual environmental costscosts that are borne
by somebody other than those who create them. That somebody is
us. Economists call these externalized costscosts borne not by the
makers or users of a good, but by society.

Introduction | xiii

The amounts of money that climate change is costing usthe

externalized costs of coal, oil, and gas, the major contributors of
greenhouse gasesare vast. Unlike smog or smoke or other acute
contaminants, you cant necessarily see greenhouse gas pollution.
So the Danish Energy Agency helpfully constructed a huge yellow
balloon that states in bold black letters etched into the outline of a
globe: this is the size of one tonne co2. The balloon, which first
appeared during the 2009 climate talks in Copenhagen, is about
two stories high and a block widethe size of a hot-air balloon
and provides one of the few visual ways to comprehend what a ton
of CO2 actually looks like. You would need to release fifty billion
of those balloonsfilled with the gases generated primarily by oil
refineries, automobiles, airplanes, and coal-fired power plantsto
visualize the greenhouse gas emissions into the atmosphere of
just last year.
Those balloons full of CO2 might as well contain cash, depleted from
the worlds coffers with each new ton. Up go balloons full of money.
There are multiple ways to measure those costs in the form of responses
to extreme weather eventssuch as shoring up coastal barriers to sealevel risesalong with the public health responses to the new diseases,
in humans as well as crops and livestock, moving northward as the
climate warms. The costs of responding to extreme weather events
in 2015 in the United States alone amounted to $160 billion, Secretary
of State John Kerry told the assembled delegates at the Paris summit.
The price of food, predicts the US Department of Agriculture, will rise
as climate change disrupts food growing conditions across the United
States; there are similar stresses globally as stresses on the water supply
intensify.3 Over the past fifty years, concludes the US National Climate
Assessment, there have been an unprecedented number of heat waves,
severe droughts, and heavy rainsclimatic changes that it said are
primarily due to human activities.4
Chaos and uncertainty are the characteristics of the natural world
under the pressures being wrought by climate change. Everything
that was once status quoour supplies of food; our knowledge of

xiv | The End of Stationarity

which diseases impact whom, and where; our transportation planning and water delivery systemsis in flux.
That flux translates into risk, and if some companies do not yet
see this, their insurers certainly do. An insurance industry research
association has called for an entirely new paradigm for assessing risk,
because rapid-fire changes in weather and temperature are outpacing traditional actuarial calculations.5 Add to that the potential
disruption of production and supply chains, the reputational consequences of consumers and investors becoming more aware of the
environmental underside of their favorite products, and regulatory
moves by governments. The risks mount. Few of these looming
triggers, however, are required to be reported to potential investors,
though any one of them could seriously undermine the financial
value of companies reliant on fossil fuels.
Now the economic organs are responding. President Obamas
Council of Economic Advisers estimates that the costs of climate
change will increase 40 percent every decade that the current rate
of emissions is sustained. In 2015, the World Bank, the Bank of
England, major credit rating agencies, and banks began, for the first
time, to weigh the long-term risks of their fossil fuel investments.
Rating agencies such as Standard & Poors have begun demoting the
creditworthiness of oil companies, including Shell in 2015.6 At the
Paris talks, Obama made the first-ever call by an American president
to devise a price for fossil fuel energy that reflects actual externalized
costs. The G20, the umbrella group for the worlds richest countries,
has proclaimed a long-term goal of extricating the worlds major
economies from fossil fuels.
Such moves follow two decades during which negotiators have
attempted to redress the imbalance between who creates the risk
and who pays for it, to forge a price for carbon that reflects the vast
differences in responsibility for our situation and is also steep enough
to trigger a shift away from greenhouse-gas-producing energy. Cap
and tradea system by which major greenhouse gas emitters were
given emission caps, and could buy, or trade, allowances if they

Introduction | xv

emitted more than their allotmentwas the first effort to jumpstart a new way to value pollution. Polluters would pay for their
contribution to climate change up front by subjecting carbon to the
supply-and-demand forces of the market. This was a way of assigning monetary value to the earths shared atmosphere, declared the
United Nations, something that has been missing up to now.
First proposed by the United States in 1997 during the negotiations in Kyoto, Japan, this was also the preferred option of industries
that perceived it as the least expensive method for dealing with their
greenhouse gases. After the Bush administration withdrew the United
States from ratification of the Kyoto Protocol, the Europeans were left
to implement a program designed largely by Americans. The strategy
has had a troubled history, but one thing it clearly accomplished was
to create a new set of global fault lines between countries that have at
least a minimal price for carbon and those that do not and are subject
to few carbon constraints. Thus instead of one pricewhich had been
the intent in Kyotoweve now got wild variation, presenting challenges that climate negotiators have just begun to face head-on.
Meanwhile a green economy is taking shape amid all these
conflicting forces. The rules of the game are changing, investment
calculations are in play, and future energy scenarios are being rewritten. What are assets today could become liabilities tomorrow. The
concept of climate risk is entering the financial lexicon.

uvWVU
When it comes to risks, our brains are generally wired to see those
right in front of us; we perceive patterns of threat that spur the fightor-flight instinct. But the threat from climate change is of a different
orderoccurring in different forms, some dramatic and some subtle,
all over the earth simultaneously. Our risk management patterns
are still wired to search for lions in the Serengeti, commented Mark
Trexler, CEO of The Climatographers, a consulting firm advising
businesses on how to adapt to environmental risks. See lionrun.

xvi | The End of Stationarity

But lions in the desert are not the threat. The Serengeti itself, that
seat of human life that is a stand-in for the planet, is being transformed. The patterns we are now living through have never been
seen beforethey are the patterns, as Christopher Milly suggested
in his study of water, of departing from previous patterns. Now
those risks are starting to be recognized, and are rewriting the rules
of commerce and politics.
Climate change is opening our eyes to how interconnected we are;
it is also prompting widespread acknowledgment that there are limits
to the earths resources. How do we maneuver ourselves away from
greenhouse gasesand into this new carbon-shocked worldwhile
encouraging economic growth? The overarching demand of scientists, activists, politicians, and all engaged in the climate struggle has
been to pry apart the assumption that has reigned since the dawn
of the industrial revolutionthat economic growth requires fossil
fuels. Indeed, arguably the entire Paris Agreement that was signed
on December 12, 2015, by 186 nationsan unprecedented feat of
diplomacyamounted to a widespread acknowledgment that such
a coupling would no longer be the default position.
This book is an effort to navigate into and through the new
world taking shapewhere the impacts of climate change, and
the responses to it, come in bursts, in different forms, in different
places, but are everywhere, and simultaneously, shifting us away
from the status quo. To write it, I set off on a journey to find some
of the key tension points in this evolving world, where disruption is under way, and in which a new post-carbon equilibrium is
replacing the old destructive energy habits of the past. I found a
world in the midst of paradigmatic upheavals in our understanding of the planet as an ecological organism, and I saw a new
economy emerging amid all these competing forces, signifying an
end to the false accounting for energys costs that has reigned for
two centuries.
We will travel into the ever-widening circle of places where the
costs of climate change are being acutely felt, and witness the ongoing

Introduction | xvii

struggle to deal with the consequences. Well explore what these hot
spots might suggest about our economic and political future.
Well travel into the air, where a battle over airplanes contribution
to climate change is under way; to cities, where most of us live, that
are grappling with how to reconstitute themselves in greener directions; to the forests known to be one of the most effective means for
absorbing carbon emissions; to coastlines that have experienced their
own tragedies from our obsession with oil; to the financial markets
that are at the center of the worlds efforts to subject carbon to the
forces of the market; and to Brazil and China, the countries that
face the challenge of growing quickly at a time when carbon, the
offspring of all those fossil fuels we in the United States and other
developed nations have obtained at such a discount, is for the first
time taking on a price.
Our journey begins with the fundamental resource identified by
that team of forward-looking scientists pondering stationarity
water, the single most clarifying indicator of life on earth. There is
no one as dependent on water as farmersfor whom that point of
stationarity has been changing ominously fast. Person by person,
acre by acre, farmers are the planets first responders. They sense
the disruption up close and personal, for the crops they plant and the
fields and orchards they cultivate are fixed in position while conditions change around them.
As Milly put it to me back at that conference where the pulse of
the earth was being taken, What were living in is a grand experiment. And there are no other planets to serve as controls.