From Climate Etc.

by Judith Curry and Harry DeAngelo 

We have a new paper published in the Journal of Applied Corporate Finance, entitled “A Critique of the Apocalyptic Climate Narrative.” The paper reflects the JACF’s ongoing interest in publishing articles that analyze important Environmental, Social, and Governance (ESG) issues in ways that are useful for investors, money managers, and corporate directors, as well as for economists and legal scholars who study corporate governance.

The official link for the publication at Wiley .  The paper can be downloaded from SSRN .  Please use SSRN to download, as is it easier to navigate and so that we can keep track of the download numbers.

The back story on this paper is that Harry DeAngelo sent me a draft manuscript for comments.  I was intrigued by writing a paper on this topic for the corporate/investor audience, and the collaboration was born.

Some excerpts from the paper are provided below:

Summary 

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The apocalyptic climate narrative is a seriously misleading propaganda tool and a socially destructive guide for public policy. The narrative radically overstates the risks to humanity of continued global warming, which are manageable, not existential. It prescribes large-scale near-term suppression of fossil-fuel use, while failing to recognize the huge costs that such suppression would inflict on humans because fossil fuels are currently irreplaceable inputs for producing food (via ammonia-based fertilizer), steel, cement, and plastics.

The paper details the flaws in the apocalyptic climate narrative, including why the threat from human- caused climate change is not dire and why urgent suppression of fossil-fuel use would be unwise. We argue that sensible public policies would focus instead on developing a diversified portfolio of energy sources to support greater resilience and flexibility to respond to whatever weather and climate extremes that might occur. We identify nine principles for sensible U.S. public policies toward energy and discuss implications of the flaws in the narrative for investors and their agents.

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The first three sections provide introductory material that readers of Climate Etc. should be very familiar with.  Here is the outline of sections 2 and 3:

2. Is global warming dangerous?

• Warming over the past 120 years
• Prospective warming over the 21^st century
• Tipping points and surprises

3. Fossil fuel suppression: shooting ourselves in the foot

• Failure of net zero policies
• Geopolitical concerns about fossil fuel suppression
• Moral concerns about fossil fuel suppression
• Other economic, technological, and social impediments to fossil fuel suppression
• Bad energy choices
• Ever-growing demand for energy

Section 4 addresses rational energy policy for the 21^st century, with the full text of this section excerpted here:

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4. Rational energy policy for the 21^st century

We offer nine principles for operationalizing this approach to U.S. energy policies, with #3, #5, and #6 specifying actions we should take and the remainder highlighting what we should not do.

1. We should not inflict costs on U.S. citizens – reduced overall economic prosperity, constrained individual choice, and diminished national security – by adopting public policies intended to mitigate global warming that will not detectably affect Earth’s temperature in the short or long
2. We should not eliminate fossil fuels before we have technologically viable and cost-effective replacements for the critical inputs they provide in the production of food, steel, cement, plastics, and electricity.
3. We should use “carrots” to foster investment in innovation in energy, materials science, and agricultural science, as well as in the ability of humans to adapt to a changing climate.
4. We should not use “sticks” to punish consumption that generates greenhouse gasses (e.g., banning gas stoves, jet travel, internal combustion engines, and non-vegan food), while having no material effect on temperatures now or in the long run.
5. We should cultivate clean energy (to reduce air pollution) and energy independence (for national defense and economic security reasons) with a diversified set of reliable energy sources to hedge the risks of adverse “unknown unknowns” in the evolution of our political, economic, and physical
6. We should put major emphasis on the resuscitation (and refined development) of nuclear power, which is at least as safe as solar and wind and far safer than coal and oil (based on comparisons of death rates due to both accidents and air pollution per unit of electricity generated).
7. We should not focus narrowly on solar panels, wind turbines, and biofuels. Solar and wind are problematic because of their (i) unreliability and consequent need for a stand-by power system, (ii) low energy density and consequent massive land requirements to deliver energy at scale, and (iii) negative externalities (e.g., from rare-earth mining to produce batteries to address the unreliability problem). Biofuel emissions are at least as bad as gasoline, while biofuel production uses massive amounts of cropland and played a significant role in three major food crises in the last 20 years.
8. We should not engage in backdoor regulation of fossil-fuel use by the Federal Reserve (through bank oversight) and the SEC (through ESG empowerment) that will warp the allocation of investment capital.
9. We should not use our power to impose credit policies toward developing countries (e.g., by the World Bank) that discourage fossil-fuel-based projects and thereby make it more difficult for world’s poorest people to elevate themselves out of poverty.

The three proactive principles (#3, #5, and #6) reflect the physical reality that human flourishing depends critically on the abundant availability of energy and on the currently irreplaceable role that fossil fuels play in the production of food, steel, cement and plastics. Deterrent principle #7, which cautions against a narrow focus on solar, wind, and biofuels, reflects the strong technological limits of these technologies.

The remaining deterrent principles (#1, #2, #4, #8, and #9) reflect the fact that it makes no sense to mandate or constrain choices that will cause humanity to bear costs when those choices will have no detectable effect on global warming in the short- or long-run. These costs have a direct component: Avoidable waste from outlays on unpromising technologies and on consumption goods that simply sound good from a carbon emissions perspective. They also have an opportunity cost component in terms of diverting resources from worthwhile causes, including investments to foster greater resilience to weather and climate extremes as well as to help wide swaths of humanity to elevate themselves out of poverty.

4.1  Implications for investors and their agents

The flaws in the apocalyptic climate narrative have three important implications for the risk-management decisions of private investors and for the corporate directors and money managers who work on their behalf.

• The actual risks of fossil-fuel-generated climate change are not nearly as great as portrayed in the drumbeat of worried discussions of global warming in public discourse that the apocalyptic climate narrative has fostered.
• Those who nonetheless want to do something to help mitigate global warming should realize that the long-run consequences for the planet of the ESG pursuit of a reduced corporate carbon footprint will do little, if anything, to change the climate over the course of the 21^st
• The apocalyptic climate narrative is itself an element of investment. The narrative has gained such powerful traction – especially in the U.S. and other wealthy countries – that it is significantly affecting the allocation of real resources and the stock-market values of companies.

The latter traction creates upside investment potential and downside risk. The upside, of course, is the potential for profits by responding to the demand for green investments. The downside risk is the possibility that many people will eventually come to realize that the importance of suppressing fossil-fuel use has been blown far out of proportion in public discourse.

From a capital markets perspective, the current green-investment situation accordingly has elements of a stock-price bubble that is supported by a false narrative. One can expect that bubble to sustain or grow provided that many people continue to buy into the premise of an urgent need to transition away from fossil fuels and as governments add more subsidies to renewable-energy projects.

The danger is that the bubble will pop or dissolve as it becomes increasingly clear that the Apocalyptic climate narrative is an extremely effective form of environmentalist propaganda that markedly overstates the risks to humanity of continued global warming.

One might be tempted to take investment positions that effectively “short the bubble” and wait for the gains to come rolling in when the bubble pops or dissolves. The problem with such strategies is that substantial valuation errors in the capital market can take a long time to correct. Consequently, arbitrageurs who have finite capital to invest and who make strong bets against the bubble can be wiped out financially before the asset-pricing errors are corrected.

The upshot is that there is no clear path to a “free lunch” of abnormal investment performance from shorting green investments. The reason is that one simply cannot be sure about whether or when the world will come to broad recognition of the flaws in the narrative.

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Full text is also excerpted for the final section:

<begin quote>

 5. Bottom line: Sensible alternatives to net-zero policies

The apocalyptic climate narrative is a seriously flawed guide for public policy because it (1) radically overstates the risks to humanity of continued global warming, which are manageable, not existential and

(2) prescribes large-scale near-term suppression of fossil-fuel use, while failing to recognize the huge costs that such suppression would inflict on humans because fossil fuels are currently irreplaceable inputs for producing food (via ammonia-based fertilizer), steel, cement, and plastics.

The answers to four key questions provide a compact foundation for a far more sensible template for public policies toward global warming and the use of fossil fuels.

What would happen if the U.S. enforced a net-zero emissions policy? In 2100, according to climate- model projections. Earth’s average temperature would be lower (than it otherwise would be) by less than 0.2°C, which would be undetectable statistically given normal temperature variation. U.S. consumption and production of goods created with steel, cement, and plastics, and of food grown with ammonia-based fertilizer would immediately plummet because of the essential role fossil fuels play in their creation. A sharp decline in the quality of life would surely ensue.

Is it worth it? Is an undetectable reduction in the warming trend worth a huge sacrifice in the quality of life caused by an urgent move to net-zero? According to the apocalyptic climate narrative, the answer is yes because humanity (ostensibly) faces an existential threat from global warming. However, there is no credible evidence of an existential threat from global warming. Nor, indeed, is there evidence of warming- related costs that cannot be addressed by humanity’s resilience and ability to adapt to extreme climates.

Is an aggressive move to net-zero emissions politically feasible? Public policies that enforce an urgent move to net-zero would be especially hard to sell to the U.S. electorate once voters see the costs they would bear. The resistance would almost surely grow stronger as more voters come to realize that, regardless of their personal quality-of-life sacrifices, global warming is predicted to continue because China, India, Russia, Iran, and many other countries have strong incentives to continue to use fossil fuels.

What then should the U.S. do about global warming? We should encourage investment in efforts to find and improve alternatives to fossil fuels and in adaptation to a changing climate. We should not suppress fossil-fuel use because that would impose serious costs while generating no detectable benefits. Such suppression would put the net-zero cart before the horse, which is finding viable alternatives to fossil fuels in the myriad ways they enable humans to live far longer and much higher quality lives than our ancestors did even as recently as 100 years ago.

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From ClimateREALISM

By Linnea Lueken

The Associated Press (AP) claims in a post “Climate change is making coffee more expensive. Tariffs likely will too,” that climate change, in the form of severe weather like drought, is making coffee more expensive by suppressing yields. This is false. There is no evidence that severe weather is getting worse, In fact, coffee production is rising and the AP itself suggests some alternative reasons which are far more likely for any rise in coffee prices.

The AP reports that the destruction of some coffee plants “from heat and drought have cut production forecasts in Brazil and Vietnam, the world’s largest coffee growers.” They do admit that production globally is “still expected to increase, but not as much as commodity market investors had expected.”

Because of this, AP writes, coffee prices have risen.

This is a similar story to one Climate Realism covered back in February, “Sorry, New York Times, Climate Change Isn’t the Cause of High Coffee Prices,” but since the claims are persisting, it is worth revisiting.

Looking at data from the United Nations Food and Agriculture Organization (FAO) – the AP is correct that world coffee production has climbed nearly continuously since the 1990s. As discussed in the other Climate Realism post, world coffee production has risen 82 percent, and world record production and yields occurred as recently as 2020.  2023 saw the second highest level of production ever. (See figure below)

The specific countries that the AP claims have suffered recent losses, Brazil and Vietnam, have experienced trends of increasing production and yields over time, as well. In part, likely due to the fertilization effect of rising carbon dioxide emissions, that has occurred over the same time period.

In Vietnam, FAO data show coffee production has increased 2,026 percent between 1990 and 2023. (See figure below)

In Brazil, production increased 132 percent over the same period, with fluctuations between record breaking seasons from one year to the next. (See figure below)

It is difficult to find comprehensive, long-term drought and temperature data for Vietnam and Brazil. Brazil is often talked about in the news for some severe drought the country has suffered on and off for a few years now, particularly in the Amazon River Basin. Historical drought data, discussed in this Climate Realism post, does not show that recent drought is unprecedented or even connected to global warming. Worse droughts have occurred in the region’s past during times when global average temperature is believed to have been cooler than today. There does not seem to be a long term increase in the severity of drought Brazil. Deforestation is a likely culprit for recent dryness, as fewer trees in the Amazon make it harder for moisture to stay in the soil and maintain ground-level humidity.

A lower rate of increase in coffee production in a single year, lower but still an increase mind you, is neither evidence an impact of climate change nor portends doom for the future of coffee production. It is true that any given region has a maximum reasonable production capacity of coffee — but there is no evidence that peak has been reached yet anywhere, and climate change is not to blame either. Just as “peak oil” is an economic title and not an actual description of physically available resources, limits on coffee extend beyond the mere environmental. There are plenty of factors that limit crop production. Even the AP admits as much later in their article when says “[i]nflation is driving up the cost of labor, fertilizers, and borrowing.” The AP also explains that the expectation of tariffs may also push prices higher.

In February, the AP reported that the globe experienced a 14 percent decline in green coffee exports, which led to “the highest price ever for raw coffee in February, breaking the record set in 1977 when severe frost wiped out 70% of Brazil’s coffee plants.”

This doesn’t sound like the creeping pressures of climate change—since global coffee production is still much higher than during the 1970s, when emissions lower, temperatures were in the midst of a cooling trend, and scientists were warning of dangerous global cooling. It is clear that economic factors are the larger influences here.

The AP ought to have looked at a wider view of crop production data in Brazil and Vietnam, which may have assuaged some of their concerns about the future of coffee prices – at least as far as the influence of climate change is concerned. They do their readers a disservice, actually misleading more than informing them, by trying to tie every coffee price fluctuation to climate change, burying or downplaying the more direct economic factors.

By Jo Nova

A candidate for this years Cult Science Oscar:

The Coal Plant God is at it again — causing the oceans to swallow South Africa on the one hand and  lifting up the land by 2mm a year with the other. (A lucky coincidence that disguises the horrors of rising seas, eh?). Apparently we used to think the land was rising due to hot plumes of magma far below, but now researchers say its because a drought has made the crustal plate lighter.

Even though no model can predict rainfall, everyone reading the tea-leaves, and editing newspapers, can see that climate change caused the drought.

The precambrian crust under South Africa is some of the oldest in the world, and the research team proudly tells us they “analyzed satellite and climate data spanning nearly a decade.”  That much?

This groundbreaking conclusion comes from researchers at the University of Bonn…

The researchers used GPS measurements, satellite data, and hydrological models to study the correlation between areas experiencing severe droughts and significant land uplift.

Not to knock the detailed and creative work of said researchers but this is typical of Big Government strangled science. It must have cost a lot of money, involved many salaries and much high-tech equipment, but in the end all conclusions are tortured to blame “climate change”.

The paper itself only mentions anthropogenic climate change once, but the press release and news stories turn it into a horror show, and none of the experts at universities around the world will be able to say a damn thing about how absurd that is.

And none of the government funded science journalists at the ABC-BBC-CBC science units will think to ask if solar cycles affect rainfall in South Africa instead. Even though we know solar activity affects Central European floods, Australian-Asian monsoons, and groundwater levels in China.

All science serves The Blob, and The Science can never be wrong. If the ocean does or doesn’t swallow Cape Town, it’s because of climate change.

REFERENCE

Mielke et al (2025) GNSS Observations of the Land Uplift in South Africa: Implications for Water Mass Loss, Journal of Geophysical Research: Solid Earth, 09 April 2025  https://doi.org/10.1029/2024JB030350