Why the next financial crisis could be green

By Paul Homewood


A very good analysis in Spiked:



Green finance. Climate finance. Sustainable finance. These phrases no doubt fill most people with a kind of existential dread, but I fear we will all have to learn a lot more about green finance in the years to come.

For one reason why, take a look at Elon Musk’s electric-car venture, Tesla. In just the first nine months of 2020, it received a whopping $1.2 billion in regulatory credits – from California and other states in America, from the US federal government and even from the European Union.

That’s $1.2 billion without making a single extra car – just for making cars that aren’t based on fossil fuels. Mr Musk sells his credits to Honda, General Motors and Fiat Chrysler (FCA) – car giants that haven’t got out of gasoline and into electric fast enough, as far as the US authorities are concerned.

Full story here.


It is little wonder that big finance is being attracted to green ventures, given all of the subsidies thrown at them. But what happens when the subsidies stop?

We have talked before about the increasing unsustainability of offshore wind projects, which have signed up to clearly uneconomic deals here in the UK. Huge losses are going to hit them down the line, unless they get government bailouts.

You can multiply those losses many times, to cover all the rest of the green finance at risk, which is based on nothing more substantial than political whim.

As the writer concludes:

Led by the stock market hubs of Amsterdam, Zurich and London, green finance shows what one expert calls a marked ‘dependence on public policy and regulation’. Too right. The byzantine world of green finance is just the ticket for underwriting obscure, ‘build back greener’ state policies, which have become all the rage in the wake of Covid-19, despite repeated failures in the past, like Green New Deals, Green Recovery Plans, green jobs and all the rest.

As we enter the first recession since the crash of 2007 / 2008, which was in the first instance a financial crisis, what could possibly go wrong?



November 3, 2020 at 04:45AM

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