During a recent tornado warning for Washington DC, Rep. Alexandria Ocasio-Cortez (D-NY) issued a tweet claiming the tornado warning illustrated that “climate change is real y’all.” Ocasio-Cortez’s tweet revealed just how little she knows about climate change.
If Ocasio-Cortez knew American history, she would know that tornadoes have never been “limited to the Great Plains.” If she knew her American history, she would have known that a tornado that touched down as part of an intense storm in 1814 prevented the British from doing worse damage to our Washington DC when the redcoats sacked our nation’s capital during the War of 1812. An excellent historical narrative published by The Vintage News observes…
May 20, 2019 By Alicia Seiger Related Organization(s): Steyer-Taylor Center for Energy Policy and Finance
In honor of Earth Day, Harvard University students, faculty and alumni held rallies to pressure the university’s $39.2 billion endowment to divest from fossil-fuel related companies. Having scored what sounded like a victory five years ago, when Stanford University announced a coal divestment decision, Fossil Free Stanford is doubling down to demand the school’s $26 billion endowment sell oil and gas stocks. The divestment rallying cry has been echoing across the halls of elite universities, through US state legislatures (which govern state pension funds), and as far north as Norway, home to the world’s largest sovereign wealth fund, for more than half a decade. While some calls appear to have been answered, the response won’t move the climate needle far enough or fast enough and meanwhile, pensions and endowments remain woefully underprepared to weather climate change.
The divestment movement has been helpful in drawing attention to the impact of climate change on investment portfolios and increasing the stigma around fossil fuel companies. It was also well-timed. Less than two years after Bill McKibben first ignited calls for endowments to go ‘fossil-free’…
Let’s pause right there. Do these buffoons have any idea how Billy Madisoned the phrase “fossil-free” is? Or how Billy Madisoned it is to take credit for a “a disastrous five-year run” for oil & gas stocks due to the collapse in oil prices in late 2014? It’s particularly Billy Madisoned because she even cites the real reason for low oil prices…
The US shale boom had much more to do with driving asset values down than carbon math, but lower prices forced portfolio managers to reconsider what had long been their highest performing asset class.
Stanford Law School Blogs
Apparently, just being Billy Madisoned wasn’t good enough…
[W]hile investors tinker around the margins and activists claim victories, mother nature is sounding a deafening alarm. Fueled by climate change, extreme weather has been decimating economic value across the world. In the past two years alone, global financial losses from hurricanes, droughts, wildfires and other natural disasters amounted to roughly $500 billion. The scale and scope of climate impacts on investment portfolios demand investment and legislative policies more ambitious and effective than divestment. Mother nature is not calling for a Tylenol, she’s demanding interventions that address the root causes of her fever.
Stanford Law School Blogs
The source she cites for the $500 billion claim…
According to preliminary sigma estimates, total economic losses from natural and man-made catastrophes in 2018 declined to USD 155 billion from USD 350 billion in 2017. Global insured losses are estimated to be around USD 79 billion, higher than the annual average of the previous 10 years. There have been a number of smaller and mid-sized loss-generating disaster events across all regions this year, also affecting regions with well-established insurance cover. Together, these have made 2018 the fourth costliest year on sigma records in terms of losses covered by the insurance industry. Globally, more than 11 000 people have died or gone missing in disaster events in 2018, similar to the number of victims in 2017.
Total economic losses from natural catastrophes and man-made disasters are estimated to be USD 155 billion in 2018. Natural catastrophes caused USD 146 billion of the losses, and man-made disasters USD 9 billion. Of the total economic losses, USD 79 billion have been covered by insurance, down from USD 150 billion in 2017, but more than the previous 10-year annual average (USD 71 billion). Natural catastrophes accounted for USD 71 billion of this year’s insured losses, and man-made disasters for the remaining USD 8 billion. This year is projected to be the fourth most expensive year on sigma records for insurance. More than 11 000 people have died or gone missing in catastrophe events in 2018. The earthquake in Sulawesi, Indonesia in September had the highest human toll of the year, with over 3 500 estimated dead or missing.
My fifth thought was that if a warmer Atlantic Ocean caused bad weather, the Medieval Warm Period would have been really bad and the Roman & Minoan Warm Periods must have been veritable schist storms…
My sixth thought was that a total elimination of fossils (fossil-free) is impossible.
My seventh thought was that a total elimination of fossil fuels wouldn’t fix the weather any time soon (if ever) and it would kill half of the human population rather quickly.
My eighth thought was that the proposed solutions for fixing the weather will cost a lot more than what weather-related disasters are likely ever to cost in the future… And none of the solutions will fix the weather.
My ninth thought was that even if anthropogenic climate change was a contributing factor to the $500 billion, that’s chump change compared to the cost of just about everything else. In arguendo let’s accept the latest National Climate Assessment’s claim that “extreme weather events and natural disasters caused $91 billion in damages in 2018.” Not all of these costs were to businesses, but we’ll run with that number. What else takes bites out of businesses?
Federal taxes include personal income taxes, Social Security taxes, corporate income taxes, excise taxes and estate taxes because, ultimately, it’s businesses that generate the revenue, enabling the taxation.
The IPCC calculated that it will cost $122 trillion to avoid 1.5 °C of warming relative to the alleged pre-industrial average. The average annual cost through 2050 would be $800 to $2,900 billion…
And there isn’t one shred of evidence that a $122 trillion Global War on Weather will have any effect on the weather.
If all of this wasn’t good enough, we haven’t even gotten to the full-Billy Madison bit yet…
First, asset owners should immediately carve out a climate solutions allocation, staff it with a dedicated team empowered to source deals across all asset classes, and give them an absolute return benchmark. A dedicated allocation will help put climate-friendly investments on a level playing field with more traditional assets and serve to drive a portfolio’s overall sustainability. This type of proactive approach will also be critical in achieving the tripling of low-carbon investment experts indicate is required to achieve the ambition of the Paris Agreement.
Next, and this is the big one, investors must establish a process through which all buy, hold or sell decisions are sustainable by 2030, where “sustainable” is defined as being consistent with a 2-degree Celsius or lower warming scenario. The reason for this is not altruism, nor is it a bet on a policy response. This step is about risk management. Markets are not fully pricing climate risk, due in part to incomplete data and inertia. As a result, investors own mispriced assets.
Finally, and this cannot be said enough, mother nature has canceled business-as-usual. Investors must recognize that they are taking a bet on climate whether they act or not.
Stanford Law School Blogs
Not just “no”… But NO FRACKING WAY! I make investment decisions based on obtaining the best return on capital over a timeline that is meaningful to me… I’m not making bets on anything that may or may not happen 80 to 200 years in the future. Nor would I ever trust a dime of my money to someone who would invest on the basis of what they think the weather will be like 80 to 200 years in the future and would intentionally p!$$ some of my money away on carving “out a climate solutions allocation” and staffing it with people who can’t find real jobs because they majored in sciencey-sounding liberal arts subjects.
And then, full Billy Madison went full circle…
“Fossil free” signs often generate a visceral reaction from those on the receiving end. The most disappointing responses are ones that misunderstand the message as demanding “social change” or as “a means to achieve policy ends.”
Stanford Law School Blogs
The phrase “fossil-free” earns Ms. Seiger eleventy gazillion Billy Madison’s…
“’Fossil free’ signs” should draw “a visceral reaction” from everyone who has a real job, because the “fossil free” crowd is nothing more than a bunch of egg-head miscreants, incapable of holding real jobs, “demanding ‘social change’” as “a means to achieve policy ends,” namely global socialism.
“This is probably the most difficult task we have ever given ourselves, which is to intentionally transform the economic development model, for the first time in human history”, Ms Figueres stated at a press conference in Brussels.
“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time to change the economic development model that has been reigning for at least 150 years, since the industrial revolution. That will not happen overnight and it will not happen at a single conference on climate change, be it COP 15, 21, 40 – you choose the number. It just does not occur like that. It is a process, because of the depth of the transformation.”
A big new study by electricity grid nerds (and I mean that in the nicest possible way) shows that after all the money and pain of 20 years of forced transition Australia’s electricity has shifted from 85% coal powered to 75% coal powered, and things are now a lot more expensive and unstable. We drove out some brown coal, but swapped it for black coal. Instead of ousting coal power, the extra solar and wind power replaced some gas and hydro.
The authors are genuine independent experts, and the report is incredibly detailed — so this is rare — but still suffers from serious drawbacks:
The team doesn’t question the need for an artificial expensive transition. Almost all the problems they describe are caused by government policies that task our grid with changing the climate as well as producing cheap and reliable electricity. In a grid being ruined by inept policy, the implied solutions almost all involve more regulation and government policy. If our gas prices are too high we could ban sales overseas, but then we lose the export income. The left hand steals from the right. The free market solution is to use another fuel, like coal or […]
Until they embrace nuclear energy as a key to reducing emissions, the party’s many presidential candidates will be hard to take seriously on climate change.
Climate change is the No. 1 issue for Democrats, with a recent poll showing 82 percent of Democratic voters listed it as their top priority. To appeal to those voters, contenders for the 2020 Democratic presidential nomination routinely call climate change an “existential threat” to the nation and the world. But amid all their rhetoric and promises of massively expensive plans to tackle the problem, these same Democrats — with the notable exception of Senator Cory Booker — steadfastly refuse to utter two critical words: nuclear power.
The Democrats’ disdain for nuclear energy deserves attention, because there is no credible pathway toward large-scale decarbonization that doesn’t include lots of it. That fact was reinforced Tuesday, when the International Energy Agency published a report declaring that without more nuclear energy, global carbon dioxide emissions will surge and “efforts to transition to a cleaner energy system will become drastically harder and more costly.”
How costly? The IEA estimates that “$1.6 trillion in additional investment would be required in the electricity sector in advanced economies from 2018 to 2040” if the use of nuclear energy continued to decline. That, in turn, would mean higher prices, as “electricity supply costs would be close to $80 billion higher per year on average for advanced economies as a whole.” […]
The timing of the IEA report is particularly relevant for New York City, which gets about 25 percent of its electricity from the two reactors at the Indian Point Energy Center in Buchanan, N.Y. Next April, Indian Point’s Unit 2 reactor will be permanently shuttered. In April 2021, its remaining reactor, Unit 3, will likewise be retired. When those reactors close, their output will largely be replaced by three gas-fired power plants, which is no surprise: Whenever nuclear reactors are shuttered, they get replaced by plants that burn natural gas, and that means increased emissions of carbon dioxide.
In 2013, when Michael Bloomberg was mayor, his office issued a report that estimated closing Indian Point and replacing it with gas-fired generation would “increase New York City’s greenhouse gas emissions by approximately 15 percent.” It also said the city “depends on Indian Point for reliability as congested transmission lines limit power imports from more distant locations.” But current mayor — and Democratic presidential hopeful — Bill de Blasio steadfastly refuses to acknowledge Indian Point’s importance, or the potential of nuclear power in general. Last month, de Blasio unveiled his $14 billion NYC Green New Deal plan, which aims to cut New York City’s emissions by 30 percent by 2030. With the looming loss of Indian Point, that 30 percent goal will effectively become 45 percent.
Another Democratic contender, Beto O’Rourke, has dubbed climate change “our greatest threat” and says he will “mobilize $5 trillion” to cut domestic greenhouse-gas emissions to zero by 2050. The word “nuclear” does not appear anywhere on his website, just as it’s absent from nearly every other Democratic presidential candidate’s site. That’s a shame, because the IEA’s report is just the latest in a long line of scientific papers pointing to the need for nuclear energy. In 2014, the Intergovernmental Panel on Climate Change declared that achieving deep cuts in emissions will “require more intensive use” of low-emission technologies “such as renewable energy [and] nuclear energy.”38
This is, frankly, one of the biggest and longest-running disconnects in American politics: The leaders of the Democratic party insist that the U.S. must make big cuts in greenhouse-gas emissions because of the threat posed by climate change, but for nearly five decades, they have either ignored or professed outright opposition to nuclear energy. The last time the party’s platform contained a positive statement about nuclear power was way back in 1972.