Sunday, September 24, 2006

Airline Mogul Pledges Billions in Fight Against…Global Warming?

The 20th century's 10 warmest years all occurred in the last 15 years of the century. Of these, 1998 was the warmest year on record.

—U.S. Environmental Protection Agency

Richard Branson was, in my estimation, the first “cool” billionaire.

Entirely self-created—he began a student magazine for which he talked Mick Jagger and John Lennon into being interviewed—Branson started Virgin Records and made a splash by signing the Rolling Stones to a mega-contract back when the Stones seemed on the verge of becoming irrelevant.

In fact, the Stones are irrelevant, music-wise. But tell that to the fans who made their “Bigger Bang” the highest-grossing tour of 2005, at $162 million.

What is it about the Stones’ mystique that causes aging boomers to pay top dollar so they can sit in giant football stadiums to watch 65 year-old men play 40 year-old songs on a stage so far away they in fact watch the entire concert on giant projector screens which, for all anybody knows, are showing replays from the 1989 “Steel Wheels” tour?

Is it the infectiously tribal quality of songs like “Sympathy for the Devil” and “Gimme Shelter”? The preening stagecraft of the seemingly ageless Mick Jagger? The delicate interplay between the under-rated Charlie Watts on drums and former Faces founder Ron Wood on guitar?

Personally, I think it’s watching Keith Richards not die year after year that keeps people interested. But that’s just me.

In any event, Branson—long hair, Brit accent, rock star sensibility—seemed like the first cool guy to make a billion dollars for himself. After all, he was (irrelevant Rolling Stones notwithstanding) the guy who signed the Sex Pistols after they’d been dumped by a couple of labels for courting too much controversy.

The irony, I suppose, is that Branson made his first billion by selling Virgin Music in order to start an airline, of all things. Over time, Virgin Atlantic and its various spin-offs have made him more money than the music business, and he is now a full-fledged corporate big, and a “Sir Richard” to boot.

Which brings us to the announcement last week that Sir Richard pledged three billion dollars at the Clinton Global Initiative to combat global warming:

“Our generation has inherited an incredibly beautiful world from our parents and they from their parents,” Sir Richard said. “It is in our hands whether our children and their children inherit the same world. We must not be the generation responsible for irreversibly damaging the environment.”
—The New York Times

Amen to that, right? How can anybody be against irreversibly damaging the environment?

Not lost on anybody, of course, is that this guy runs an airline.

Airlines fly airplanes which run on jet engines that emit carbon dioxide by the ton, a non-trivial problem because rising carbon dioxide concentrations in the atmosphere retain heat—hence the “greenhouse effect” contributing to the above-mentioned warmest years of the 1900s not coincidentally crowding together during the last decade of that century.

Not only do jet engines emit carbon dioxide, but they leave contrails in their wake, which add to cloud layers that likewise trap heat, thus further contributing to the planet’s slow-boil.

Air traffic and, therefore, contrails, are not evenly distributed around the globe. They are concentrated over parts of the United States and Europe, where local warming reaches up to 0.7 watts per square meter, or 35 times the global average.
—American Geophysical Union

The irony of a leading Global Warming Contributor pledging billions to address, well, Global Warming was not lost on even Katie Couric, about whose career, for some reason, people care deeply.

When the perky news gal asked Branson about that very irony following his grand announcement, he responded thusly:

“The only way people can get to London, for instance, is to go on Virgin Atlantic or another airline. And so it's not -- you're not going to stop that happening. So what we've got to do is come up with fuels that Virgin Atlantic can burn that are clean fuels, and that's where our money is going to go, in trying to develop new fuels that can fuel cars and planes and make sure that the world is a safer place.”

Feel-good prattle from a New Age billionaire? That’s what some are calling it.

But keep in mind this is a guy who’s literally risked his life doing stuff—round-the-world hot air balloon trips, for one—that most people with a billion in the bank would be advised by their advisors against doing.

Not only that, but he signed the Sex Pistols.

The snow cover in the Northern Hemisphere and floating ice in the Arctic Ocean have decreased. Globally, sea level has risen 4-8 inches over the past century. Worldwide precipitation over land has increased by about one percent.

I think Branson is still the first cool billionaire.

Jeff Matthews
I Am Not Making This Up

© 2006 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.


MightBWrong said...

Remeber that Ted Turner pledged a cool billion to the U.N. when he was high on Time-Warner stock options...fortuneately (or unforuneately depending on your point of view) his stock options went to darn near worthless and he reneged on his I don't know whose going to hold Branson's feet to the fire - (ask Harvard about Larry Ellison's last pledge for money...) - but these Billionare pledges are usually worth the paper they are written on...let's see a copy of the check. (Usually Democrats - and I'm not saying he is one - want other peoples money to solve the worlds ill's not their good for him - if he really follows through on this.) We should remember - if the inventor of dynamite can be the founder of the Nobel Peace Prize - why not the owner of an airline to be the founder of the cure for global warming (which by the way - we should all remember that the United States was once covered by a glacier - it formed the Mississippi river - I guess if Al Gore had been around - we would have kept the ice age a little longer.) enough on this thought...sorry.

econjohn said...

in all honesty, jeff, if you did diligence on a company that signed *that* big of a deal with the rolling stones at *that* point in their career, would you invest? it's music biz equivalent of buying naming rights to a football (american) stadium -- strictly ego and headline driven and certainly not in the interest of the record company.

props to branson for the investment. i completely agree that there has to be an evolution on energy usage. even if you don't buy the "green" argument, human ingenuity surely can surely invent something more efficient. and there are plenty of political and economic reasons to do so if one refuses to believe there are environmental imperatives ones.

as to mightbwrong's concerns whether, unlike turner and the UN or ellison and harvard, he'll follow through -- i believe these are actual investments (starting virgin fuels earlier this year and now throwing actual money into what sounds to me like an energy vc fund).

lastly, as to dem's wanting other people's money to solve the world's ills, how is that any worse than republicans wanting the same in order to solve their own?

blake said...

“Hot & Cold Media Spin: A Challenge To Journalists Who Cover Global Warming”

A more objective analysis of the global warming issue and the medias coverage of it.....for those more interested in facts.


"Many in the media, as I noted earlier, have taken it upon themselves to drop all pretense of balance on global warming and instead become committed advocates for the issue.

Here is a quote from Newsweek magazine:

“There are ominous signs that the Earth’s weather patterns have begun to change dramatically and that these changes may portend a drastic decline in food production– with serious political implications for just about every nation on Earth.”

A headline in the New York Times reads: “Climate Changes Endanger World’s Food Output.” Here is a quote from Time Magazine:

“As they review the bizarre and unpredictable weather pattern of the past several years, a growing number of scientists are beginning to suspect that many seemingly contradictory meteorological fluctuations are actually part of a global climatic upheaval.”

All of this sounds very ominous. That is, until you realize that the three quotes I just read were from articles in 1975 editions of Newsweek Magazine and The New York Times, and Time Magazine in 1974.,23657,944914,00.html

They weren’t referring to global warming; they were warning of a coming ice age. "

AMIGA USER said...

Richard Branson is one of Britains biggest hypercrite. Every Vrigin company is ultimately based in some offshore tax haven, whilst at the same time all loses are on shore - private wealth - public cost anyone?

I think the Billion he waw on about was from some Virgin money invertment scheme - I think it will be cold day in hell before he spends his own