Doomed Planet

Climate Hysteria: Follow the Money

Not content with reducing fiat currencies to the status of a zero-interest crypto-token over the past decade, the world’s central banks, including our own Reserve Bank, seem poised to take another radical step: underwriting the green fantasy of a global zero-emissions utopia.

Why not? With both monetary and climate models deeply flawed and lacking real predictive power, embarking on such a quixotic adventure would be one way to end – or at least temper – growing concern over their credibility. It would, of course, be packaged as an urgent move to ensure “financial stability”, a vital part of the international mission to save humankind from itself.

In case you missed the warning on September 30 last year, we face the threat of “runaway climate change” – whatever that is – if nothing is done. Only ten years, we are told, separates us from the boiling-frog demise. It must be true; the Secretary-General said so.

How did we get to this point? The climate endgame has always been about money. An international network of financial-sector “actors” and activists have become more cunning, more impatient, more strident – and more apocalyptic – in recent months. Sensing their pot of gold – monetizing the Earth’s atmosphere in the name of “climate-protection”- might be receding out of reach, the Orwellian United Nations Ministry of Climate has ratcheted up the rhetoric. Suddenly, it’s a “climate emergency”.  It must be true; everyone from the UK government to your local council now says so.

In a rational world, antics like this – and the Greta Thunberg phenomenon – would be sufficient to give the game away, and expose all the folk propagating, and profiting from, pseudoscience. Climate politics today, however, operates in a different space, one where anything goes, including brainwashing children. Indeed, this low tactic has become a key part of the alarmist strategy.

It began a decade ago at the Copenhagen UN COP-15 conference. In the event’s opening video a frightened girl – younger than the 16-year-old Ms Thunberg — clutches a white (polar) teddy bear. She goes on a nightmarish journey through a world of eco-mayhem and environmental catastrophe, including an apparently climate-induced mini-earthquake. The climax comes when she pleads: “Please help the world”. A background chorus warns of “hundreds of millions of climate refugees”. It chastises those who “still doubt the human influence on this predicted catastrophe.” The four-minute mind-bomb ends with what some psychoanalysts would describe as an infantile fantasy: “We have the power to save the world. Now.”

Central banks have been sucked into this vast self-serving vortex of fake alarm.  They are being urged to underwrite trillions of dollars of high-risk green bonds at a “whatever-it-takes” scale and speed. For someone has to fund the Ministry of Climate’s “climate-resilient” projects and Agenda 2030’s seventeen sustainable development goals (SDGs).

Most Western governments have fallen for the ruse. They tell their citizens they can be “saved” from a changing climate. Just build more wind turbines and solar panels, and keep all fossil fuels – coal, oil and gas – in the ground. That’s where they belong, according to green ideology.

As I wrote in a recent post, The Reserve Bank’s French Connection, the Bank already has embraced the climate hyperbole. With the Climate Change Authority chair on its board one could not expect much critical scrutiny. It joined the Banque de France’s Network for Greening the Financial System (NGFS) last year “to learn and benefit as much as possible from the expertise of others [except sceptics], to understand and contribute to the discussion around the serious challenge of climate change.” Meanwhile, President Macron is leveraging the Ministry of Climate’s Paris 2015 Agreement commercially in every way. Électricité de France, for example, is now a major force in the international renewable energy racket, often acting with China’s help. It is largely owned by the French state.

The RBA has been talking to climate modellers too, Gaia help us. One issue is “around the absence of data”, according to Guy Debelle, the deputy governor. Another is whether the RBA can “map the climate models that are out there … into our macroeconomic models, which are not necessarily set up to handle them.”

Encouragement is coming from elsewhere too. Writing in Foreign Policy last month, Adam Tooze  urged central banks to step up on global warming.  Tooze, an economic historian and director of the European Institute, is a new voice in climate politics. Two of his books: Wages of Destruction: the Making and Breaking of the Nazi Economy (2006) and Crashed: How a Decade of Financial Crises Changed the World (2018). He does not accept we have a climate Catch-22: that funding and developing a new global energy system in just ten years, 85 per cent of which currently depends on fossil fuels, is impossible. His solutions include making Western taxpayers liable for natural disaster costs, whatever their cause; and, controversially, authorising central banks to print green money.

At some point, market solutions won’t be sufficient for the financial problems posed by climate change. Disaster will be so frequent that there will be no alternative either to abandoning insurance protection or to nationalizing risks and transferring them to taxpayers at large. In some places, that is already happening. — Adam Tooze

RE investment will require “tens of trillions of dollars over several decades.” Exploiting global fossil fuel reserves will have to cease; for “stabilising temperatures below catastrophic levels” at an imaginary future date surely must be our top priority, more important than present economic woes. This will create lost revenues of up to $28 trillion for oil, gas, and coal companies over the next two decades, with asset-value write-downs of between $1 trillion and $4 trillion. Stranded asset risks in the industrial sector could rise to $20 trillion.

As for “financial stability”, Mr Tooze suggests it should not be the principal concern of central banks and regulators. They have a higher purpose

urgently exploring what they can do to alter the course of economic growth so that the world can rapidly decarbonize and thus prevent worst-case climate change—and the related financial fallout—in the first place.

One NGFS goal is to promote markets for green bonds, a market currently worth $170 billion. Central banks should encourage its growth, Mr Tooze suggested, “by developing legal standards and an agreed classification of what actually constitutes green finance”. China apparently is leading the way: “It is one of the first areas of financial governance in which China is setting the pace”. In the Year of the Pig, dear reader, pigs really can fly.

What could central banks do to help sustain RE investment of tens of trillions of dollars? Why, underwrite the risks taken by private banks and carbon cowboys; give “privileges” to their green bonds when offered as collateral in exchange for cash, borrowing by stressed banks and so on. Here is Tooze once more

Given the long-term nature of those investments, there is a strong case for funding a large part of this decarbonization drive through the issuance of long-term debt. It is not the business of central banks to issue such loans. The debts should be issued by public investment banks or directly by national governments. But it should be the job of central banks to support this push by acting as a buyer of last resort for those long-term debts.

Acting as a backstop to the issuance of a massive volume of publicly issued green bonds is certainly a novel role for the central banks. But after their exertions in the 2008 financial crisis, central bankers, of all public officials, can’t plausibly retreat into an insistence on the limits of their mandate……The climate emergency poses a risk that is even more existential. Faced with this threat, to indulge in the idea that central banks, as key agencies of the state, can limit themselves to worrying about financial stability and can confine themselves to designing better rules for the private issuance of green bonds, is its own form of denial.

Given Mr Tooze’s belief – that central banks can be the planet’s saviours – it comes as no surprise to learn he’s a fan of Canadian Mark Carney, governor of the Bank of England (BOE). Governor Carney is one of many who have switched sides from investment banking to regulating. Messrs Turnbull and Frydenberg did so too, with the former switching back. Mr Turnbull is now a global senior advisor for the New York-based investment firm, KKR & Co. Like the leopard, however, investment bankers seldom change their spots. Addressing an audience of bankers and financiers last month at Coutts Bank about the “risks and rewards” posed by climate change, Governor Carney seem to have his investment banking hat on much of the time. “Capitalism,” he said, “is part of the solution to tackling climate change, and part of what we need to do”; such as pulling an arbitrary price for “carbon” (dioxide) out of thin air so investment bankers can conjure up all manner of atmospheric derivatives and trade invisible hot air, at least until all the methane-belching cows come home.

The capitalist system needs to manage the risks around climate change, be ready for the different speeds of the adjustment. For the most important thing is to move capital from where it is today to where it needs to be tomorrow. The system is very much part of the solution.” Mark Carney

Some companies will go bankrupt, but “there will be great fortunes made along this path aligned with what society wants.” The UK government, Carney said, told the Bank of England it had to assess the risk that climate change posed to the stability of the financial system. Better late than never, but presumably excluding the power-sector and other risks arising from implementing the – “net zero carbon emissions by 2050”, as demanded by the Climate Change Act of 2008.

Given the speed of “adjustment” required, the BOE has to “stress test the financial system” – a popular expression among central bankers today – “to see how ready it is to cope with climate change.” Those involved in this exercise should be stress tested too. Psychologically, it will be interesting to see how long they can cope with the folly of attempting to manipulate a natural phenomenon clearly beyond human control. Sir David Attenborough was also there. He gave the audience his signature anthropogenic wake-up call:  the planet and the creatures on it were in mortal danger and we “simply must act”.

The Carney speech was just a curtain-raiser to next month’s big event: the Ministry of Climate’s Action Summit 2019 on September 23 in New York City. It will take place the same week as the 2019 High-level Dialogue on Financing for Development and coincide with the 74th session of the UN General Assembly (UNGA 74). One of the “interactive dialogues” on the draft agenda released on July 22 is “financing the SDGs and climate action against rising debt burdens; and moving the money to fill the climate action and SDG financing gap.” For the UN, “climate action and sustainable development are inseparable”. No money, no SDG outcomes.

Secretary-General Antonio Guterres announced a CEO alliance to support SDG financing on April 15, 2019. To achieve the SDGs will require only an additional US $2.6 trillion each year for developing countries alone. 

We are all aware of the significant funding gap in reaching the SDGs. But we must also be aware that this pales in comparison to the more than $200 trillion of global assets under management. There is plenty of capital—both private and public—we just need to direct it in ways that deliver sustainability outcomes. — Scott Mather, chief investment officer, PIMCO, UNCTAD

Is there still time to take a chill pill? Yes, but don’t hold your breath, even though it would reduce the amount of atmospheric carbon dioxide. There are simply not enough chickens in the world to lay all the eggs that would have to go on the faces of all the climate propagandists. Mayhem, unfortunately, is more likely than mea culpa.

As for making good decisions, RBA Board member, Ian Harper, a devout Anglican and dean of Melbourne Business School, posted a guide on the subject last month.

Another useful tool to keep your biases in plain sight is to run your decisions past the “three As” of appetite, approval and ambition – the temptations the Devil used to test Christ during his 40 days and nights in the desert. 

“Ambition”, he wrote, “regularly gets in the way of good decision-making because it’s natural to want to advance your own interests. Assessing your decisions against this tendency will enhance your reputation as someone who can think in terms of a higher purpose.” But can the RBA Board distinguish self-interest from confirmation bias? Does pursuing a zero-carbon (dioxide) emissions utopia qualify as a higher purpose or a bad ambition?  Is it aware of a phenomenon called noble-cause corruption? Has it stress-tested its biases with rigorous due diligence? Here is Harper again from his July 31 address

Every organisation, and just about every individual, needs to be aware of the public response to their actions, which is why being able to consult, listen to others, identify a higher purpose and guard against your own biases are essential skills for every decision-maker.

Any proposal by the RBA to bankroll more RE surely must be subject to greater public scrutiny. We don’t want a bigger monetary – and economic – mess. The Clean Energy Finance Corporation has already spent over $6 billion dollars (to 30 June 2019) chasing an RE chimera. Enough is enough.

Don’t be tricked, dear reader, by a “higher purpose” assertion or the constant “climate change” alarmism. And don’t be casual about causality. The misguided quest to” save the planet” is based on a false premise. Carbon dioxide is not a pollutant, nor is it the primary driver of the Earth’s ever-changing climate. Go tell it on the mountain.

The Devil, Mr Harper, is in the detail.

8 comments
  • en passant

    The answer is to abandon hope and get with the Woke: Western nations have chosen to fail and become extinct, or ruled by 7th century barbarians. The plan is to follow the course set out in Jared Diamond’s :Collapse-how societies choose to fail or succeed. Skip the succeed part as our children are being programmed for extinction. The West’s time is over.
    “… prevent worst-case climate change—and the related financial fallout—in the first place.” This sounds very much like the next round originated by an American PR fool who explained the they had to destroy the Vietnamese village to save it. Tooze & Carney (and the UN) see that we must destroy the most successful and civilised nations to save the planet – for whom exactly, if not the civilised?
    Fortunately, there is a solution, but only for those few of us who have found a lifeboat. Move to the Philippines, Vietnam, Cambodia, Thailand or Taiwan. None has been fooled by the GreenFools and are busily building the next society that will replace the failed Western & Oz/NZ ones.
    Did I mention they are extending the coal & oil-fired power station near where I live. I already pay 25% what I would in Oz, but I expect the gap to widen, suckers.

  • Les Kovari

    Bla bla bla bla.

  • en passant

    Les,
    I think your sheeple woke comment should be “Baa, Baa, Baa”.

  • Alice Thermopolis

    Why is the Chair of the Climate Change Authority, Wendy Craik, AM, on the RBA Board? Member since 7 May 2018.
    Did her appointment have something to do with the past PM’s attempt to introduce National Energy Guarantee legislation?
    Present term ends on 6 May 2023.

  • rod.stuart

    I become annoyed when I see the phrase “fighting climate change”.
    How is it possible for one to ‘fight’ something that does not exist, unless one is insane?
    If you do not question its existence, then perhaps you can explain precisely what ‘climate change’ is supposed to be other than a figment of your imagination. In doing so, please use the correct definition of term “climate”. Note that in order to define a change a metric is necessary. The metric for climate is a classification.
    “The meteorological conditions, including temperature, precipitation, and wind, that characteristically prevail in a particular REGION.”

  • SB

    The ‘new’ Yes Prime Minister on ‘global warming’:
    Part 1: https://vimeo.com/124391891
    Part 2: https://vimeo.com/124392955
    No-one can replace Humpy, Jim and Bernard, but try to look past that when watching these clips and you will see the same elements at work: political self-preservation and bureaucratic inertia. It would have been much better if they could have introduced a third element into this – namely, the self-proclaimed elite, who simply want to use the system to enhance their own power and wealth, and get a kick out of crapping on the deplorables while they go about it.

  • Les Kovari

    Calling climate hysteria pseudoscience implies that there is som degree, however minute, of science behind it.

  • Alice Thermopolis

    RBA still pretending it can integrate CC speculation into its (broken) monetary models, despite “uncertain future paths for the climate”.

    Dr Debelle in a speech to the annual Risk Australia Conference in Sydney today::

    He highlighted climate risk as an area of concern in the long term for risk managers especially because it was hard to actually assess the risk.

    “Climate is a challenging risk to assess but an increasingly necessary one,” he said.

    “As risk managers, you can bring your skills at calculating the expected future value of financial assets across a number of potential scenarios. In that sense, climate risk is not that different from other risks, though the challenge of translating uncertain future paths for the climate into paths for the economy and the prices of financial assets is harder than some of the other risks that you generally deal with.”

    “Transition risk is about the potential effects to businesses as the country and the economy adjusts to the changes in the climate. This includes the adjustment to policy responses required to meet the Paris objectives.”

    Please do more due diligence, Deputy Governor.

    A good place to start:https://quadrant.org.au/opinion/doomed-planet/2019/06/a-remedial-lesson-in-climate-education/

    “I often come across students and teachers who express concern over climate change and the need for humanity to do something about it. I always begin such conversations with the question, “What’s the problem?” They always, eventually, get down to the fact that it’s carbon “pollution” and how we must stop burning fossil fuels and embrace renewables in order to save the planet. Again, it’s the MSM spin. My next question is how much CO2 is in the atmosphere? I have yet to come across anyone at school, when asked that question, who knows that it’s a bit above 400 ppm.”

Post a comment