Climate Finance

Climatists’ Ulterior Motives

Posted on by Ron Clutz

Two articles caught my attention by looking behind the curtain seeing intentions obscured by appeals to Zero Carbon.  First  Chris Talgo writes at American Thinker Climate Alarmism is the existential threat to humanity.  Excerpts in italiics with my bolds and added images.

While in France observing the 80th anniversary of D-Day and honoring the thousands of brave soldiers who gave their lives fighting the existential threat that was Nazi Germany, President Joe Biden could not help himself from descending into crass political talking points by comparing the most destructive and deadly war in human history to climate change.

“The only existential threat to humanity, including nuclear weapons, is if we do nothing on climate change,” Biden declared. Due to the “existential threat of climate change, which is just growing greater, we’re working together to accelerate the global transition to net-zero. It is the existential threat to humanity,” Biden reiterated.

In reality, climate change is nowhere near an existential threat.

In fact, in many ways, the slight warming that has occurred over the past half century or so has made life better for humanity. For instance, NASA satellite data show a significant rise in global plant growth in recent decades — what some call global greening. A slightly warmer planet is also beneficial because it produces greater crop yields.

However, one can make a compelling argument that climate alarmism,
and the policies that climate alarmists support,
actually comprise an existential threat to humanity.

1. End Fossil Fuels On Which Modern Life Depends

First and foremost, climate alarmists are hellbent on ending the use of affordable and reliable energy in the form of fossil fuels. This alone is a horrendous stance that puts millions of lives at risk.

Like it or not, the advent of fossil fuels, namely oil, coal, and natural gas, has been the biggest boon for humanity in all of history. The harnessing of these resources to supply virtually unlimited energy in cost-effective terms has raised billions of people from abject poverty.

Without ample access to fossil fuels, our modern way of life would literally cease to exist. Not only do fossil fuels provide abundant and affordable energy. As the U.S. Department of Energy notes, “Petrochemicals derived from oil and natural gas make the manufacturing of over 6,000 everyday products and high-tech devices possible.”

2.  Rely on Renewable Energy, A Poor Substitute

Second, climate alarmists demand that the world immediately transitions to so-called renewable energy and achieve net-zero carbon dioxide emissions. The problem is that renewable energy from solar panels and wind farms is too expensive, unreliable, and not nearly scalable. If the world were to shun fossil fuels in favor of wind and solar, the amount of energy available to use would plummet. This would result in devastation across many fronts.

3. Diminish Human Populations and Livelihoods

Third, climate alarmists constantly call for degrowth, both in terms of the economy and in terms of population. Somehow, the climate alarmists have convinced themselves that the solution to the nonexistent problem of a slightly warming planet is for humanity to cull its population growth. This is extremely short-sighted and fails to consider that many developed countries are currently experiencing a stark population decline. If this is not reversed, and soon, many of these once-thriving nations will experience severe demographic problems.

Likewise, calls for economic degrowth, which has been a cause célèbre among climate alarmists for many years now, would wreak havoc and would instantly result in decreased living standards for billions of people. This is especially true for several developing countries, which are banking on economic growth and increased prosperity to lift billions from poverty.

4. No More “Better Things for Better Living”

Fourth and finally, climate alarmists, whether they realize it or not, are akin to modern-day Luddites because they excoriate innovations and technological breakthroughs. In many ways, climate alarmists are the opposite of progressives because they seek to regress humanity back to a time when creature comforts and access to the latest and greatest technologies were limited to a select few rather than accessible to the masses. Even worse, by hindering the development of new technologies that could solve some of the world’s most vexing problems simply because it does not align with their worldview, climate alarmists are essentially preventing the betterment of the human experience.

Fortunately, it seems like the climate alarmists are losing ground. Polls show that more and more people are skeptical of the constant fearmongering and are becoming aware of the failed doomsday predictions. This is great news, but it is just the start. Unless and until there is a general consensus that climate alarmism is the problem and that the misguided policies supported by climate alarmists are outright rejected by an overwhelming majority, climate alarmism will remain a grave threat to the future of humanity.

The second article is by David Wojick writing at CFACT A Socialist tract on fast decarbonization from the National Academies.  Excerpts in italics with my bolds and added images.

The title of this 800 page tome is “Accelerating Decarbonization in the United States: Technology, Policy, and Societal Dimensions” from the US National Academies of Science, Engineering and Medicine (NASEM).

I seldom use the term “socialist” but it is the perfect word here once the concept is updated. It originally referred to government ownership of the means of production. But in today’s Regulatory State, ownership is not required for control so it means government control of production, or more broadly government control of both production and use.

In this case it is government control of the production and use of what they call “the energy system.” Since everybody uses energy this includes control of everybody. Under the proposed system the government does not serve people it “manages” them, or at least their use of energy which is a lot of what we do.

They are however rather confused about this. The very first sentences state their basic assumption which is wildly false. They say this:

“The world is coalescing around the need to reduce greenhouse gas (GHG) emissions to limit the effects of anthropogenic climate change, with many nations setting goals of net-zero emissions by midcentury. As the largest cumulative emitter, the United States has the opportunity to lead the global fight against climate change. It has set an interim emissions target of 50–52 percent below 2005 levels by 2030 toward a net-zero goal.” (All quotes are from the Executive Summary.)

The United States has set no such targets. The US is a big country with hundreds of millions of people so it does not set targets. Perhaps they mean the US Government but Congress has set no such targets. In fact these so-called targets are merely the wishful thinking of the Biden Administration and their radical net zero colleagues which apparently include the National Academies. And if a Republican wins the next election it will not even be a Presidential wish.

So there is much less here than meets the eye. This tome is basically a radical socialist manifesto and that is how it should be read.

The funding is surprising. NASEM studies used to be done at the request of Congress or Federal Agencies and funded by them since objectively advising them is supposed to be the job of the Academies. Instead this work was funded by a collection of Foundations, presumably left wingers. So the National Academies are for hire by those with radical causes.

The socialist management thrust is exemplified by this topic
which is listed as a central theme:
“Managing the Future of the Fossil Fuel Sector.”
Only under socialism is this a government function.

That the called for management process is also non-democratic is made clear by this segment of their lead off discussion of risks: “In developing its findings and recommendations, the committee recognized the inherent risks and uncertainties associated with such an unprecedented, long-term, whole-of-society transition. These include … political, judicial, and societal polarization risk—that political and judicial actions or societal pressures will change the policy landscape….”

So elected officials, the Courts, or the people in general might get in the way. Their solution is not to get the support of the people, rather it is more management. They say “Mitigating these risks will require adaptive management and governance to coordinate and evaluate policy implementation and to communicate progress on outcomes.”

Sounds like the Plan is to manage the elections, the Courts and the people.
Sit down, shut up, and we will tell you what we have done as we go along.

For those interested in the details of the net zero wishlist this is a grand source. Otherwise it is just another radical manifesto to line the shelves with.

My concern is that the three National Academies have abandoned their mission and therefore lost their integrity. Tools of left wing foundations are not worthy of the name National Academy.

Sea Also:

Time for Billionaires to Fund Climate and Social Realism

 

Bogus Math for Climate “Reparations”

Posted on by Ron Clutz

Paul Mueller does the analysis in his AIER article Climate “Reparations” Numbers Are Rigged.  Excerpts in italics with my bolds and added images.

Nobel Prize–winning economist Esther Duflo thinks rich countries should pay poor countries $500 billion in compensation each year for climate-change damages. It is our “moral debt.” She proposes an international 2-percent wealth tax on the ultra-rich and an increase in the global minimum corporate tax rate to fund this $500 billion transfer.

You and I may be shocked by such a suggestion but don’t worry: “It’s really necessary. And it’s reasonable. It’s not that hard.” Only someone in an elite, progressive bubble could say something like that. Let’s check her reasoning.

Duflo claims that climate change creates costs, specifically through “excess” deaths due to excessive heat. Poorer countries from the global south near the equator will see more days of extreme heat, and so will see a disproportionate increase in excess deaths.

Other economists translated those deaths into an externality cost of $37 per ton of CO2. Multiply that by the roughly fourteen billion tons of CO2 emitted by the US and Europe and voila, wealthy countries generate $500 billion in externality costs per year.

She proposes paying for this by increasing the global minimum corporate tax rate from 15 percent to 18 percent and introducing an international 2-percent wealth tax on the ultra-rich, which she defines as the 3000 richest billionaires. We can’t go into the many problems and obstacles to such funding mechanisms here — suffice it to say such ideas will be nearly impossible to implement.

But Duflo’s back-of-the-envelope calculations, besides missing the bigger picture, are so speculative as to require playing make-believe. Let’s play along for a moment to see why. We’ll start by reverse-engineering her $500 billion number into a measure of harm.

Regulatory agencies and insurance companies use the concepts of “statistical value of life” or the “statistical value of a life-year” to do cost-benefit analysis on risk and the monetary value of life. These concepts are slippery, however, and calculated in a variety of ways with a wide range of estimates.

To keep things simple, let’s assume that the value of one life-year is $200,000. The $500 billion number proposed by Duflo suggests that the cost imposed by wealthy countries burning fossil fuels is the loss of roughly 2.5 million life-year” in poor countries per year.  That sounds like a staggering number!

But what about the benefits that have accrued to developing
countries from activities that generate CO2 emissions?

Important advances in medicine, such as antibiotics and vaccines, were developed in modern industrialized countries. So, too, were refrigeration, cars, the internet, smart phones, radar; modern agricultural methods with herbicides, pesticides, and fertilizers; improvements in plumbing, building materials, manufacturing, and much more. “Polluting” activities in industrialized countries improved nutrition and safety around the world. These advances, and many others, significantly increased people’s life expectancies — especially in poor countries.

Surely the value of these improvements should weight the opposite side of the scale from the expected harm of climate change — especially since the crusade against fossil fuels and carbon emissions will assuredly slow economic growth and innovation. Let’s consider the case of India for a moment.

Life expectancy in India has basically doubled from about 35 years in 1950 to about 70 years in 2024. If you consider that India has just over a billion people living in it, modern technology developed by rich CO2-emitting countries has added 35 billion life-years in India alone. 

Translating life-years back into dollars, 35 billion life-years times $200,000 per life-year means that the benefits from greater life expectancy in India over the past 75 years is the equivalent of $7 quadrillion dollars — or in annualized terms, an annual benefit of about $93 trillion dollars. In other words, the benefits to India alone are over a hundred times larger than Duflo’s estimate of costs!

Nor is India cherry-picked. China has a similar story with life expectancy rising from 43.45 years to 77.64 years. Similar improvements in life expectancy occur across the global south.

Of course, one could argue that developed industrial countries are not solely responsible for increases in life expectancy around the world. But one could just as easily say the same about whether developed industrial countries are solely responsible for global CO2 emissions, climate change, or harm to people in the global south due to hotter weather. Connecting these two issues makes perfect philosophical sense, because the production of CO2 has historically been directly associated with increases in economic growth; which in turn is necessary for all the developments increasing longevity around the world.

Even if we massage the assumptions in Duflo’s favor, the results remain favorable to industrialization. Suppose western technology and industrial activities contribute 50 percent to improvements in life expectancy. That’s still a $46 trillion annualized benefit to India. Reduce the value of a statistical life-year to $100,000 — that’s still a $23 trillion/year benefit from industrialization in the west. Exclude India from the analysis and cut the population we focus on down to 500 million people — that’s still over $12 trillion/year in benefits. Reduce the improvement in life-expectancy by six years — that still leaves about $10 trillion/year in benefits.

So, even after making tons of assumptions to reduce their size,
the estimated benefits of industrialization are still about twenty
times larger than Duflo’s estimate of its costs. 

Worrying about hypothetical, indirect costs of CO2 emissions when it comes to human well-being is like scrounging for pennies while ignoring $100 bills lying on the sidewalk. Actually, it is worse than that. It is like lighting $100 bills on fire to help you search a dark alley for some pocket change of human welfare.

Economic development, driven largely by Adam Smith’s dictum “peace, easy taxes, and a tolerable administration of justice” which includes strong private property rights and limited government intervention, has improved human living standards in unprecedented ways over the past 300 years. These remarkable improvements in human welfare are not limited to wealthy, developed economies but are enjoyed around the world. 

Duflo talks about the (external) costs of industrialization on certain countries without considering the truly massive (external) benefits of industrialization to those same countries.

If anything, with a proper accounting, developing countries owe rich countries gratitude for the benefits they have received from industrialization and the corresponding CO2 emissions.

 

 

Machinery for Global Sustainability Tyranny

Posted on by Ron Clutz

Terence Corcoran shines light on the emerging global control structure in his Financial Post article Is the global march towards sustainable development unsustainable? Excerpts in italics with my bolds and added images.

Regulations related to climate risks could prove a costly burden
for Canadian corporations, institutions

The planned reset of global corporate capitalism to save the planet continues to stumble toward the great unknown, in the sense that even after decades of effort the machinery to expand regulatory control over investment and business decisions remains bogged down in murky conceptual clay. Developments in regulatory and legal circles suggest 2024 will be a pivotal year for the revolutionary ideas that are supposed to lead to a fundamental transition from bad economic policy to green.

The underlying concepts are well known by name. We have corporate social responsibility (CSR), environmental and social governance (ESG), the precautionary principle, and sustainable development. What all these buzz-phrases mean is another question. Looking through the latest developments around the initiatives, however, a certain sense of apprehension, doubt and even a bit of squeamish uncertainty seem to have taken hold.
In recent days major global investment firms such as U.S.-based JP Morgan and State Street have pulled away from Climate Action 100+, a global industry-led coalition with grandiose objectives to fight the “systemic risks” of climate change. The claim is that investors must ensure the businesses they own have strategies that “accelerate the transition to net-zero emissions by 2050, or sooner, and align with the goal of the Paris Agreement” set by the United Nations in 2015.  Despite decades of talk following the radical Limits to Growth movement of the 1970s, the 1987 Brundtland report and the 1992 Rio Earth Summit’s endorsement of “sustainable development,” the remake of corporations into vehicles for economic and climate control remains far from complete.
In New York this week, the International Financial Reporting Standards (IFRS) Foundation held a symposium to inform corporations, institutions, regulators and advisors on the emerging accounting and reporting standards surrounding sustainable development. “Achieving a truly global baseline of sustainability-related disclosures necessitates a strong focus on supporting implementation across all economic settings, so that all market participants can access its benefits.”One of the symposium sessions was titled: “Get ready for jurisdictional adoption: How regulators are responding to the ISSB” — the International Sustainability Standards Board. Released last June, the ISSB standards will require corporations and investment organizations around the world to adopt common reporting approaches to climate and other environmental issues. It’s an authoritarian, top-down and anti-competitive regime that leaves no country or sector free to set its own rules.

All nations and regulators are to be locked in a global climate-control structure.

Canada is part of that structure through the Canadian Sustainability Standards Board, which this month announced a public consultation to advance adoption of sustainability disclosure standards in Canada. The consultation begins in March and runs through to June. One objective is to determine, with provincial securities regulators, how to impose mandatory reporting to replace voluntary standards on climate and environmental issues.

The Canadian Securities Administrators (CSA), which includes provincial securities commissions, is being pressured to take action on the grounds that Canada could get left behind. A paper released earlier this month by the Canada Climate Law Initiative at the University of British Columbia urged regulators to move forward quickly with new sustainability standards. Failure to act in concordance with the ISSB could cause Canada to lose international investment flows, the report claims.

The document continues through 20 pages of detailed recommendations covering climate-related strategies, investments, metrics, targets, performance, cash flows, scenarios, climate transition plans and science-based taxonomies. How any of this massive effort relates to corporate performance for shareholders is not addressed.

Looking to the future, the Law Initiative suggests the CSA should also begin thinking about requiring future reports  related to a corporation’s “relationship to terrestrial, freshwater and marine habitats, ecosystems and populations of related fauna and flora species, including diversity within species, between species and of ecosystems, and their interrelation with Indigenous and affected communities.”

Internationally, Canada must also deal with the uncertainty surrounding the differing emerging global standards, including the still-to-be-determined U.S. Securities and Exchange Commission (SEC) approach to sustainable development. As the consulting firm EY put it in an updated report last month, “Entities with significant operations in multiple jurisdictions need to understand the key differences among the SEC proposal, the ESRS [European Sustainability Reporting Standards] and the ISSB standards because they might be subject to more than one set of requirements.” Another EY report this week warns that sustainable development “continues to face a range of challenges” in terms of costs, technologies and standardization.

The legal proposals would burden Canadian corporations and institutions with massive reporting responsibilities and costs related to climate risks. On corporate governance, for example, the Climate Law Initiative calls for securities issuers to “disclose the governance processes, controls, and procedures it uses to monitor, manage, and oversee climate related risks and opportunities.”

All of this is taking place on a shaky theoretical foundation
in economics and environmental change.

The 1987 Brundtland Commission simplistically defined sustainable development as “development which meets the needs of the present without compromising the ability of future generations to meet their own needs.” Exactly what “needs” are is unclear. Maybe it was intended to capture Marx’s slogan: “From each according to his ability, to each according to his needs.” Meaning: Take from wants of the developed world and give to the needs of the developing world?

The missing fundamentals of the 50-year-old movement to reshape the corporate model should receive a little more attention in the months ahead. Could it be that sustainable development is unsustainable?

Postscript

Meanwhile, the sustainability movement is transitioning to students. In Kelowna, B.C., and Toronto this week the goal is to inspire the next woke generation of environmentally active citizens. At the Toronto event, the organizers summarized their plan. “We welcome high school students and their teachers to this dynamic one-day conference that brings together youth and community organizations from across Ontario to discuss, collaborate and learn how to make sustainable and equitable change in our world.”

 

 

 

‘Charities’ Spend Millions on Climate Change Lawfare

Posted on by Ron Clutz

In his article at The Hill Robert Stilson answers the question Why are ‘charities’ funneling millions into climate change lawfare? Excerpts in italiics with my bolds and added images.

Over the last several years, dozens of dubious climate change lawsuits have
been brought by state and local governments against the oil and gas industry.
They are bringing these cases with help from white-shoe law firms,
funded by non-profit money from Big Philanthropy.

Such attempts at “legislation through litigation” represent yet another example of the deeply regrettable tendency toward the ends-justify-the-means rationalizations common in contemporary political activism. The millions in tax-exempt philanthropic dollars apparently underwriting this lawsuit campaign also raise serious questions about the proper relationship between charity, politics and the judicial system.

Citing recently released tax filings, Fox News reported that the New Venture Fund, a registered 501(c)(3) charity and the largest constituent member of the giant left-of-center political nonprofit network managed by Arabella Advisors, had granted $2.5 million to the for-profit law firm Sher Edling in 2022. This was after it had funneled $3 million to the firm last year.

Sher Edling is best known for representing state and local governments in a slew of lawsuits against oil and gas companies, accusing them of downplaying or otherwise misrepresenting the impact that their products have on the global climate. The governmental plaintiffs (which include the states of Rhode Island and Delaware, the cities of Charleston, South Carolina and Baltimore, the county of Anne Arundel, Maryland, and others) are suing to force “Big Oil” to pay them compensation for the vast costs that these governments claim they are incurring due to climate change.

None of the plaintiffs have yet prevailed on the merits,
but the catch is they don’t necessarily need to. 

Activists hope that if just one case lands before “one judge in one state in one courtroom that sees a path to allowing these cases to go to trial,” discovery and the prospect of a jury trial could give them major leverage over the industry. The activists don’t necessarily need to win a verdict to achieve their ultimate objectives pertaining to future climate policy or legislation.

The money Sher Edling received from the New Venture Fund was apparently routed through one of the nonprofit’s countless fiscally-sponsored projects: the Collective Action Fund for Accountability, Resilience, and Adaptation. It has no website or other public profile, but grant descriptions explain that the fund’s purpose is to funnel charitable dollars to “enable cities, counties, and states hard hit by climate change to file high-impact climate damage and deception lawsuits represented by expert counsel.” This was formerly a project of a different 501(c)(3) called the Resources Legacy Fund, before switching its sponsorship to the New Venture Fund.

Notably, the Collective Action Fund has received
significant support from Big Philanthropy.

Major known funders include the MacArthur Foundation ($9 million since 2017) and the JPB Foundation ($3.3 million from 2020 to 2022, plus another $1.15 million approved for future payment), in addition to six-figure totals from the Hewlett Foundation, the Rockefeller Brothers Fund, and the Gordon and Betty Moore Foundation.

In an October 2023 letter responding to congressional inquiries, Sher Edling claimed that this philanthropic money does not underwrite specific lawsuits, but is instead used to support “the firm’s general operations in this area” — that is, climate litigation.

Because it would bypass the legislative process on a major issue of public policy, commentators have aptly labeled this whole phenomenon “legislation through litigation,” or even “lawfare.” They have raised important questions that more people should be asking. At least two overarching issues deserve particular mention.

The first concerns the nature of the lawsuits themselves. Climate change (and what should be done about it) is among the most contentious and consequential public policy issues of our time. The debate surrounding it involves major uncertainties and tradeoffs that carry with them direct personal ramifications for virtually every American. It is exactly the sort of issue that should be resolved though the political process, by voters and their elected representatives in Congress, not through a judicial process, by private lawyers and their ideologically motivated funders.

Moreover, it defies any notion of justice to hold the oil and gas industry civilly liable for producing and selling a product that is utterly essential to humanity’s survival — including these governmental plaintiffs’ own constituents. That is essentially what these lawsuits boil down to.

The second concern relates to the manner in which this litigation is evidently being at least partially financed. Big Philanthropy is routing millions of charitable dollars through a tax-exempt 501(c)(3) nonprofit to a for-profit law firm, for the purpose of supporting a nationwide litigation campaign. Is there a point at which such an arrangement ceases to be “charitable,” in the sense that we collectively understand that term? If so, what should we do about that?

Government lawsuits against the oil and gas industry over the alleged impacts of climate change rest upon an entirely unjust theory of liability. They are an affront to both the civil justice system and the democratic legislative process.

That they are apparently being underwritten by giant private foundations is further evidence of just how far Big Philanthropy has moved away from what most Americans would consider “charity.”

Keep Your Head, Others are Losing Theirs Over Climate

Posted on by Ron Clutz

John Stossel’s interview with Bjorn Lomborg is featured in his article at Reason The Media’s Misleading Fearmongering Over Climate Change. Excerpts in italics with my bolds and added images.

“Over the last 20 years, because of temperature rises, we have seen about 116,000 more people die from heat. But 283,000 fewer people die from cold.”

United States Special Presidential Envoy for Climate John Kerry says it will take trillions of dollars to “solve” climate change. Then he says, “There is not enough money in any country in the world to actually solve this problem.”

Yes, they are projecting more than 100 Trillion US$.

Kerry has little understanding of money or how it’s created. He’s a multimillionaire because he married a rich woman. Now he wants to take more of your money to pretend to affect climate change.

Bjorn Lomborg points out that there are better things society should spend money on.

Lomberg acknowledges that a warmer climate brings problems. “As temperatures get higher, sea water, like everything else, expands. So we’re going to maybe see three feet of sea level rise. Then they say, ‘So everybody who lives within three feet of sea level, they’ll have to move!’ Well, no. If you actually look at what people do, they built dikes and so they don’t have to move.”

Rotterdam Adaptation Policy–Ninety years thriving behind dikes and dams.

People in Holland did that years ago. A third of the Netherlands is below sea level. In some areas, it’s 22 feet below. Yet the country thrives. That’s the way to deal with climate change: adjust to it.

“Fewer people are going to get flooded every year, despite the fact that you have much higher sea level rise. The total cost for Holland over the last half-century is about $10 billion,” says Lomberg. “Not nothing, but very little for an advanced economy over 50 years.”

For saying things like that, Lomberg is labeled “the devil.”

“The problem here is unmitigated scaremongering,” he replies. “A new survey shows that 60 percent of all people in rich countries now believe it’s likely or very likely that unmitigated climate change will lead to the end of mankind. This is what you get when you have constant fearmongering in the media.”

Some people now say they will not have children because they’re convinced that climate change will destroy the world. Lomborg points out how counterproductive that would be: “We need your kids to make sure the future is better.”

He acknowledges that climate warming will kill people.

“As temperatures go up, we’re likely to see more people die from heat. That’s absolutely true. You hear this all the time. But what is underreported is the fact that nine times as many people die from cold…. As temperatures go up, you’re going to see fewer people die from cold. Over the last 20 years, because of temperature rises, we have seen about 116,000 more people die from heat. But 283,000 fewer people die from cold.”

A 2015 study by 22 scientists from around the world found that cold kills over 17 times more people than heat. Source: The Lancet

That’s rarely reported in the news.

When the media doesn’t fret over deaths from heat,
they grab at other possible threats.

CNN claims, “Climate Change is Fueling Extremism.”

The BBC says, “A Shifting Climate is Catalysing Infectious Disease.“

U.S. News and World Report says, “Climate Change will Harm Children’s Mental Health.”

Lomborg replies, “It’s very, very easy to make this argument that everything is caused by climate change if you don’t have the full picture.”

He points out that we rarely hear about positive effects of climate change, like global greening.

Spatial pattern of trends in Gross Primary Production (1982- 2015). Source: Sun et al. 2018.

 

“That’s good! We get more green stuff on the planet. My argument is not that climate change is great or overall positive. It’s simply that, just like every other thing, it has pluses and minuses…. Only reporting on the minuses, and only emphasizing worst-case outcomes, is not a good way to inform people.”

Synopsis of Lomborg’s Policy Recommendation (excerpted transcription)

If you’re a politician and you look at ten different problems, you’re natural inclination is to say, “Let’s give 1/10 to each one of them.” And economists would tend to say, “No, let’s give all of the money to the most efficient problem first and then to the second most efficient problem, and so on. I’m simply suggesting there’s a way that we could do much better with much less.

Of course if you feel very strongly about your particular area, when I come and say, “Actually, this is not a very efficient use of resources.” I get why people get upset. But for our collective good, for all the stuff that we do on the planet, we actually need to consider carefully where do we spend money well, compared to where do we just spend money and feel virtuous about ourselves.

If we spend way too much money ineffectively on climate, not only
are we not fixing climate, but we’re also wasting an enormous amount
of money that could have been spent on all these other things.

I’m simply trying to make that simple point, and I think most people kind of get that.  Remember, electricity is about a fifth of our total energy consumption. So, all everybody’s talking about is all the electricity, which is the easiest thing to switch over. But we don’t know anything about how we’re going to, know very, very little about how we’re going to deal with the other 4/5. This is energy that we use on things that are very, very hard to replace. So it’s a fertilizer that keeps 4 billion people alive. Making the fertilizer. It’s steel, cement, it’s industrial processes. Most of heating we use comes from fossil fuels, most transportation, that’s fossil fuels.

Know that if the U.S. went entirely net zero today and stayed that way for the rest of the century, consider how incredibly extreme this would be. First of all, you would not be able to feed everyone in the U.S. The whole economy would break down. You wouldn’t know how to get transportation. A lot of people would freeze. Some people would fry. There would be lots and lots of problems. But even if you did this and managed to do it, the net impact, if you run it through the U.N. climate model, is that you would reduce temperatures by the end of the century by 0.3 degrees Fahrenheit. We would almost not be able to measure it by the end of the century. It would have virtually no impact.

Look, again, we’re rich and so a lot of people feel like you can spend money on many different things. And that’s true. I’m making the argument that for fairly little money, we could do amazing good. If we spent $35 billion, not a trillion dollars, just $35 billion, which is not nothing. I don’t think, neither you or I have that amount of money. But, you know, in the big scheme of things, this is a rounding error. $35 billion could save 4.2 million lives in the poor part of the world, each and every year and make the poor world $1.1 trillion richer.

I think we have a moral responsibility to remember, that there are lots and lots of people, so mostly about 6 billion people out there, who don’t have this luxury of being able to think 100 years ahead and think about a little bit of a fraction of a degree, who wants to make sure that their kids are safe.
And so, the next money we spend should probably be on these very simple and cheap policies.

 

Fighting Global Warming: All Cash, No Cooling

Posted on by Ron Clutz

Through Dec. 12, the “Climate!” crowd is swarming COP28, Dubai’s carbophobia cavalcade. The fact that these global-warming alarmists are surrounded by Earth’s deepest pools of fossil fuels makes their Hajj infinitely ironic.

Also astonishing is the nearly immeasurable impact of these people’s gyrations. They blow trillions of dollars, bludgeon human freedom, and yet do shockingly little to fix their vaunted “climate crisis.”

One practically needs an electron microscope to find their promised
reductions in allegedly venomous CO2 or supposedly lethal temperatures.

According to #ActInTime’s Climate Clock, high above Manhattan’s Union Square, humans have — at this writing — five years and 227 days until we boil to death in a cauldron of steaming carbon. Since The End is scheduled for Saturday, July 21, 2029 (mark your calendars!)

Big Government Democrats offer jaw-droppingly paltry climate benefits,
despite their spine-chilling predictions and unbridled interventionism.

Clean Power Plan Cost/Benefit

Obama-Biden’s proposed Clean Power Plan was a diamond-encrusted specimen of do-nothingism. According to a May 2015 analysis by their own Energy Information Agency, between 2015 and 2025, the CPP would have slashed real GDP by $993 billion, or an average of $39.7 billion per year.

It would have sliced real disposable income by $382 billion, or $15.3 billion annually. It also would have chopped manufacturing shipments by $1.13 trillion, or $45.4 billion per year.

EIA forecast a decrease of 0.035° Fahrenheit. This would have cranked a thermometer from 72° F way down to 71.965°.  As Billy Joel once sang, “Is that all you get for your money?”

IRA Funded Green Energy Projects Cost/Benefit

Biden’s blessed Inflation Reduction Act budgeted $369 billion for green-energy projects. Goldman Sachs subsequently slapped a $1.2 trillion price tag on the IRA.

Danish environmental expert Bjorn Lomborg ran the IRA through the United Nations’ climate models. “Impact of new climate legislation,” Lomborg specified.  “Unnoticeable: 0.0009°F to 0.028°F in 2100.”  This would chill thermostats from 72° to 71.9991°. If we get lucky: 71.972°.

Biden said on Jan. 31 that “if we don’t stay under 1.5° Celsius” or 2.7° Fahrenheit, “we’re going to have a real problem.” If a 0.0009° F reduction costs $369 billion, then Biden’s 2.7° F goal would devour — brace yourself — $1.107 quadrillion — with a Q.

Biden EV Mandate Cost/Benefit

Emperor Biden’s electric-vehicle decree would require that at least 67% of new cars sold in 2032 be electric. This edict already is stalling the auto industry. On Nov. 29, 3,902 U.S. car dealers in all 50 states wrote Biden. Message: Stop tailgating!  “Already, electric vehicles are stacking up on our lots,” the dealers complained.  “The majority of customers are simply not ready to make the change.”

This chaos aside, Biden’s mandate would limit CO2 by 10 billion tons through 2055. Alas, China is expected to generate 320 billion tons of carbon in the next 32 years. So, Biden’s “savings” will asphyxiate in a giant Chinese carbon cloud.

Holman Jenkins of The Wall Street Journal calculates that Biden’s EV order will decrease planetary emissions by a whopping 0.18%. “The climate effect of the extravagantly expensive Biden plan will steadily approach zero,” Jenkins anticipates.

Bans on Gas Stoves and Heaters Cost/Benefit

Rather than jail criminals or deport illegal aliens, Governor Kathy Hochul, D-N.Y., bans gas stoves and demands that gas heaters yield to electric heat pumps — never mind that her constituents freeze to death during post-blizzard blackouts.

“The global effect of the costly program of compulsory electrification will be a reduction in greenhouse gas emissions of less than 0.05%,” the Empire Center for Public Policy calculates.

Summation

Obama, Biden, Hochul and their comrades might respond that no single bauble will fix everything, and every shiny object helps.  Maybe.  But these four schemes alone carry an enormously high price in shredded freedom and incinerated taxpayer dollars, yet still leave at least 99.82% of emissions untouched.

To quote another Briton, William Shakespeare, perhaps this “sound and fury, signifying nothing” is not about cutting emissions or curbing Earth’s temperatures.

Maybe it’s designed to help Democrats spend trillions of dollars to signal virtue, bark orders at the American people, and lavish taxpayers’ hard-earned cash on their politically connected pals — from the Potomac to the Persian Gulf.

Footnote:  

The estimates of lowering temperatures come from IPCC-approved models, which presume that Global Mean Temperature (GMT) rises in response to rising atmospheric CO2.  In fact that premise is itself dubious since basic physics requires that a cause precede an effect in time. The evidence points to changes in CO2 lagging rather than leading GMT changes.  This is true on all time scales, from last month’s observations to ice cores spanning millenia.

Confirmed: Temperature Drives CO2, not the Reverse

Biden’s EV Boondoggle Enriches Himself

Posted on by Ron Clutz

The Greenest thing about the New Green Deal is the Money.

The spending on “Green Energy Projects” is enormous and uncontrolled.  Larry Behrens explains at Real Clear Energy Too Favored to Fail:” Taxpayers Bailout Biden’s Green Friends.  Excerpts in italics wtih my bolds.

While America struggles to buy groceries, President Joe Biden has a
green slush fund worth billions of dollars, and he’s not afraid to use it.

Billions Disappear with Rivian Bankruptcy

Recent revelations uncovered that the CEO and lobbyists of Rivian, an electric vehicle manufacturer, held a quiet meeting at the White House with Biden’s Climate Czar, John Podesta. That’s right, the same John Podesta who served as chairman of Hillary Clinton’s ill-fated 2016 presidential campaign before being pulled from the ranks of profitable green consulting to oversee distribution of $369 billion from the Inflation Reduction Act (IRA). Biden selected a political operative with green company ties to dole out the goodies from one of the largest slush funds in history. Now green CEOs who are hemorrhaging cash are beating a path to his White House office, presumedly with hat in hand.

According to media reports, Rivian is deep in the red. Last year, they lost $6.8 billion. In 2021, it was $4.7 billion, which is in addition to the $1 billion lost in 2020. These massive losses happened as EV manufacturers enjoyed large subsidies both to build and sell their vehicles. In fact, President Biden went out of his way to praise Rivian in early 2022, even though their stock had already lost half its value on its way to losing 87% of its value since 2021. Losing over $12 billion in less than three years would normally be a problem in the business world, but in the upside-down reality of Biden’s green agenda, that gets you a meeting at the White House.

Tax dollars are flowing from the IRA so quickly that the Department
of Energy’s Inspector General (IG) may be running out of adjectives.

Earlier this month in testimony before the Senate, the IG said, “the current situation brings tremendous risk to the taxpayers.” Red flags about American dollars flowing to foreign companies or just being wasted here at home are going up, yet according to budget watchdogs, their concerns are met with deaf ears by senior Biden Administration officials. The IG notes there were “billions and billions of dollars lost or stolen” from federal Covid funds, and Biden’s slush fund is even bigger. To put it bluntly, the green vault is wide open and the grifters are lining up.

“Green Banks” Dole Out Taxpayer Cash

Here’s a particular galling example. One little known aspect of the IRA are so-called “green banks.” For greenies, the scheme is simple: regular banks will not fund their boondoggles, so they need a taxpayer backed entity to dole out cash. Unlike regular banks, these green banks do not need to make a profit to stay afloat because the government is their funder.

New Mexico Governor Michelle Lujan Grisham was caught trying to set up a green bank without the trouble of going through the elected legislature. The board of the bank will be green non-profits who will be in charge because as the New Mexico climate czar put it, “We’re talking about hundreds of millions of dollars…This greenhouse gas reduction fund is a remarkable little beast.” Recently, Grisham announced the green bank anyway. The slush fund is open for business, and everyone has their hand out.

Congress is watching the “green bank” scheme because they know it is ripe for abuse. The problem is clear: The White House put a political operative in charge of what is nothing more than a political fund. For Barack Obama, they were too big to fail, but Joe Biden is taking it further. When it comes to his failed agenda, his green boondoggles are “too favored to fail.”

Biden’s Wasted EV Subsidies Eclipse Solyndra

Helen Raleigh reports at The Federalist The Biden Administration’s Electric Vehicle Subsidies Are Becoming Another Solyndra.  Excerpts in italics wtih my bolds.

Energy Secretary Jennifer Granholm made $1.6 million from
an electric car company the Biden administration boosted
that just went bankrupt.

Proterra, an electric bus and battery company that President Joe Biden touted as a success of his green energy initiative, filed for bankruptcy in August. Last week, it finally sold its embattled battery business at a rock-bottom price as part of the bankruptcy proceeding. The rise and fall of Proterra demonstrates once again that politicians should refrain from betting taxpayers’ money on business ventures to advance their political agenda.

According to the Wall Street Journal, Proterra has sold only 550 electric transit buses since its founding in 2004. Most of the sales were underwritten by government agencies with federal grants. Proterra’s electric buses were plagued with mechanical defects and other performance issues, such as limited range and long charging times. Besides government subsidies, the company only survived as long as it had due to powerful political connections. Former Michigan governor Jennifer Granholm, Biden’s energy secretary, served on its board.

Despite all the quality issues of its EV buses, Proterra went public in January 2021 and raised $650 million, more than three times its annual revenue. A month after the company’s IPO, Biden tapped Granholm as his energy secretary. Proterra’s political connection to the Biden administration paid off in many ways.

Surviving on Grants and Tax Credits

In April 2021, Biden took a virtual tour of a Proterra facility to promote his infrastructure plan. The proposal included $6.5 billion in grants to help replace diesel-powered school and transit buses with electric ones. During the tour, Biden lauded Proterra for “getting us in the game.” He predicted that Proterra and other electric vehicle companies would “end up owning the future.”

Biden’s 2022 Inflation Reduction Act further enriched Proterra’s coffer. The law had little to do with reducing inflation, but it gave massive government handouts to the green energy sector. For instance, IRA includes a $40,000 per vehicle tax credit for purchasing electric commercial vehicles and an additional tax credit for EV batteries.

Proterra admitted in its quarterly report that “the availability of this new unprecedented level of government funding for our customers, suppliers, and competitors to help fund purchases of commercial electric vehicles and battery systems will remain an important factor in our company’s growth prospects.” Proterra’s political profile rose even more after Biden appointed Gareth Joyce, CEO of Proterra, to serve on the President’s Export Council in February this year.

Backed by Biden, Buried by Biden

Excessive government spending under Biden has sparked high inflation rates that were last seen in the 1970s. To bring inflation rates down, the Federal Reserve has aggressively raised interest rates. Higher rates increased production and operations costs for many companies. As legendary investor Warren Buffett famously said, “Only when the tide goes out do you learn who has been swimming naked.” Proterra was one of those companies that had been caught “swimming naked” in this new environment.

The company struggled because it had difficulty passing rising costs on to its existing customers, since most were government agencies with little budget flexibility. Nor could Proterra outsource its production overseas or import components at lower costs. Receiving government grants comes with strings attached. One requirement is that companies like Proterra must produce at least 70 percent of their EV components in America. Proterra couldn’t afford to cut the prices of its EVs to drum up sales.

Finally, Proterra filed for bankruptcy in August. Government subsidies could not offset the financial pressure of rising inflation, higher interest rates, and falling sales. Last week, a Swedish automobile manufacturer, Volvo, bought Proterra’s battery business for $210 million, a great deal considering Proterra was valued at $1.6 billion a year ago.

Another party who got an excellent deal was Granholm. She sold her Proterra shares for $1.6 million last year. They would have been worth nothing if she had held on to her Proterra shares until this

August. The biggest loser of the whole Proterra saga is American taxpayers.

No Good News for Electric Vehicles

Proterra was not the only EV company that went under. Michigan-based Electric Last Mile declared bankruptcy in June 2022. Ohio-based Lordstown Motors went bankrupt a year later. Ironically, these companies benefited from the Biden administration’s climate handouts, but the economic consequences of the same policies eventually doomed them. Even large automobile companies’ EV units are struggling. Ford estimates it will lose $3 billion this year on its EV business. The company relies on sales of gas-powered vehicles and government subsidies to keep the EV business afloat. 

What’s In This for the Bidens?

Fred Lucas explain in his Daily Signal article Hunter Biden’s Cobalt Deal With China Increases Cost of His Father’s Push for Electric Cars.  Excerpts in italics with my bolds.

Presidential son Hunter Biden’s most recent controversy—assisting a Chinese company’s purchase of a large cobalt mine—is linked directly to a top Biden administration policy of promoting electric vehicles.

Cobalt, a relatively rare and expensive mineral, is an essential part of batteries used to power electric automobiles. The COVID-19 pandemic also made U.S. officials and the public much more aware of Communist China’s control of the supply chain for drugs and other products.

The younger Biden, 51, is a one-time partner in China-based Bohai Harvest RST, known as BHR, and reportedly remains a stakeholder. 

The New York Times first reported over the weekend that BHR facilitated mining company China Molybdenum’s $2.65 billion purchase of a cobalt and copper mine from an American company, Freeport-McMoRan. 

Rep. Ken Buck, R-Colo. told The Daily Signal,

The latest news [that] he assisted a Chinese company purchase one of the largest cobalt mines is another example of Hunter Biden using his influence to line his pockets and help a foreign adversary. Conducting oversight of Hunter Biden’s questionable ethics and dealings that undermine our national security will continue to be a top priority for Oversight [Committee] Republicans.

The committee’s ranking Republican, Rep. James Comer, R-Ky., tweeted: “By helping Chinese companies mine rare minerals in Congo, Hunter Biden is helping Communist China corner the Electric Vehicle market that @POTUS is subsidizing here at home.” 

Summary:

The campaign is to force electric vehicles upon Americans who otherwise do not want them.  And why?  It’s not about climate change, not about the environment.  It’s about greed not green.

 

 

Green Crash Ahead

Posted on by Ron Clutz

Duggan Flanakin writes at Real Clear Energy Climate Enron May Be Heading for a Crash.  Excerpts in italics with my bolds and added images.

Today, the collapse of FTX and the recent criminal conviction of founder and CEO Sam Bankman-Fried (who is facing a lifetime behind bars) brings Enron, Skilling, and Lay to mind. But, despite the magnitude of SBF’s fraud, it pales in comparison to the ongoing fraud being perpetrated mostly on America and its Western allies in the name of “climate change.”

A bit like FTX, but unlike Enron, there are plenty of warning signs that the “Green Revolution” is about to come tumbling down and its loudest advocates brought to account. The main thing keeping the mirages afloat today is the massive egos and their investments in folly that may leave them going down with the ship.

While the “Green Revolution” has been under way for decades, it is the Biden Administration that has imposed mandates, attacked popular energy sources and transportation options, and waged war against traditional industrial development. Europeans and states like California had earlier imposed their own mandates with supposedly “hard” deadlines for abolishing the use of oil, natural gas, coal, and every tool or vehicle that uses them.

The green war on fossil fuels, as fleshed out in the “Net Zero” campaign,
is perhaps history’s greatest example of philosophical fraud.

And the corollary: Reality is also that which happens instead of what you wanted and expected. 

“To dream the impossible dream” and turn it into reality would mean sacrificing an estimated 6,000 useful products that rely on byproducts from crude oil refineries – products that range from asphalt for highways to fertilizers, cosmetics, synthetic rubber, medicines and medical devices, cleaning products, plastics, so many more. The 3 billion who live without the benefits fossil fuels have provided are also the poorest, sickest, and most vulnerable humans on the planet.

Cracks are already developing in the “Net Zero” world, what with countries backing away from the mandates they so recently touted while marching around like peacocks in mating season. In March the European Union reached an agreement with Germany to formally back away from its total ban on internal combustion engines in 2035.

Still, 30 countries are signatories to the Glasgow Declaration that would force all vehicles sold by 2040 to have zero carbon dioxide emissions, and 21 others have crafted plans to ban new ICE vehicle sales earlier than 2040. Dozens of major cities and states, most notably California and the California clone states, intend to disallow new ICE vehicles by 2035.

Several problems stand in the way of their utopian dream. Even EV advocates are now admitting the “EV-olution” has to overcome “serious issues” – like the use of child labor in lithium mining, the woefully inadequate EV charging infrastructure, and an unprepared power grid. Yet the biggest obstacle is that a majority of the Earth’s people object to having EVs – or heat pumps, or electric stoves, and so on — shoved down their throats.

EVs may be fine for short-trip urban travel but not for construction equipment, airplanes, or even urban buses, as evidenced by the recent horrific scene in San Francisco when a Google-operated electric bus lost power and slid backwards downhill into nine vehicles. Today’s EVs are wholly impractical for mountain and prairie residents or others making long trips (worse with children).

Like Ken Lay with Enron, the Green revolution has relied heavily on government subsidies and a “revolution always” business philosophy aimed at making pariahs of anyone who dares oppose the grandiose – but fatally flawed – plan.

During the Obama Administration, Solyndra went under despite a $535 million government-guaranteed loan, none of which was paid back. Forbes, citing OpenTheBooks.com, noted that taxpayers were left holding the notes for $400 million given to Abound Solar, $280 million wasted by CaliSolar, $193 million doled out to Fisker Automotive (with another $336 million canceled), and $132 million to A123 Systems (a failed battery maker).

Undaunted, the Biden Administration’s $2.3 trillion “jobs” package was rife with more subsidies for technologies that by their own admission are unsustainable. Yet despite all the free money, Ford, General Motors, and many other automakers are backing away from multibillion-dollar investments in new EV factories as new EV sales have slowed despite increased rebates.

Ford in March projected a loss of $3 billion on electric vehicles in 2023, offsetting profits of as much as $14 billion from its other divisions. Ford also admitted losses of $900 million in 2021 and $2.1 billion in 2022 in its EV division. Ford and GM believe their EV fortunes will turn around by 2025, but those rosy scenarios seem wholly dependent upon Biden (or an even “greener” Democrat) winning the White House next November.

Even with a Green win in 2024, reality will still bite the EV dream. China has been quietly moving toward total dominance in the global EV marketplace – largely because it controls the lithium battery market. Financial Times wrote in September that China is so far ahead in the EV market that its competitors are trailing in the dust.

Biden’s reliance on huge subsidies to underwrite the “Green Revolution” has brought soaring inflation to the U.S. that is taking away purchasing power faster than it can increase subsidies and Mafia-style “incentives” (you will buy what we want you to buy, or else!).

Lay died of a heart attack shortly after his trial, leaving behind “a legacy of shame” characterized by “mismanagement and dishonesty” that led Politico to rank him as the third-worst American CEO of all time.

America’s doddering President Biden, now facing pre-impeachment hearings for other alleged mistakes, may not live to see his name smeared as Lay’s once was. But does anyone truly believe Biden is calling all the shots here?

Who will, then, get the blame if America’s forced march to
EV subservience to Xi’s China brings an end to
America’s hegemony on the world stage?

SEC Rule on ESG Reporting: Going Too Far?

Posted on by Ron Clutz

Based on a non-fiction book of the same name by historian Cornelius Ryan, A Bridge Too Far is a 1977 epic war film depicting Operation Market Garden, a failed Allied operation using paratroopers to secure three bridges over three key rivers in Nazi-occupied Netherlands during World War II.  The phrase has come to mean “a long shot”, or an overly ambitious plan.

The metaphor can now be applied to 2023 regarding the onslaught of ESG bureaucratic regulation burdening enterprises around the world. Jon McGowan explains in his Forbes article The SEC’s New Rule May Inadvertently Kill ESG Funds.  Excerpts in italics with my bolds and added images.

 Securities and Exchange Commission recently announced a rule requiring environmental, social, and governance funds to be 80% aligned with the fund’s stated goals. This could reveal a long-held secret of ESG funds: to be competitive, they are packed with more profitable investments that are not green.

ESG is a type of investing where non-financial factors
are considered in the decision-making process.

ESG has grown quickly over the past few years, pushed by global action to meet the net zero goals of the Paris Accords. Globally, those non-financial factors are primarily focused on sustainability. However, in the US there has been an added focus relating to LGBTQ+ issues that some have deemed political, causing controversy.

The growth of ESG has sparked regulation for sustainable reporting standards for businesses. The European Union was the first, with the European Sustainability Reporting Standards that were approved in July and set to go into effect January 1. The ESRS will require publicly traded and large privately held companies to report greenhouse gas emissions, actions taken by the entity to reduce GHG emissions, and other green policies. Eventually it will expand to small and medium-sized enterprises. While reporting will be mandatory, no environmentally friendly action is required. The SEC is set to release similar standards for the US in October.

[Note: Bloomberg reports this week Banks May Escape EU’s Toughest ESG Regulation So Far  Lawmakers, member states are negotiating due diligence rule
Firms face new civil liability, large fines under the proposal

and EU Exchanges Face Delistings as ESG Rules Hit Multinationals
Non-EU firms are waking up to January compliance deadline
EU’s corporate reporting rules have met widespread opposition]

The increased interest in ESG caused fund managers and businesses to adjust their practices. This sudden shift raised concerns of greenwashing, or the exaggeration of environmentally friendly initiatives to appear greener than they actually are. A new term, climate washing, has recently developed that is specific to the exaggeration of climate change initiatives.

Greenwashing for marketing purposes, while misleading, rarely met the standard of a regulatory violation. However, when greenwashing is directed at investors it could violate financial regulations and fall under the authority of the SEC. The SEC recently fined Deutsche Bank’s investment arm, DWS, $19 million for “materially misleading statements” relating to greenwashing in ESG funds. However, enforcement is problematic as the threshold for what constitutes greenwashing was not previously defined.

That changed when the SEC announced a new rule that requires ESG funds to match at least 80% of their portfolio with the stated goals of the fund. This new rule came just weeks after the SEC issued a round of subpoenas to an unknown number of fund managers relating to their ESG fund practices.

While the 80% requirement will settle greenwashing concerns,
it could be problematic for the viability of ESG funds.

Environmentalist and aligned organizations have frequently expressed concerns that some ESG funds were stacked with investments that were contrary to sustainable goals. A 2022 study by ESG Book found that ESG funds on average produced 14% higher GHG emissions than traditional funds. The same study found ESG funds investing in mining and fossil fuels, including Shell, Exxon Mobile, and BHP Group. The ESG Book study is not alone or new. Multiple studies have been released by environmental think tanks chastising ESG funds for not being sustainable.

Fund managers are placed in a precarious position of trying to offer
environmentally friendly funds, while also
meeting their fiduciary duty to maximize returns.

In doing so, they are forced to offset the underperformance of sustainable investments with investments in companies that are high profit, but contrary to the green goals. The result is funds that are not truly green, but greenish.

The new SEC rule will force fund managers to limit that practice to 20% of the fund. The unsettled question is how that will impact returns. ESG funds already underperform compared to traditional funds, the 80% rule may make them no longer a viable investment.

Background:

SEC Warned Off Climate Disclosures

 

 

 

 

 

 

Follow the Climate Money Updated

Posted on by Ron Clutz

To enlarge, open image in new tab.

Why climate-finance ‘flows’ are falling short of $100bn pledge  is an informative article from CarbonBrief.  Excerpts below in italics followed by a comment from Bjorn Lomborg.

One of the biggest and most contentious issues in climate politics is the provision of money to help poorer countries cut emissions and protect themselves from climate impacts.  In 2009, wealthy nations pledged to “mobilise” $100bn in “climate finance” annually by 2020 to help vulnerable nations deal with climate change.  As the title notes, even now the target has not been met.

Politicians and observers have warned that this failure could undermine trust between nations as they head into negotiations in Dubai. What is more, there are widespread concerns about the quality of finance being offered, with questions surrounding the use of loans instead of grants, different definitions of “climate finance” and insufficient funding for adaptation efforts.

In this article, which updates and builds on a previous analysis published in 2018, Carbon Brief assesses the state of international climate finance as nations prepare for the next COP.  It uses the latest numbers collated by the Organisation for Economic Co-operation and Development (OECD), a club of mostly wealthy nations, many of which are responsible for contributing climate finance.

The OECD, a Paris-based intergovernmental economic organisation, asks its 36 member countries to report on their foreign aid, including climate finance. The data captures climate finance that is both bilateral (country to country) and multilateral (via international institutions) It also gives detailed information about funded projects. (The OECD calls this database “climate-related development finance” rather than strictly climate finance).

Key takeaways from 2015-2016 Report
  • Donor governments gave climate finance totalling $34bn in 2015 and $37bn in 2016, according to OECD estimates (note that this is not a full estimate of money counting towards the $100bn pledge – see below for more).
  • Japan was the largest donor, giving $10.3bn per year (bn/yr) on average over the two years. It was followed, in order, by Germany, France, the UK and the US.
  • India was the largest recipient on average, receiving $2.6bn/yr. It was followed, in order, by Bangladesh, Vietnam, the Philippines and Thailand
  • The single largest “country-to-country” flow was an average yearly $1.6bn from Japan to India.
  • The US was the top contributor to the multilateral Green Climate Fund (GCF) in 2016. (However, the US has now ended its support for the GCF).
  • Around $16bn/yr went to mitigation-only projects, compared to $9bn for adaptation-only projects.
    Around 42% of the finance consisted of “debt instruments”, such as loans.

Key takeaways from 2018-2019 Report
  • In 2019, the OECD found that climate finance had reached $79.6bn, up just 2% from 2018, and while official figures for 2020 are not yet available, Bloomberg reported that rich countries reckon they had raised $88-90bn, as of October 2021.
  • The shares attributed to countries are based on analysis by the World Resources Institute (WRI) of bilateral and multilateral development funds that can be traced to Annex II nations. These roughly align with the OECD’s figures, which are not broken down by country but, like the WRI’s, are partly derived from Annex II nations’ reports to the UNFCCC.
  • The remaining finance, indicated by the grey bars in the chart above, is made up of export credits, additional outflows from multilateral institutions and, most of all, private contributions by businesses and philanthropic groups (this is an approximation based on the OECD’s total values with the WRI estimates removed).
  • Private funds count towards the $100bn target, but the WRI did not include them in its analysis as the data is less complete and difficult to attribute to individual nations. The OECD estimates that annual private finance has been stable at around $14bn since 2017.
  • The top five finance providers – Japan, Germany, France, the UK and the US – have remained the same since Carbon Brief’s last analysis for 2015/16. These five nations contributed more than 60% of the 2018/19 finance.  While Japan, Germany and France appear to be by far the biggest contributors, the WRI warns that the lack of clarity around climate finance reporting means the numbers should be approached with caution.
  • As in Carbon Brief’s previous analysis, India was by far the biggest recipient of climate finance, with more than double the funds received by the next largest, Bangladesh. Japan and Germany provided about 94% of the funds to India, almost all in the form of loans.
Implications

Climate finance figures are widely contested, with many global-south nations questioning how much funding is new and not simply diverted from other development funds. Criticism has also been levelled at the overreliance on loans and the inclusion of support for “high-efficiency” coal plants by Japan and Australia.

A recent assessment prepared by the UNFCCC’s Standing Committee on Finance concluded that developing countries require $5.8-5.9tn up to 2030 in order to fund less than half of the actions outlined in their official climate plans – although some of this would be funded domestically.

This year’s negotiations are likely to spark calls for a significant scaling up of finance, although the slow pace of proceedings means that, for the time being, the focus of new goal discussions will primarily be on agreeing a framework for future talks.

Nevertheless, there are various issues that could be on the table during this next phase, including ensuring that more money is spent on adaptation.

The Paris Agreement specifies that climate finance should aim for an even split between these two categories, but funding has long been skewed towards mitigation. According to Jan Kowalzig, a senior policy adviser at Oxfam, governments often tend to view such projects as more attractive investments:

“Since [mitigation projects] often have to do with energy, they seem to be more directly linked to a country‘s development, even though, of course, this is a huge misconception given the central (but, for politicians, often less visible) role of adaptation.”

Of the roughly $40bn average for the 2018/19 period, 39% of money went on mitigation, while just 25% went on adaptation – a slightly more even split than was recorded in Carbon Brief’s previous analysis for 2015/16.

However, other estimates, including the OECD’s own climate finance report, suggest a more pronounced split, with around three times as much finance going to mitigation than adaptation in 2018 and 2019.

This imbalance is a major concern amid rapidly escalating climate costs. The UN Environment Programme places current annual adaptation costs for “developing countries” at $70bn, but says they will reach $140-300bn by 2030.

Ensuring adequate adaptation finance in the coming years is, therefore, seen by many vulnerable nations as a key priority for post-2025 climate finance plans as they are developed.

Climate Money Could Be Better Spent

Bjorn Lomborg When it comes to climate change, let’s get our priorities straight

We must also bear in mind that global warming is not the planet’s only challenge. We often hear that it is the defining issue of our time, but it is no such thing. By the 2070s, the IPCC — the U.N. climate change panel — estimates that warming will cost between 0.2 and 2 percent of global GDP. This is certainly a problem, but not the end of world.

Speaking of climate change in catastrophic terms easily makes us ignore bigger problems, including malnutrition, tuberculosis, malaria and corruption. The World Health Organization estimates that climate change since the 1970s causes about 140,000 additional deaths each year, and toward the middle of the century will kill 250,000 people annually, mostly in poor countries. This pales in comparison with much deadlier environmental problems such as indoor air pollution, claiming 4.3 million lives annually, outdoor air pollution killing 3.7 million and lack of water and sanitation killing 760,000. Outside of environment, the problems are even bigger: Poverty arguably kills 18 million each year.

Every dollar spent on climate change could instead help save many more people from these more tractable problems. The current approach to subsidize solar and wind arguably saves one life across the century for every $4 million spent — the same expenditure on vaccinations could save 4,000 lives. Each person — and the next president — needs to decide his or her legacy.

Postscript: Financing for Climate Aid is a Fraction of the Full Cost of Climate Crisis Inc.

A fuller accounting of the climate crisis industry more likely exceeds 2,000,000,000,000 US$ per year (2 Trillion)
See Climate Crisis Inc. Update