By Jo Nova

A strike at the heart of the Blob

Texas and 10 other US States have pressed the radioactive Antitrust legal button and filed against BlackRock, Vanguard and State Street. The states claim the money managers bought up large stakes in coal companies and then colluded to promote ESG and DEI (diversity, equity and inclusion) goals that reduced coal output. The decreased supply of coal, in turn increased the cost of electricity to consumers. It was fundamentally anti-competitive behaviour. These three companies together have $26 Trillion dollars of assets under management. That’s only one trillion smaller than the entire US GDP.

In this case, some of the collusion was all out in the open. The three money managers said they were trying to save the world and protect the people, and they joined groups like the GFANZ and Net Zero alliances like Climate Action 100+. But in the end, these three financial giants had collectively acquired close to 30% of most US Coal companies, and even though they claimed to have good intentions, the 11 State Attorney Generals argue that any supposed social benefits are irrelevant. These three companies have profited immensely while customers have been denied access to a free and open market, and have paid higher electricity bills.

In a democracy, the people are supposed to decide the policies, not the Oligarchs.

Look at the grip the three supermassive money managers had on the coal industry:

No wonder coal companies were so pathetic at fighting back against the climate propaganda.

The defendants were accused of exploiting their market power and involvement in climate advocacy groups to pressure coal companies to slash output and reduce carbon emissions from coal by more than 50% by 2030, driving up consumers’ utility bills.

“Competitive markets — not the dictates of far-flung asset managers — should determine the price Americans pay for electricity,” the states said in the complaint.

Texas Attorney General Ken Paxton, whose office filed the lawsuit, in a statement accused the defendants of promoting an “illegal weaponization of the financial industry in service of a destructive, politicized ‘environmental’ agenda.”

The lawsuit aims to stop these companies from voting on shareholder resolutions or acting in a way to undermine coal output and competition. The Attorney Generals also want money — calling for fines to be paid for the antitrust violation.

The free market has been destroyed:

For the past four years, America’s coal producers have been responding not to the price signals of the free market, but to the commands of Larry Fink, BlackRock’s Chairman and CEO, and his fellow asset managers. As demand for the electricity Americans need to heat their homes and power their businesses has gone up, the supply of the coal used to generate that electricity has been artificially depressed—and the price has skyrocketed. Defendants have reaped the rewards of higher returns, higher fees, and higher profits, while American consumers have paid the price in higher utility bills and higher costs.

The three financial giants have violated the Clayton Act (Antitrust legislation)

Defendants are three of the largest institutional investors in the world. Each Defendant has individually acquired substantial stockholdings in every significant publicly held coal producer in the United States. Each has thereby acquired the power to influence the policies of these competing companies and bring about a substantial lessening of competition in the markets for coal. And each has used its power to affect a substantial reduction in competition in coal markets. Considered alone and in isolation, each Defendant’s acquisition and use of  producers has violated Section 7 of the Clayton Act.

… Defendants have immense influence over these companies on their own, but collectively Defendants possess a power to coerce management that is all but irresistible.

They have made their goals public

But Defendants have not just acted alone and in isolation. In 2021, they went further. In that year, Defendants each publicly announced their commitment to use their shares to pressure the management of all the portfolio companies in which they held assets to align with netzero goals. Those goals included reducing carbon emissions from coal by over 50%. Rather than individually wield their shareholdings to reduce coal output, therefore, Defendants effectively formed a syndicate and agreed to use their collective holdings of publicly traded coal companies to induce industry-wide output reductions.

And even though they have pulled out of these Net zero alliances, that doesn’t change the fact that they did engage in anticompetitive behaviour and continue to threaten the free market.

Pretending to save the world while profiting from collusion is not OK

Defendants have publicly defended their anticompetitive scheme with appeals to environmental stewardship. But acquiring shares of common stock, “the effect of which ‘may be substantially to lessen competition’ is not saved because, on some ultimate reckoning of social or economic debits and credits, it may be deemed beneficial.” … The nation’s antitrust laws “reflect a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services.” … Defendants’ belief that concern for the climate confers a license to suppress competition is “mistaken.

The antitrust laws don’t permit [the enforcers of America’s antitrust laws] to turn a blind eye to an illegal deal just because the parties commit to some unrelated social benefit.”1 Under the antitrust laws, full and open competition must dictate domestic coal production.

BlackRock has also deceived its own shareholders

In addition to joining with the other two major institutional asset managers to bring about a reduction in the output of coal, Defendant BlackRock went further—actively deceiving investors about the nature of its funds. Rather than inform investors that it would use their shareholdings to advance climate goals, BlackRock consistently and uniformly represented its non-ESG funds would be dedicated solely to enhancing shareholder value. But as detailed below, BlackRock routinely violated its pledge to investors, using all its holdings to advance its climate goals and—as most relevant here—promote the objectives of its output-reduction syndicate.

The States that may save us all are Texas, Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming.

Other countries should be following suit, and looking hard at their own competition laws. We may not have antitrust laws, but most of the West have some kind of competition laws against cartels who misuse their market power.

From the University of East Anglia and the “has anyone told Al Gore?” department comes this finding that speaks to the huge complexity of Earth’s atmosphere and it’s systems.

Oceans emit sulfur and cool the climate more than previously thought.

Researchers have quantified for the first time the global emissions of a sulfur gas produced by marine life, revealing it cools the climate more than previously thought, especially over the Southern Ocean.

The study, published in the journal Science Advances, shows that the oceans not only capture and redistribute the sun’s heat, but produce gases that make particles with immediate climatic effects, for example through the brightening of clouds that reflect this heat.

It broadens the climatic impact of marine sulfur because it adds a new compound, methanethiol, that had previously gone unnoticed. Researchers only detected the gas recently, because it used to be notoriously hard to measure and earlier work focussed on warmer oceans, whereas the polar oceans are the emission hotspots.

The research was led by a team of scientists from the Institute of Marine Sciences (ICM-CSIC) and the Blas Cabrera Institute of Physical Chemistry (IQF-CSIC) in Spain. They included Dr Charel Wohl, previously at ICM-CSIC and now at the University of East Anglia (UEA) in the UK.

Their findings represent a major advance on one of the most groundbreaking theories proposed 40 years ago about the role of the ocean in regulating the Earth’s climate.

This suggested that microscopic plankton living on the surface of the seas produce sulfur in the form of a gas, dimethyl sulphide, that once in the atmosphere, oxidizes and forms small particles called aerosols.

Aerosols reflect part of the solar radiation back into space and therefore reduce the heat retained by the Earth. Their cooling effect is magnified when they become involved in making clouds, with an effect opposite to, but of the same magnitude as, that of the well-known warming greenhouse gases, such as carbon dioxide or methane.

The researchers argue that this new work improves our understanding of how the climate of the planet is regulated by adding a previously overlooked component and illustrates the crucial importance of sulfur aerosols. They also highlight the magnitude of the impact of human activity on the climate and that the planet will continue to warm if no action is taken.

Dr Wohl, of UEA’s Centre for Ocean and Atmospheric Sciences and one of the lead authors, said: “This is the climatic element with the greatest cooling capacity, but also the least understood. We knew methanethiol was coming out of the ocean, but we had no idea about how much and where. We also did not know it had such an impact on climate.

“Climate models have greatly overestimated the solar radiation actually reaching the Southern Ocean, largely because they are not capable of correctly simulating clouds. The work done here partially closes the longstanding knowledge gap between models and observations.”

With this discovery, scientists can now represent the climate more accurately in models that are used to make predictions of +1.5 ºC or +2 ºC warming, a huge contribution to policy making.

“Until now we thought that the oceans emitted sulfur into the atmosphere only in the form of dimethyl sulphide, a residue of plankton that is mainly responsible for the evocative smell of shellfish,” said Dr Martí Galí, a researcher at the ICM-CSIC and another of the main study authors.

Dr Wohl added: “Today, thanks to the evolution of measurement techniques, we know that plankton also emit methanethiol, and we have found a way to quantify, on a global scale, where, when and in what quantity this emission occurs.

“Knowing the emissions of this compound will help us to more accurately represent clouds over the Southern Ocean and calculate more realistically their cooling effect.”

The researchers gathered all the available measurements of methanethiol in seawater, added those they had made in the Southern Ocean and the Mediterranean coast, and statistically related them to seawater temperature, obtained from satellites.

This allowed them to conclude that, annually and on a global average, methanethiol increases known marine sulfur emissions by 25%.

“It may not seem like much, but methanethiol is more efficient at oxidising and forming aerosols than dimethyl sulfide and, therefore, its climate impact is magnified,” said co-lead Dr Julián Villamayor, a researcher at IQF-CSIC.

The team also incorporated the marine emissions of methanethiol into a state-of-the-art climate model to assess their effects on the planet’s radiation balance.

It showed the impacts are much more visible in the Southern Hemisphere, where there is more ocean and less human activity, and therefore the presence of sulfur from the burning of fossil fuels is lower.

The work was supported by funding from organisations including the European Research Council and Spanish Ministry of Science and Innovation.

‘Marine emissions of methanethiol increase aerosol cooling in the Southern Ocean’, Charel Wohl, Julián Villamayor and Martí Galí et al, is published in Science Advances on November 27.