From Heart of Liberty Portfolios

Don Harrison

I keep a spreadsheet with links to informative articles I have read on ESG and climate change.  I typically attach key words to each link so I can easily search out a topic when needed for reference.  When it comes to the climate change debate, “absurdity,” “mendacity,” “grift” and “tyranny” make frequent appearances.  But the star of the show seems to be “fantasy.” 

Last month, the always perspicacious Mark Mills penned an excellent piece in City Journal titled “When Politics and Physics Collide.” (1) It is a comprehensive indictment of the magical thinking that permeates the lemming-like rush to EVs, Net Zero and the bulk of “green” technologies.

Here is a sprinkling of the points he makes in his damning analysis:

100 percent of everything in civilized society, including the favored “green energy” machines themselves, depends on using hydrocarbons somewhere in the supply chains and systems.

Through regulatory fiat, the Environmental Protection Agency’s newly announced rules effectively mandate that more than half of all cars and trucks sold must be electric vehicles (EVs) by 2032.  That will demand, and soon, the complete restructuring of the $100 billion U.S. automobile industry.

A seminal paper from the International Energy Agency (IEA) estimated a fourfold to 40-fold increase in global mining would be needed for a variety of common energy minerals. A more recent paper from Yale looked at a suite of 15 rare minerals required for “full decarbonization” and reached similar conclusions: the supply of various key “rare earth” elements would have to increase 60- to 300-fold.

It is no exaggeration to say that the realities of solar silicon fabrication mean that solar subsidies and mandates have induced eager Californians to festoon their roofs with transmuted coal – because China has a 90 percent market share producing solar silicon on its coal-fired grids. 

The total direct and induced spending on the energy transition could easily exceed $5 trillion before a decade passes, or sooner, if advocates prevail.  For context, the entirety of World War II cost the U.S. roughly $4 trillion (in today’s dollars).

Read the whole article, and you will probably come to ask yourself the same question I have been asking for quite some time: how can investment management companies continue to insist that ESG investing meets their fiduciary obligations when most of the sustainability agenda is physically, economically, and politically unattainable?   

1) https://www.city-journal.org/article/the-magical-thinking-behind-the-energy-transition

Any opinions are those of Don Harrison and not necessarily those Raymond James Financial Services, Inc., or of Raymond James.  The information contained in this presentation does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Investing involves risk and you may incur a profit or loss regardless of strategy selected. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. 

Don Harrison, creator of Heart of Liberty Portfolios, is the President of Capitalist Investment Services and a Branch Manager and Financial Advisor with Raymond James Financial Services. Heart of Liberty Portfolios — first choice for investors who want to rid their portfolios of ESG. https://heartofliberty.com/home