Climate Finance

On Energy, Carney the Wrong Man at the Worst Time

Posted on by Ron Clutz

Geoff Russ explains at his National Post article When it comes to energy, Carney is the wrong man at the worst time.  Excerpts in italics with my bolds and added images.

The world is moving on from global climate goals to more pressing matters

Even if only for a matter of weeks, Mark Carney is likely to become prime minister of Canada when this Liberal leadership race concludes. His vision for the country is rife with climate strategies and schemes belonging to a world most can remember, but that no longer exists.

The world has moved on. International accords such as the 2015 Paris Agreement, cooperation between financial institutions on climate goals, and more carbon pricing are no longer priorities for Canada in 2025. Canada is not a superpower, no serious person would say differently, and we have to swim in the global current of change.

Trudeau was not prepared for Trump’s bargaining style.

This doesn’t mean bowing to the whims of an unpredictable strongman, but it does require recognizing that the Obama world of liberal internationalism and high-minded ideals is gone. Whatever chance it had of enduring died with Joe Biden’s presidency.

Russia’s invasion of Ukraine in 2022 had already scrambled world energy supply lines, and Trump’s return to the White House, along with the rise of AI technology, have changed everything.

AI in particular has been one of the biggest shifts since Carney’s days as a central banker. The astonishing and rapid growth of AI has resulted in eye-popping demands for energy, with data centres set to consume more electricity than entire cities.

Grids will be pushed to their limits. This spells danger for Canadian provinces like British Columbia, whose hydroelectricity regime can no longer reliably supply its economy and population. For consecutive years now, BC Hydro has been forced to import energy from Alberta and the U.S., the latter of which may soon be subject to counter-tariffs and other heightened costs.

Carney’s ideas about the climate and the so-called “energy transition” are at odds with his promises to grow the use of AI in the public service and future economy. Canada will have to build many data centres to keep up with other G7 countries, but where will their energy come from?

Nuclear energy is the most commonly cited solution, and several American big-tech giants have made plans to use small modular reactors (SMRs) to power the data centres. Once built, nuclear power provides an abundance of cheap, low-emitting, and reliable energy.

B.C. has standing laws that prohibit the building of nuclear generators, and the provincial NDP government unambiguously rejected the possibility of changing that. In the meantime, wind and solar will not cut it, both being subject to weather patterns that make them unreliable and insufficient.

The best alternative is natural gas, 1,368 trillion cubic feet of which sits beneath the feet of Canadians and can serve as an abundant source of power for the modern economy. Unfortunately, Carney’s ideas about carbon pricing would fall directly on the producers, making it far more expensive while deterring investment.

Trump is an unabashed economic nationalist, and Canada needs
to make itself competitive and attractive to
both energy and technological investment.

Canadian natural gas is more important than ever, both for the country and the world. After Russia invaded Ukraine, EU countries had to rapidly seek new, stable suppliers of energy to replace the massive Russian gas imports that supplied much of the EU.

The war revealed how energy security amongst friends and allies was just as important as emissions reductions, if not more so. Canada’s first opportunity was squandered when the Liberal government rebuffed European calls for Canadian LNG as having “no business case”.

Germany has been forced to turn back to coal as a power source as energy bills surge, driving German automobile manufacturers to close down some of their plants. Canadian LNG exports need to be prioritized for domestic use and exports abroad, and insisting on slapping punitive carbon taxes on the industry is against Canada’s interests.

Another challenge to Canada’s economic future is the recently proposed, $44 billion USD LNG project in Alaska. Envisioned as a joint US-Japanese, the project would establish Alaska as the leading LNG exporter to Japan, one of the world’s largest importers of natural gas.

If completed, the Alaska LNG project would be a direct threat to BC’s natural gas industry. One of the major projects, Cedar LNG in Kitimat, is set to come online in 2028, followed by two more in Squamish and near Prince Rupert. B.C. has a good head start, but the US and Japan plowing ahead with $44 billion LNG deals should be a wakeup call to Ottawa.

An LNG export deal with Japan of similar value should be completed while American LNG still has to pass through the Panama Canal to get to Japan, not after it starts being shipped from Alaska. Taxing natural gas producers will slow potential projects down and make Canada less competitive.

Canada cannot diversify its trading partners if the U.S. is allowed to overtake our industries and slowing it down with carbon taxes and Canada’s onerous regulatory regime in the name of outdated climate movements is a gift to President Trump.

Like it or not, major international initiatives live or die
depending on American involvement. This was true of the
Trans-Pacific Partnership (TPP), and it is true of NATO.

Mark Carney’s own attempts to forge agreements such as the Glasgow Financial Alliance for Net Zero (GFANZ), which has been abandoned by major American and Canadian banks and financial institutions, have collapsed. Canada needs to prioritize building up our own internal energy infrastructure and making it as competitive and attractive to investors as possible.

This is the age of nationalism, and we should recognize the opportunities it will bring to Canada. If Carney’s pledge to make Canadians “masters of our own house” means trying to captain toothless climate accords and drive away investment, then he should not be the head of our house.

Sorting (Again) Climate and Weather Changes

Posted on by Ron Clutz

Brian C. Joondeph asks in his American Thinker Article When Did Changing Weather Become Climate Change? Excerpts in italics with my bolds and added images.

What’s the difference between weather and climate? Let’s ask the expert class, the governmental National Weather Service.

Weather is defined as the state of the atmosphere at a given time and place, with respect to variables such as temperature, moisture, wind speed and direction, and barometric pressure.

Climate is defined as the expected frequency of specific states of the atmosphere, ocean, and land, including variables such as temperature, salinity, soil moisture, wind speed and direction, and current strength and direction. It encompasses the weather over different periods of time and also relates to mutual interactions between the components of the earth system (e.g., atmospheric composition, volcanic eruptions, changes in the earth’s orbit around the sun, and changes in the energy from the sun itself).

That’s a mouthful, a typical governmental explanation. Simply put, weather is short-term, meaning days or a few weeks, while climate is long-term, meaning years, centuries, or longer. [Comment: I prefer a baseball analogy: Weather is like the batter swinging in the box, and climate is the batting statistics, hits, walks, RBIs etc.]

It’s sunny and unseasonably warm where I am today, but a week ago, it was snowy and unseasonably cold. A climate warrior might label the former as global warming, the latter as global cooling, or the composite as climate change. A rational person would call it weather.

The United Nations (UN) defines climate change,

Climate change refers to long-term shifts in temperatures and weather patterns. Such shifts can be natural, due to changes in the sun’s activity or large volcanic eruptions. But since the 1800s, human activities have been the main driver of climate change, primarily due to the burning of fossil fuels like coal, oil and gas.

The first sentence is undeniably true. The Great Lakes were once covered by mile-thick ice sheets that disappeared when the glaciers retreated 10,000 years ago. This is not long ago, considering the Earth’s 4.5 billion-year age.

Somehow, the climate cooled and warmed long before any significant human activity existed. And how many additional times did this happen in the past 4.5 billion years?

But the UN believes humans are the “main driver of climate change” since the 1800s, not explaining how climate changed so drastically 10,000 years ago to melt a mile-thick ice sheet during a time of minuscule human activity.

The UN relies on the Intergovernmental Panel on Climate Change (IPCC), that reports in a scary fashion,

Many of the changes observed in the climate are unprecedented in thousands, if not hundreds of thousands of years, and some of the changes already set in motion—such as continued sea level rise—are irreversible over hundreds to thousands of years.

Is today’s climate “unprecedented”? Do they know the temperatures hundreds of thousands of years ago? They should, as this data is readily available, published in the prestigious journal Science.

Researchers reconstructed global mean surface temperature using data assimilation, integrating geological data with climate model simulations. They discovered that “the Earth’s temperature has varied more dynamically than previously thought.”

PhanDA global mean surface temperature across the last 485 million years. The gray shading corresponds to different confidence levels, and the black line shows the average solution. The colored bands along the top reflect the climate state, with cooler colors indicating icehouse (coolhouse and coldhouse) climates, warmer colors indicating greenhouse (warmhouse and hothouse) climates, and the gray representing a transitional state. Source: Judd et al 2024

Today’s global temperature is low. It was last this cold 300 million years ago. According to the chart, Planet Earth has been cooling for the past 50 million years. Any man-made warming would be helpful now.

Scientists should know better, as should corporate media.
But obviously, they don’t.

I reference a few articles from this year in The Guardian, a two-hundred-year-old British newspaper considered a “newspaper of record in the UK” (along with the London Times), much like The New York Times in America. As a British newspaper, the Guardian has observed climate change firsthand, reporting on it cooling, then warming, then cooling again.

Another record is the recent (in geological terms) history of the Thames River. Between 1309 and 1814, it froze at least 23 times. There was a “frost fair” in 1608 when the river froze for over six weeks.

What caused this freeze? London’s activity in the 1600s was mainly overcrowding, disease, and crime, not air conditioners, internal combustion engines, and backyard grills.

More recently, the river froze over in 1963 and again partially in 2021. This seems to be normal cyclic climate change, far from the “man-made global warming” the UN and IPCC warn about.

The Guardian ran two stories this year without a bit of irony. In February of this year, their headline was “What will Spain look like when it runs out of water? Barcelona is giving us a glimpse.” In October, the new headline was “Spain floods: number killed passes 150 as scientists say climate change ‘most likely explanation’ – as it happened.”

From running out of water to flooding, all within a few months. It’s dry, then it’s wet. It’s cold, then it’s warm. And vice versa. It’s also normal. But The Guardian wants it both ways. It’s all climate change, in their view.

A month ago, the paper wrote, “Spain’s deadly floods and droughts are two faces of the climate crisis coin.” In other words, all forms of weather are climate change.

CNN wants it both ways, too. In December 2023, it ran a headline, “Winter is here, but it’s losing its cool.” One year later, without a bit of irony or introspection, it reversed itself with this headline, “It’s about to get dangerously cold, even for winter.”

Much like racism, when everything is considered racist, then nothing is. The same is true for climate change. Psychologists call this confirmation bias,

People display this bias when they select information that supports their views, ignoring contrary information, or when they interpret ambiguous evidence as supporting their existing attitudes. The effect is strongest for desired outcomes, for emotionally charged issues, and for deeply entrenched beliefs.

It is also hubris to believe that we can predict, much less control, the climate. The IPCC readily admits, “The climate system is a coupled non-linear chaotic system, and therefore, the long-term prediction of future climate states is impossible.”

Yet Al Gore, Greta Thunberg, John Kerry, and other “climate experts” claim to know exactly how many years it will be until the Earth is uninhabitable.

Speaking of Al Gore, I recommend Joel Gilbert’s new film, “The Climate According to AI Al Gore,” where Joel interviews an AI Gore, debunking Gore’s conviction, expertise, and the entire climate emergency of the left.

To the fearmongering, climate-catastrophizing left, it’s all humans’ fault, and with ever-increasing command-and-control diktats, rules, regulations, and taxes, we can affect forces beyond our comprehension and control.

The climate is indeed changing—it always has and always will. Temperatures will likely rise from their current 500 million-year low regardless of what the so-called experts, activists, or any world government agencies say or do.

In their attempts to regulate and tinker with Mother Nature, they may inadvertently destroy everything they are attempting to save—unless that’s the plan.

Previous Post: Corrupting Climate and Weather

An article at The Spectator raises the question Do alarmists know the difference between weather and climate?  The author Charles Moore may also be a man for all seasons like Sir Thomas More.  Excerpts in italics with my bolds and images.

A lot of clever people are putting the ‘green’ into ‘greenbacks’

Until recently, those expressing skepticism about climate change catastrophe have been hauled over the coals (or the renewables equivalent) for not understanding the difference between ‘climate’ and ‘weather’. The lack of global warming at the beginning of the 21st century was not to be taken, chided the warmists, as evidence that climate change was not happening. Weather was the passing phenomenon of each day: climate was the real, deep thing.

Now, however, the alarmists themselves have elided the two concepts, using the Australian bush fires as their cue. As Sir David Attenborough puts it: ‘The moment of crisis has come’. They could be right, of course, but how could they really know? In this sense, President Trump is surely justified in warning, at Davos, against the ‘Prophets of Doom’. Prophecy is a different skill from an exact understanding of the here and now.

Mr Trump might usefully have talked about the Profits of Doom too. If the movement can persuade western society that the climate emergency is upon us, there are enormous sums to be made by people who claim to be able to remedy it. Hence the patter now coming out of companies such as Blackrock, BP or Microsoft, fanned by Mammon’s public intellectuals, such as Mark Carney. A lot of clever people are putting the ‘green’ into ‘greenbacks’. A lot of less clever investors are going to get their fingers burnt.

See Also Stoking Big Climate Business

Footnote:  Case in Point:  Green Fraudsters Plead Guilty

Jeff Carpoff, 49, of Martinez, pleaded guilty today to conspiracy to commit wire fraud and money laundering. His wife, Paulette Carpoff, 46, pleaded guilty today to conspiracy to commit an offense against the United States and money laundering. According to court documents, between 2011 and 2018, DC Solar manufactured mobile solar generator units (MSG), solar generators that were mounted on trailers that were promoted as able to provide emergency power to cellphone towers and lighting at sporting events. A significant incentive for investors were generous federal tax credits due to the solar nature of the MSGs.

The conspirators pulled off their scheme by selling solar generators that did not exist to investors, making it appear that solar generators existed in locations that they did not, creating false financial statements, and obtaining false lease contracts, among other efforts to conceal the fraud. In reality, at least half of the approximately 17,000 solar generators claimed to have been manufactured by DC Solar did not exist.

“By all outer appearances this was a legitimate and successful company,” said Kareem Carter, Special Agent in Charge IRS Criminal Investigation. “But in reality it was all just smoke and mirrors — a Ponzi scheme touting tax benefits to the tune of over $900 million. IRS CI is committed to investigating those who take advantage and impact the financial well-being of others for their own personal gain.”

“The Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG) is pleased to join our law enforcement colleagues in announcing these guilty pleas,” stated Special Agent in Charge Wade Walters for the FDIC OIG San Francisco Regional Office. “The defendants conspired with others to create a fraudulent business venture that duped unsuspecting entities, including banks, to invest approximately $1 billion, which the two later used to support a lavish lifestyle.

Source:  https://wattsupwiththat.com/2020/01/27/dc-solar-owners-plead-guilty-to-largest-ponzi-scheme-in-eastern-california-history/

What Keeps “Energy Transition” Going? $ $ $

Posted on by Ron Clutz

Robert Gauthier answered posting on a Quora topic How could we reverse the damage done by the “green energy” global scam that brought less efficient and highly polluting energy producing projects and high energy prices? Excerpts in italics with my bolds and added images.

Wind and solar power has provided politicians with an excuse to dispense favours—including taxpayer-funded subsidies and tax preferences to a supposedly “green” industry—while appearing to do something for the environment. And yet, despite more than two decades of massive subsidies, tax preferences and purchasing mandates from governments, wind and solar power still represent barely more than a rounding error of global energy production. In jurisdictions where renewables enjoyed strong but ill-considered political support, consumers and taxpayers now face much higher electricity bills and less-reliable power. And despite promises to the contrary, countries such as Germany, which have significantly increased wind and solar electricity production, have seen no meaningful reduction of greenhouse gas emissions.

Far from being a miracle cure-all for the shortcomings of conventional power generation, wind and solar power exaggerate the symptoms they pretend to address. Added up over the past two decades, the cumulative subsidies across the world for biofuels, wind, and solar approach about $5 trillion, all of that to supply roughly 5% of global energy.

The whole justification for the falling costs of wind generation rested on the assumption that much bigger turbines would produce more output at lower capex cost per megawatt, without the large costs of generational change. Now we have confirmation that such optimism is entirely unjustified – the whole development process has been a case of too far, too fast. Again, this was both predictable and predicted. The idea that wind turbines are immune to the factors that affect other types of power engineering was always absurd. The consequence is that both capital and operating costs for wind farms will not fall as rapidly as claimed and may not fall significantly at all. It follows that current energy policies in the West are based on foundations of sand – naïve optimism reinforced by enthusiastic lobbying divorced from engineering reality.

In the end, however, politicians cannot defy the laws of physics and economics. The promise of wind and solar power will always clash with the need for electricity that is low cost and reliable. That’s why voters routinely punish politicians who pursue flawed renewable energy policies. Rising electricity costs due to increased wind and solar power damage the economy by making businesses that consume significant volumes of electricity less competitive and by leaving less money in the pockets of consumers.

In Ontario, Canada during the run of the Green Energy Act there which attempted to replace coal and nuclear with wind and solar the upshot was a 138% increase in the price of electricity at the meter for the consumers. This led to the government that brought in this legislation to lose the next election so badly that they were no longer recognized as a party in the legislature. Naturally the government that replaced them killed the program and started refurbishing the nuclear reactor fleet there.

Unfortunately, solar and wind technologies require huge amounts of land to deliver relatively small amounts of energy, disrupting natural habitats. The real estate that wind and solar energy demand led the Nature Conservancy to issue a report last year critical of “energy sprawl,” including tens of thousands of miles of high-voltage transmission lines needed to carry electricity from wind and solar installations to distant cities.

Land required for wind farms to power London UK

Building a single 100-MW wind farm—never mind thousands of them—requires some 30,000 tons of iron ore and 50,000 tons of concrete, as well as 900 tons of nonrecyclable plastics for the huge blades. With solar hardware, the tonnage in cement, steel, and glass is 150% greater than for wind, for the same energy output

Take batteries. It is estimated that current battery manufacturing capabilities will need to be in the order of 500-700 times bigger than now to support an all-electric global transport system. The materials needed just to allow the UK to transition to all electric transport involve amounts of materials equal to 200% the annual global production of cobalt, 75% of lithium carbonate, 100% of neodymium and 50% of copper. Scaling by a factor of 50 for world transport, and you see what is now a showstopper. The materials demands just for batteries are beyond known reserves.

And that’s just one of the issues. Others include vast costs constituting a multiple of current energy costs; the environmental impact of mining and transporting huge amounts of materials; need for vast amounts of rare elements, far beyond known world reserves; incredibly huge amounts of material to recycle when facilities wear out; and on and on.

Spend enough time researching this stuff and you gradually realize that almost everything you read about green energy shows that at best it’s really a dark shade of brown.

Trump to Bury Already Dead ESG

Posted on by Ron Clutz

John  Authers explains the demise of ESG in his Bloomberg article Trump Will Bury ESG, But It Was Already Dead. Excerpts in italics with my bolds and added images.

The green investing revolution never stood a chance in the US once
ensnared by the culture wars, but that wasn’t the only cause of death.

Ever So Gone

As was obvious even before voters went to the polls, ESG was already a decisive loser in the US. The concept of Environmental, Social and Governance investing became hopelessly entangled with the culture war agenda, failed to deliver on its promises, and went into retreat. Rather than attempt a technocratic, clean, green way of changing capitalism, America has opted for something more nationalist, even mercantilist.

ESG as a term has been demonized by politicians on the right, to the point that BlackRock’s Larry Fink said that it had been “weaponized” and should no longer be used. Because of Fink’s stand on ESG issues, BlackRock has become a lightning rod for conservative attacks lumped in with identity politics. Startlingly, the company shows up in a list of “decadent and rootless” institutions that should be burned to the ground in a new book by Kevin Roberts, the head of the Heritage Foundation, a distinction it bizarrely shares with the Boy Scouts of America and the Chinese Communist Party.

Supporters of the concept were already disillusioned that ESG had become little more than a marketing wheeze, and several big fund managers, including WisdomTree and Invesco, have faced fines in the US for “greenwashing” (claiming their products were greener than they really were). In France, BlackRock is under fire over allegations that 18 of its funds sold as sustainable are in fact investing in fossil fuels.

Regulator attitudes differ starkly across the Atlantic. In Europe, regulators have raised the ante by telling fund managers that they must reach minimum thresholds for environmental impact before they can use the ESG label — a move that makes it hard for them to keep investing in the US, where the best returns are, and requires them to become more active than is currently the case for many.

In the US, the Securities and Exchange Commission (SEC) has watered down its requirements on companies to disclose ESG statistics — and the whole concept is close to unworkable unless everyone has to disclose standardized statistics. In September, it quietly disbanded its task force on ESG enforcement. Now, the Trump administration is likely to make dismantling such rules one of its first acts in office.

That will complete a retreat that has largely already taken place. A look at the total market cap of BlackRock’s flagship ETFs covering the global energy and clean energy sectors shows that after a boom in 2021, the clean energy fund has steadily dwindled, and is now worth slightly less than the main energy fund:

Investors Wash Their Hands of Clean Energy
There has been an exodus from clean energy stocks in the last two years

Much of this is driven by the declining share prices of clean energy stocks. However, if we look at the number of shares in the ETF, it’s clear that there were huge inflows during the pandemic, and much of that money has now been withdrawn.

Investors are losing interest in the concept, and claims that ESG would reduce
global warming, or starve fossil fuel groups of capital, look overblown.

Interest among the public has waned in the US — although not elsewhere. Google Trends shows that US searches for ESG and its synonyms tanked over the last two years, while continuing at much the same level elsewhere. The rest of the world still seems happy to give it a try, but America is no longer going along for the ride.

The pattern recurs in the news media. Counting stories published on the Bloomberg terminal from all sources shows interest peaking in 2016, when Donald Trump was first elected, and long before the flow of money went into reverse. By the time that Fink said ESG had been “weaponized,” interest was barely a third its 2016 level and has continued to dwindle.

Critically from the point of view of how capitalism is operating, the same pattern shows up in earnings call transcripts. Bloomberg’s Document Search function shows that executives — not just Larry Fink — no longer want to talk about it. This is our quarter-by-quarter measure of mentions of ESG and its various synonyms since 2010. Mentions exploded after the pandemic, and have tumbled since 2022. With this earning season roughly 90% over, interest from executives in ESG looks to be right back to pre-pandemic levels’.

This is at least in part because fund managers are no longer forcing the issue. BlackRock is admirably transparent about the way it votes its shares, and produces regular reports; here is the latest. As this chart from the report (which is worth a read) demonstrates, the amount of support from shareholders for environmental and social proposals has declined markedly over the last three years:

BlackRock itself upped its support for corporate governance proposals, but only backed 4% of social and environmental proposals (down from 20% two years earlier). It also declined to support any of the various anti-ESG proposals that were put forward, and complained that many of them were duplicative or poorly drafted. But the notion that ESG was going to change the way companies operate seems to be in retreat.

Once Trump is back in the White House in January, we’ll learn much more about how his economic nationalism will work. Fine-tuning capitalism to make it more long-termist and take into account more than the narrowly defined interests of shareholders — the big ESG idea — has been comprehensively defeated. Now we wait to see what version of mercantilism comes in its stead.

Footnote: Fundamental Reasons People Reject ESG Were Not Addressed by Author

 

 

 

 

False Premises for Hague Climate Reparations Hearing

Posted on by Ron Clutz

Public hearings at the International Court of Justice in The Hague on the request for an advisory opinion on the Obligations of States in respect of Climate Change, December 2024 (Photo: International Court of Justice)

After one week of the hearing at International Court of Justice (ICJ) the thrust of the event is clear.  It is an attempt to redistribute wealth from nations who developed and prospered from basing their societies on hydrocarbons to other nations who have not done so as successfully.  The “victims” claim compensation because burning hydrocarbons caused global warming which will raise sea levels and flood island nations.  This is called “Climate Justice.”

The parties, including presumably the judges, take this premise without question, so the whole proceeding is based on PR without scientific foundation.

Recently green campaigners were warning that small Pacific islands would drown as sea levels rose. In 2019 United Nations Secretary-General António Guterres flew all the way to Tuvalu, in the South Pacific, for a Time magazine cover shot. Wearing a suit, he stood up to his thighs in the water behind the headline “Our Sinking Planet.” The accompanying article warned the island—and others like it—would be struck “off the map entirely” by rising sea levels.

Earlier this year, the New York Times finally shared what it called “surprising” climate news: Almost all atoll islands are stable or increasing in size. In fact, scientific literature has documented this for more than a decade. While rising sea levels do erode land, additional sand from old coral is washed up on low-lying shores. Extensive studies have long shown this accretion is stronger than climate-caused erosion, meaning the land area of Tuvalu and many other small islands is increasing.

These appeals were made previously by the Maldives and Fiji, who co-hosted the Madrid COP.  But stubborn facts undermine the credibility of the premise.

It is a widely accepted climate view—based on wild speculations from some op/ed writers and partisan politicians–is that average sea levels are increasing dangerously and rationalize an immediate governmental response. But as we shall demonstrate below, this perspective is simply not accurate.

There is a wide scientific consensus (based on satellite laser altimeter readings since 1993) that the rate of increase in overall sea levels has been approximately .12 inches per year.

To put that increase in perspective, the average sea level nine years from now (in 2029) is likely to be approximately one inch higher than it is now (2020). One inch is roughly the distance from the tip of your finger to the first knuckle. Even by the turn of the next century (in 2100), average ocean levels (at that rate of increase) should be only a foot or so higher than they are at present.

 

None of this sounds particularly alarming for the general society and little of it can justify any draconian regulations or costly infrastructure investments. The exception might be for very low- lying ocean communities or for properties (nuclear power plants) that, if flooded, would present a wide-ranging risk to the general population. But even here there is no reason for immediate panic. Since ocean levels are rising in small, discrete marginal increments, private and public decision makers would have reasonable amounts of time to prepare, adjust and invest (in flood abatement measures, etc.) if required.

But are sea levels actually rising at all? Empirical evidence of any substantial increases taken from land-based measurements has been ambiguous. This suggests to some scientists that laser and tidal-based measurements of ocean levels over time have not been particularly accurate.

For example, Professor Niles-Axel Morner (Stockholm University) is infamous in climate circles for arguing–based on his actual study of sea levels in the Fiji Islands–that “there are no traces of any present rise in sea levels; on the contrary, full stability.” And while Morner’s views are controversial, he has at least supplied peer reviewed empirical evidence to substantiate his nihilist position on the sea-level increase hypothesis.

The world has many important societal problems and only a limited amount of resources to address them. What we don’t need are overly dramatic climate-change claims that are unsubstantiated and arrive attached to expensive public policies that, if enacted, would fundamentally alter the foundations of our economic system.

See Also:

Fear Not For Fiji

Islands Adapting to Change: Tuvalu

 

Dearth of Green Jobs in UK

Posted on by Ron Clutz

Chris Morrison provides the analysis in his Daily Sceptic article ONS Reveals the Pitiful Number of New Green Jobs Being Created in the U.K. Economy.  Excerpts in italics with my bolds and added images.

The problem with the green U.K. economy, and its associated destruction of the hydrocarbon environment, is that there are very few jobs being created. The few remaining ‘workers’ in the ruling Labour party are starting to rumble all the luxury boondoggles that are set to further decimate well-paid jobs in their communities. The figures compiled by the Office for National Statistics (ONS), trying to estimate the actual number of green jobs, are always a highly creative hoot, and the latest batch are no exception. Many jobs identified are simply displacement activity, with one repair or maintenance occupation taking over from another. Around 6% of the total are to be found in ‘environmental charities’, an interesting way to describe elite billionaire political funding to push the Net Zero fantasy. Such is the seeming desperation to rustle up a green job, the ONS even includes repairing home appliances, controlling forest fires and separating hydrogen by carbon dioxide-producing electrolysis.

The latest ‘estimates’ from the ONS cover 2021 and 2022, and they are said to show an increase in both years. But as the graph below reveals, the rises are pitiful over a decade, and the 2022 estimate of 639,000 is less than 2% of jobs in the economy as a whole.

As can be seen, environmental charities employ 40,000 people, almost as many as the 47,000 that work in renewable energy. But the charities figure does not include all those make-work jobs in environmental consultancy and education or what is described as in-house environmental activities. If all the displacement, invented or re-badged jobs in repair, electric vehicles, waste disposal, water treatment, energy efficiency, Net Zero promotion, teaching and the ubiquitous bureaucracy are rightly ignored, it is unlikely that more than 150,000 new jobs have been created.

Fairly small pickings, it might be thought, from all the cash sprayed at subsidy-hunting chancers over at least two decades. Even worse, any new jobs are easily offset by the occupations being destroyed in steel making, refining hydrocarbons, coal mining and oil and gas exploration. Fracking for gas would transform a number of deprived areas in the U.K. at little environmental cost, as it has done in the U.S. Energy security would likely be achieved, and the tax take would be considerable. But fracking is anathema to the major political parties in the U.K., except the emerging Reform party.Last week saw some real push back on the madness of Net Zero and the so-called green economy. The boss of GMB, the third largest trade union in the country, told the annual Labour party conference that its plans to decarbonise the energy network by 2030 will cost up to one million jobs, decimate working communities and push up bills for the poorest. According to Smith, Government’s plans for Net Zero were “bonkers” and “fundamentally dishonest”. In a week when it was revealed that British consumers, both industrial and private, had some of the highest electricity prices in the developed world, he charged that current energy policy amounted to virtue signalling by politicians. He accused them of exporting jobs and importing virtue because the jobs were being created abroad rather than in the U.K.

Meanwhile, a recent paper published in Science came to a damning conclusion that will not surprise sceptics, namely that 96% of climate policies over the last 25 years, ultimately designed to reduce carbon dioxide emissions, have been a waste of money. “That’s where green spin has got us,” writes George Monbiot, although these days the Guardian’s extremist-in-chief seems to have given up on all life enhancing processes that run the risk of disturbing anything on the planet. “Finally, 15 years and a trillion dollars too late, George Monbiot says what sceptics have been saying all along,” observes the sceptical journalist Jo Nova. “Nearly every single carbon reduction scheme is a useless make-work machination that creates the illusion that the government is doing something,” she says.

As we can see, the ONS survey is full of these make-work schemes providing jobs that can only exist by rigging free markets and providing eye-watering subsidies from consumers and taxpayers. As the more concerned trade unionists can see, much of the cost of these fantasy ventures falls on the poorest members of society forced to pay higher prices for many of the basic essentials of life. In addition, as we have observed, most green schemes make mugs of the wider investing public, with the RENIXX, a stock capitalisation global index of the 30 largest renewable industrial companies, showing near zero growth since it was started in 2006. None of this matters, of course, to the Mad Miliband and his weird wonks at the U.K. Department of Energy, who are ramping up ideological plans to hose cash at daft ideas like carbon capture, battery energy storage and hydrogen production.

Not only is CO2 Capture and Storage wildly impractical, its aim is to deprive the biosphere of plant food.

But all is not lost on the jobs front – opportunities must be taken when they occur. Earlier this year, Gary Smith was able to point to some new employment clearing away the animal casualties of wind farm blades. “It’s usually a man in a rowing boat, sweeping up the dead birds,” he observed.

Footnote Q & A:

Q:  What is the difference between Golf and Government?

A:  In Government you can always improve your lie.

–Anonymous Source

Resources

Climate Policies Fail in Fact and in Theory

Investors Beware Green Equipment Companies

Green Deal Cuts EU Emissions, Doubles Them Elsewhere

Investors Beware Green Equipment Companies

Posted on by Ron Clutz

Steve Goreham explains in his Heartland article Why Are Renewable Equipment Companies Such Poor Investments? Excerpts in italics with my bolds and added images.

Headlines promote renewable energy equipment companies as part of efforts to transition to Net Zero carbon dioxide emissions by 2050. Wind and solar system providers, electric vehicle manufacturers, green hydrogen producers, and other green equipment firms form a growing share of world industry. But renewable equipment firms suffer poor market returns, so investors should beware.

The Renewable Energy Industrial Index (RENIXX) is a global stock index of the 30 largest renewable energy industrial companies in the world by stock market capitalization. Current RENIXX companies include Enphase Energy, First Solar, Orsted, Plug Power, Tesla, and Vestas.

IWR of Germany established the RENIXX on May 1, 2006, with an initial value of 1,000 points. This month, the RENIXX stood at 1,013 points, essentially zero value growth over the last 18 years. In comparison, the S&P 500 Index more than quadrupled over the same period. The RENIXX is down three years in a row from 2021, losing about half its value.

Wind turbine manufacturers faced serious financial challenges over the last three years, even with rising sales. Rising costs, high interest rates, and project delays continue to impact the profitability of wind projects and equipment suppliers. The stock of Denmark-based Vestas Wind Systems, the world’s largest supplier, rose only 7% over the last 16 years, and its stock price has fallen 58% from a high in 2021. Vestas struggled to make a profit in 2022 and 2023 and suspended dividends to shareholders.

Other major wind suppliers have also been poor investments for shareholders. The stock of Siemens Gamesa, the number two turbine maker, is down 65% since a peak in 2021. Gamesa reported a loss of €4.4 billion in 2023 and received a €7.5 billion bailout from the German government that same year. Other top wind suppliers suffered major stock price declines since 2021, including Goldwind of China (down 77%) and Nordex of Germany (-36%).

Some 80% of the world’s solar panels are manufactured in China and the top six suppliers reside in China. The solar panel industry is beset by overcapacity and severe competition. Stock prices of the top seven suppliers have all declined by more than 50% since 2021. The stock of U.S. firm First Solar has risen since 2021 but remains below its all-time high price reached in 2008.

Tesla, which was founded in 2003, remained the only pure-play, publicly traded EV stock until 2018. By the end of 2021, Tesla’s value had soared to over $1 Trillion, boasting a market value more than Toyota, Volkswagen, Mercedes-Benz, General Motors, Ford, BMW, and Honda combined. But Tesla is the exception.

But in most cases, electric vehicle (EV) companies have been very poor investments. Between 2020 and 2024, 31 EV companies went public on U.S. stock exchanges. Only one of these 31 companies, the Chinese firm Li Auto, saw its price rise since the initial public offering (IPO). Thirty EV firms saw their stock prices fall, most precipitously.

EV company price declines from the IPO price include Fisker (-99%), Nikola (-94%), NIO (-50%), Lucid Group (-75%), and Rivian (-88%). Six others of the 31 companies went bankrupt. Tesla and Chinese firms BYD and Li Auto are the only EV firms profitable today.

ChargePoint is the world’s largest dedicated EV charger company (behind EV manufacturer Tesla), with over 25,000 charging stations in the U.S. and Canada. ChargePoint went public in 2021 by merging with Switchback Energy Acquisition Corporation, valued at $2.4 billion. The firm’s value today is about $585 million, down 76% since 2021.  For fiscal year 2024, ChargePoint lost $458 million on revenue of $507 million.

It’s not clear that any charging company can make money. High-speed, 50-kilowatt EV chargers cost about five times as much as traditional gasoline pumps. Around 80% of EV charging is done at home, reducing the demand for public charging. ChargePoint, EVgo, Wallbox, Allego, and Blink Charging are all valued today at small fractions of their original IPO price. No EV charger firm is profitable, even after continuing to receive large government subsidies.

Plug Power is a leading supplier of hydrogen energy systems, including battery-cells for hydrogen vehicles and electrolyzers to produce green hydrogen fuel. Founded in 1997, the company went public in October 1999 at a split-adjusted price of about $160 per share.

But during its 27-year history, Plug Power has never turned a profit. According to financial reports, the firm lost $1.45 billion in 2024, up from a loss of $43.8 million in 2018. Its current stock price is under two dollars per share.

Traditional established firms are finding that renewable equipment can be poor business. In 2023, Ford lost $4.7 billion on sales of 116,000 electric vehicles, or over $40,000 per vehicle. General Electric’s wind turbine business lost $1.1 billion in 2023.

The U.S. federal government provided subsidies to renewable equipment companies of between $7 billion and $16 billion per year between 2010 and 2022. But the Cato Institute estimates that because of the passage of the Inflation Reduction Act in 2022, subsidies will skyrocket to about $80 billion in fiscal year 2025.

EIA

Without the fear of human-caused climate change and
a rising level of government subsidies and mandates,
many of these green companies would not exist.

It’s doubtful that carbon dioxide pipelines, heavy electric trucks, offshore wind systems, green hydrogen fuel equipment, and EV charging stations would be viable businesses in unsubsidized capital markets.

During this last year, leading financial firms pulled back on their climate change pledges. Bank of America, JP Morgan, State Street, and Pimco withdrew from Climate Action 100+, which seeks to force companies and investment funds to address climate issues and adopt environmental, social, and governance (ESG) policies.

But it’s difficult to invest in renewable equipment companies
when they are losing money.

 

Good News: SEC’s ESG Plans Thwarted with Biden Term Ending

Posted on by Ron Clutz

The news comes from Bloomberg Law article SEC’s Gensler Sees ESG Plans Thwarted as Biden’s Term Nears End. Excerpts in italics with my bolds and added images.

SEC Chair Gary Gensler started out with big plans on ESG.

  • Gensler seeks board diversity, workforce, ESG fund disclosures
  • Agency unlikely to finalize ESG regulations before January

The Democrat arrived at the Securities and Exchange Commission in 2021, after George Floyd’s murder in 2020 and President Joe Biden’s election that year fueled interest in environmental, social and governance investing. Gensler wanted public companies to report details about their climate change risks, workforce management and board members’ diversity.

He also sought new rules to fight greenwashing and other misleading ESG claims by investment funds.

Almost four years later, most of those major ESG regulations are unfinished, and they’ll likely remain so in the less than five months Gensler may have left as chair. A conservative-led backlash against ESG and federal agency authority has fueled challenges in and out of court to corporate greenhouse gas emissions reporting rules and other SEC actions, helping blunt the commission’s power.

The climate rules—Gensler’s marquee ESG initiative—were watered down following intense industry pushback, then paused altogether after business groups, Republican attorneys general and others sued.

“It’s clear the commission leadership is exhausted and feeling buffeted by the courts, Congress and industry complaints,” said Tyler Gellasch, who was a counsel to former Democratic SEC Commissioner Kara Stein and is president and CEO of investor advocacy group Healthy Markets Association.

The SEC has finalized more than 40 rules since 2021, “making our capital markets more efficient, transparent, and resilient,” an agency spokesperson said in a statement to Bloomberg Law.

The spokesperson declined to comment on the status of the agency’s pending ESG rules, beyond pointing to the commission’s most recent regulatory agenda.

Long-standing plans to require human capital and board diversity disclosures from companies have yet to yield formal proposals. Final rules concerning ESG-focused funds still are pending, and even if the SEC adopts them before January as the agenda suggests, a Republican-controlled Congress and White House may have the power to quickly scrap them under the Congressional Review Act.

Unlike the workforce and board diversity rules that have yet to be proposed, investment fund regulations concerning ESG have already been drafted and are targeted for completion in October, according to the SEC’s latest agenda. ESG funds would have to disclose their portfolio companies’ emissions and report on their ESG strategies.

The SEC proposed the regulations in May 2022, along with rules intended to ensure ESG funds’ names align with their investments. The commission issued final fund name rules in September 2023.

The SEC’s investment fund proposal has raised objections from both funds and environmental and investor advocates.

The proposal would require environmentally-focused funds to disclose their carbon footprints, if emissions are part of their investment strategies. But it wouldn’t require funds that look at emissions to disclose other metrics that play a significant role in how they invest and the methodology they use to calculate those measures. The Natural Resources Defense Council, Interfaith Center on Corporate Responsibility, and other environmental and investor groups pushed for those requirements in an April letter to the SEC.

The Investment Company Institute, which represents funds, has raised concerns its members would have to report on their carbon footprints before public companies must disclose their emissions under SEC rules. The group in April called on the SEC to keep fund emissions reporting requirements on ice until the litigation challenging the agency’s public company climate rules is resolved. That litigation is at the US Court of Appeals for the Eighth Circuit, which is unlikely to rule this year.

The fund rules have received no Republican support at the SEC, with only Gensler and his fellow Democratic commissioners voting in favor of proposing them.

“If it’s a Republican Congress and Trump administration, you could imagine they would be willing to disapprove those,” said Susan Dudley, a George Washington University professor who oversaw the White House regulatory policy office under President George W. Bush.

 

Climate Policies Fail in Fact and in Theory

Posted on by Ron Clutz

A recent international analysis of 1500 climate policies around the world concluded that 63 or 4% of them were successful in reducing emissions.  The paper is Climate policies that achieved major emission reductions: Global evidence from two decades published at Science.org.  Excerpts in italics with my bolds.

Abstract

Meeting the Paris Agreement’s climate targets necessitates better knowledge about which climate policies work in reducing emissions at the necessary scale. We provide a global, systematic ex post evaluation to identify policy combinations that have led to large emission reductions out of 1500 climate policies implemented between 1998 and 2022 across 41 countries from six continents. Our approachintegrates a comprehensive climate policy database with a machine learning–based extension ofthe common difference-in-differences approach. We identified 63 successful policy interventions with total emission reductions between 0.6 billion and 1.8 billion metric tonnes CO2 . Our insights on effective but rarely studied policy combinations highlight the important role of price-based instruments in well-designed policy mixes and the policy efforts necessary for closing the emissions gap.

Context

(1). Although the [Paris] agreement seeks to limit global average temperature increase to “well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C,” its success critically hinges on the implementation of effective climate policies at the national level.  However, scenarios from global integrated assessment models suggest that the aggregated mitigation efforts communicated through nationally determined contributions (NDCs) fall short of the required emission reductions.

(2)The United Nations (UN) estimates quantify a median emission gap of 23 billion metric tonnes(Gt) carbon dioxide equivalent (CO2-eq) by 2030

(3). The persistence of this emissions gap is not only caused by an ambition gap but also a gap in the outcomes that adopted policies achieve in terms of emission reductions.

(4). This raises the fundamental question as to which types of policy measures are successfully causing meaningful emission reductions. Despite more than two decades of experience with thousands of diverse climate policy measures gained around the world, there is consensus in neither science nor policy on this question.

The exhibit above shows the scope and complexity of the analysis.  But the bottom line is that 96% of the effort and trillions of $$$ were spent to no avail. It is estimated that on the order of 1.2 Billion tonnes of CO2 were prevented over the last 20 years, with an additional 23 Billion tonnes to be erased by 2030. 

Any enterprise with that performance would be liquidated. 
That is an epic failure in fact. 

And recommending mixing of policies including subsidies and regulations along with pricing goes against economic theory and fails in practice. Ross McKitrick explains the dangers of making climate policies willy-nilly in his Financial Post article Economists’ letter misses the point about the carbon tax revolt.  Excerpts in italics with my bolds and added images.

Yes, the carbon tax works great in a ‘first-best’ world where it’s the
only carbon policy. In the real world, carbon policies are piled high.

An open letter is circulating online among my economist colleagues aiming to promote sound thinking on carbon taxes. It makes some valid points and will probably get waved around in the House of Commons before long. But it’s conspicuously selective in its focus, to the point of ignoring the main problems with Canadian climate policy as a whole.

EV charging sign Electric-vehicle mandates and subsidies are among the mountain of climate policies that have been piled on top of Canada’s carbon tax. PHOTO BY JOSHUA A. BICKEL/THE ASSOCIATED PRESS

There’s a massive pile of boulders blocking the road to efficient policy, including:

    • clean fuel regulations,
    • the oil-and-gas-sector emissions cap,
    • the electricity sector coal phase-out,
    • strict energy efficiency rules for new and existing buildings,
    • new performance mandates for natural gas-fired generation plants,
    • the regulatory blockade against liquified natural gas export facilities,
    • new motor vehicle fuel economy standards,
    • caps on fertilizer use on farms,
    • provincial ethanol production subsidies,
    • electric vehicle mandates and subsidies,
    • provincial renewable electricity mandates,
    • grid-scale battery storage experiments,
    • the Green Infrastructure Fund,
    • carbon capture and underground storage mandates, 
    • subsidies for electric buses and emergency vehicles in Canadian cities,
    • new aviation and rail sector emission limits,
      and many more.

Not one of these occasioned a letter of protest from Canadian economists.

Beside that mountain of boulders there’s a twig labelled “overstated objections to carbon pricing.” At the sight of it, hundreds of economists have rushed forward to sweep it off the road. What a help!

To my well-meaning colleagues I say: the pile of regulatory boulders
long ago made the economic case for carbon pricing irrelevant.

Layering a carbon tax on top of current and planned command-and-control regulations does not yield an efficient outcome, it just raises the overall cost to consumers. Which is why I can’t get excited about and certainly won’t sign the carbon-pricing letter. That’s not where the heavy lifting is needed.

My colleagues object to exaggerated claims about the cost of carbon taxes. Fair enough. But far worse are exaggerated claims about both the benefits of reducing carbon dioxide emissions and the economic opportunities associated with the so-called “energy transition.” Exaggeration about the benefits of emission reduction is traceable to poor-quality academic research, such as continued use of climate models known to have large, persistent warming biases and of the RCP8.5 emissions scenario, long since shown in the academic literature to be grossly exaggerated.

But a lot of it is simply groundless rhetoric. Climate activists, politicians and journalists have spent years blaming Canadians’ fossil fuel use for every bad weather event that comes along and shutting down rational debate with polemical cudgels such as “climate emergency” declarations. Again, none of this occasioned a cautionary letter from economists.

There’s another big issue on which the letter was silent. Suppose we did clear all the regulatory boulders along with the carbon-pricing-costs-too-much twig. How high should the carbon tax be? A few of the letter’s signatories are former students of mine so I expect they remember the formula for an optimal emissions tax in the presence of an existing tax system. If not, they can take their copy of Economic Analysis of Environmental Policy by Prof. McKitrick off the shelf, blow off the thick layer of dust and look it up. Or they can consult any of the half-dozen or so journal articles published since the 1970s that derive it. But I suspect most of the other signatories have never seen the formula and don’t even know it exists.

To be technical for a moment, the optimal carbon tax rate varies inversely with the marginal cost of the overall tax system. The higher the tax burden — and with our heavy reliance on income taxes our burden is high — the costlier it is at the margin to provide any public good, including emissions reductions. Economists call this a “second-best problem”: inefficiencies in one place, like the tax system, cause inefficiencies in other policy areas, yielding in this case a higher optimal level of emissions and a lower optimal carbon tax rate.

Based on reasonable estimates of the social cost of carbon and the marginal costs of our tax system, our carbon price is already high enough. In fact, it may well be too high. I say this as one of the only Canadian economists who has published on all aspects of the question. Believing in mainstream climate science and economics, as I do, does not oblige you to dismiss public complaints that the carbon tax is too costly.

Which raises my final point: the age of mass academic letter-writing has long since passed. Academia has become too politically one-sided. Universities don’t get to spend years filling their ranks with staff drawn from one side of the political spectrum and then expect to be viewed as neutral arbiters of public policy issues. The more signatories there are on a letter like this, the less impact it will have. People nowadays will make up their own minds, thank you very much, and a well-argued essay by an individual willing to stand alone may even carry more weight.

Online conversations today are about rising living costs, stagnant real wages and deindustrialization. Even if carbon pricing isn’t the main cause of all this, climate policy is playing a growing role and people can be excused for lumping it all together. The public would welcome insight from economists about how to deal with these challenges. A mass letter enthusing about carbon taxes doesn’t provide it.

Postscript:  All the Pain for No Gain is Unnecessary

 

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Biden Climate Policies the Greatest Financial Risk

Posted on by Ron Clutz

Will Hild writes at Real Clear Policy The Biden Administration Proves Itself Wrong on ‘Climate Risk’.  The report shows how the feds’ own numbers prove their net zero policies pose a far greater financial risk than the climate itself. Excerpts in italics with my bolds and added images.

Environmental activists and left-leaning political bodies have long argued that climate risk is a form of financial risk, constantly pressuring blue states and the Biden Administration to make the issue a central part of their agendas. Recently, a group of those states has started suing oil and gas companies directly in their state courts. California, for example, claims that oil companies have colluded for decades to keep clean energy unavailable. Such lawsuits are ludicrous, and my organization, Consumers’ Research, filed an amicus brief at the Supreme Court supporting an effort to stop this litigation abuse that drives up consumer costs.

These harmful suits are driven in part by the idea that climate risks are inherently financial risks. However, evidence from the Biden Administration’s own study on climate risk shows that these risks are grossly exaggerated and immaterial. In an attempt to justify its radical and onerous climate policies, the Administration inadvertently exposed the fraud behind the environmental movement.

Soon after taking office, President Biden issued an executive order asking executive agencies to assess “the climate-related financial risk, including both physical and transition risks, to … the stability of the U.S. financial system.” Agency officials quickly responded to the order. Treasury Secretary Yellen announced that “climate change is an emerging and increasing threat to U.S. financial stability.” The FDIC declared that climate risk endangered the banking system. The SEC issued controversial climate risk disclosure rules, which impose massive regulatory burdens on Americans.

The problem with these new rules is that the Administration lacked
sufficient evidence to show that “climate-related financial risk” existed.

The SEC and Secretary Yellen relied on a Biden Administration report issued in 2021 by the Financial Stability Oversight Council. However, the report itself admitted that there were “gaps” in the evidence needed to support its speculative assertion that climate change would “likely” present shocks to the financial system. 

John H. Cochrane, a respected Stanford professor, slammed the Biden Administration’s “climate-related financial risk” assertions and highlighted that the Administration has not shown any serious threat to the financial system. “Financial regulators may only act if they think financial stability is at risk,” but “there is absolutely nothing in even the most extreme scientific speculations” to support the type of risk that would allow financial regulators to intervene. [See my synopsis Financial Systems Have Little Risk from Climate]

In response to criticism, the Biden Administration came up with an idea to manufacture its own evidence.  If the Federal Reserve created scenarios in which banks must simulate extreme “physical” and “transition” climate risks, these custom-designed scenarios could show a large impact to the financial system just like federal “stress tests” for banks.

To ensure that the “stresses” were sufficiently severe,
the Biden Administration manipulated the scenarios
to ensure as much stress as possible. 

For example, for “physical risk,” major banks had to simulate the effect of a storm-of-two-centuries-sized hurricane smashing into the heavily populated Northeast United States with no insurance coverage available to pay for the damage.  For “transition risk,” the government demanded a simulation in which “stringent climate policies are introduced immediately,” without any chance for banks to prepare for such policies, along with rapidly rising carbon prices. 

Despite these attempts to make the climate risk as extreme as possible, the tests utterly failed to demonstrate any significant effect.  The Administration’s study demonstrated that even under some of the most extreme climate scenarios imaginable, the probability of default on loans only increased by half a percentage point or less.   In contrast, federal bank stress tests involving true financial stresses, such as a severe recession, have resulted in probabilities of default jumping by 20 to 40 times that amount or more, leading to hundreds of billions in losses. 

The climate analyses also revealed the expected costs
of the Biden Administration’s quixotic net zero quest. 

The Biden Administration employed scenarios from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). Those climate scenarios envision the cost of carbon emissions steadily rising and reaching over $400 per ton by 2050.  Given that the average American emits about 16 tons of carbon a year, the Biden Administration’s hand-picked climate scenarios would cost the average American around $125k between now and 2050 in government mandated carbon fees.

Thus, the Biden Administration’s own bank stress test proved that climate risk is not a material financial risk, and that the biggest financial risk at issue is that the Administration’s net-zero policies would result in massive financial losses for everyday Americans. The Biden Administration should stop using lies to support their burdensome policies, and blue states should drop their punitive lawsuits against oil and gas companies.  Otherwise, the result of both efforts will be to inflict high costs on everyday Americans without any benefit.