There is a quip that if someone says, “It’s not about the money, it’s about the principle” – then it’s about the money. Applied to the climate change debate, if someone says, “It is not about the money, it is about the science” – then it is about the money.
The projected sums required to transition to zero carbon by 2050 – only speculative estimates – are staggering and, if taken at face value, perhaps the biggest investment opportunity in finance since World War II. The highest estimate came from Bank of America, which put the cost at $US275 trillion but most big banks and the United Nations put it at $US100 to $US200 trillion.
To put that in context, the value of the U.S. stockmarket is about $US50 trillion. Shifting to net zero, in other words, is a big enough play to save capitalism for decades.
It is why Western governments and the investment markets pushed net zero as part of the “Great Energy Reset”. French President Emmanuel Macron told a Climate Summit in 2023 that “the world needs a public finance shock” to fight global warming.
In November 2020, climate tzar and former governor of the Bank of England Mark Carney explained how the political and financial elites would implement the Great Reset:
“We need a whole economy transition … it’s really about looking … at the transition plans from all companies and backing those who are part of the solution and taking capital away from those who are part of the problem.”
It meant that central banks and international banks started to focus more on carbon taxation, from which they could profit, and less on managing the economy properly, especially in relation to inflation. Globalists began combining the climate change issue with international finance.
Money Walks
The climate agenda seemed at that time to be set in stone. But then came a radical change of direction. The biggest banks and management funds started to walk away.
The most important moves were made by management funds BlackRock, Vanguard and State Street, which are the largest shareholders in 88 per cent of S&P500 companies. All three have left the Net Zero Asset Managers alliance, an indication that they were being pressured. There have been similar exoduses from investment funds and major banks at the $US68 trillion Climate Action Group (CA100+) and at similar bank initiative, the Net Zero Banking Alliance.
The reason? Pressure came from conservative state governments in the United States that have charge of large pension funds. Nothing concentrates the mind of fund managers and banks more than the prospect of losing clients. So, when some state governments started threatening to withdraw capital they quickly lost enthusiasm for the cause.
Last November, for example, Texas sued BlackRock, Vanguard and State Street for allegedly breaching antitrust laws by adopting green strategies that suppress coal production, leading to higher electricity prices. Other U.S. states have made similar moves.
There was also a growing acknowledgement of the obvious: that renewable sources of energy cannot provide the necessary capacity. Back in the real world, as opposed to the fantasy world of finance and globalist politics, the consumption of fossil fuel sources of energy has altered little. According to Earth.org, fossil fuels accounted for 82 per cent of world energy provision in 2023, only slightly less than 20 years ago. While energy from renewable energy sources has increased, so has overall demand.
It all points to a shift away from the net zero agenda to something closer to economic realism, albeit slowly because the political momentum has been so great, especially in the European Union, which is deeply attracted to the centralisation of power.
Australian governments and energy providers have also made big bets on the net zero agenda. That will take time to change.
There is, though, another important sector in the financial markets that is likely to be more reluctant to move towards a more realistic stance: insurance and reinsurance companies. They almost universally were persuaded by the net zero argument because they were told that unless carbon-dioxide emissions were constrained, they would have to pay out more disaster relief because of the climatic disruption.
They were only too happy to skew their investments towards renewables and net zero options, both because it seemed to counteract some of their overall risk exposure, and it was the flavour of the month in the financial markets, offering sound returns (insurance companies make much more out of their investments than they do from premiums).
The latter incentive is fading fast, but insurance companies remain firmly in the net zero camp. “Many leading insurers have committed to achieving net zero by 2050 across three areas: internal operations, investment portfolios, and underwriting books,” says Reinsurance Business. “Among these, the decarbonisation of underwriting portfolios has the most direct impact on energy sector clients.”
Big reinsurers Swiss Re, Hannover Re and Lloyds of London all jumped on board, helping to skew investment towards renewables. Spending on clean energy projects is nearly double the combined global spending on oil, gas, and coal, according to the International Energy Agency’s (IEA) 2024 World Energy Outlook.
But in 2023, the biggest reinsurer, Munich Re, withdrew from the Net-Zero Insurance Alliance (NZIA), saying it preferred to pursue its “climate ambition to reduce global warming individually”. The cracks even in this sector are starting to appear, albeit slower than in other parts of the financial system.
What may unsettle insurers is the growing evidence that storage of renewable energy carries unexpected risks. Lithium batteries keep catching fire. Locally, the Australian Competition and Consumer Commission (ACCC) is urgently pushing for a recall of LG home storage batteries.
Fire Danger
There have been lithium-ion battery fires in South Australia and Victoria, including in densely populated Melbourne. “When lithium-ion batteries catch fire, they don’t just burn, they can release a mix of chemicals into the air and water,” commented Sally El Meragawi, a Monash University expert in mechanical and aerospace engineering.
Internationally, a fire at the Moss Landing Energy Storage Facility in Monterey county, burnt out the world’s largest lithium battery storage (300 megawatts). It burned for four days and 1,200 locals had to leave their homes. It is unlikely that insurers anticipated such risks and there is likely to be a reassessment of these sustainable forms of energy.
Some local residents are now suing the owners of the plant, Pacific Gas & Electric Co., for failing to take appropriate safety measures that led to the fire damaging their health.
A further blow to the climate cartel was the election of Donald Trump to the U.S. presidency. Trump has made it very clear that he wants to base his policy of energy independence on increasing fossil fuel production inside the United States. It will take time, but it is the direction being scoped out.
Energy is central to great power politics and economics. China, whose success in manufacturing is deeply unsettling U.S. leadership, is partly driven by a reliance on old energy technologies: 61 per cent of the country’s energy comes from coal-fired power plants and the Chinese Communist Party has announced that more are to be built. The U.S. leadership knows it has to do something to catch up.
The claims supporting the global climate reset have persistently lacked predictive validity, a necessary precondition in the physical sciences. Rarely has the modelling convinced; and the scare campaigns, such as the nonsense from media creation Greta Thunberg, are just public relations pantomime. It is increasingly obvious that the routine threats that “time is running out” are just cynical scare mongering.
Previously the fact that it was blatant deception did not matter because the climate proponents enjoyed the support of the financial institutions and governments, which meant reasonable debate was suppressed. They are losing that support.
Financial fads usually disappear with great speed as the money moves elsewhere. It will be slower with governments. They are deeply ideologically committed to net zero with a vast array of government regulations and funding for renewables, green government bureaucracies, local and global environmental organisations and agencies. They will not reverse this easily.
But in the end, it is always about the money, and financial sentiment is turning. The markets are realising that the massive investment returns will never materialise.
Undoing the economic damage will take time, but eventually reality will even filter down to Australian policymakers. But don’t expect any among them to take responsibility for their delusions and errors.
It is clear – go Nuclear.
Clearly the sooner electric vehicles are banned the better. All other road users are subsidising their use of the roads. The govt fuel taxes go towards road building and maintenance but EV owners pay nothing for using the roads.
It seems that all windfactories and solar farms are only being built with taxpayer subsidies as they are uneconomic. The cost to build, high R&M costs, short life before needing to be rebuilt , enormous cost to remove the old wind towers and only producing any electricity for about 20% of the time during the year makes them uneconomic.
As well as the renewables, there must be a 100% standard generation system that can supply 100% of electricity needs all the rest of the year. In other words we have the cost of building 2 generation systems when we only need to pay for 1. This 2 sets of generation equipment guarantees the vast increases in power costs that have started to add onto our quarterly power bills.
My guess is that in 40 years time pictures of wind towers and the ruins of old towers that were never cleaned up will be all that remains of this stupid idea. This ignores the whole fraudulent idea of human caused global warming that has led to this current economic and social disaster.
Clearly the sooner electric vehicles are banned the better. All other road users are subsidising their use of the roads. The govt fuel taxes go towards road building and maintenance but EV owners pay nothing for using the roads.
It seems that all windfactories and solar farms are only being built with taxpayer subsidies as they are uneconomic. The cost to build, high R&M costs, short life before needing to be rebuilt , enormous cost to remove the old wind towers and only producing any electricity for about 20% of the time during the year makes them uneconomic.
As well as the renewables, there must be a 100% standard generation system that can supply 100% of electricity needs all the rest of the year. In other words we have the cost of building 2 generation systems when we only need to pay for 1. This 2 sets of generation equipment guarantees the vast increases in power costs that have started to add onto our quarterly power bills.
My guess is that in 40 years time pictures of wind towers and the ruins of old towers that were never cleaned up will be all that remains of this stupid idea. This ignores the whole fraudulent idea of human caused global warming that has led to this current economic and social disaster.
I do not agree with Dutton’s “Go Nuclear “. It will cost a fortune + take years to build+ put Australia in even more debt forever to the UK which has bled us (our gold ) since Australia was founded. It treats us still as a colony. Australia only paid its UK long time -WW2 debt +interest in about 2000 when Howard sold our gold reserves ! Dutton said on Channel 9 he is no follower of Trump’s reforms. He is very much a Globalist tied to the Overseas Investors who bleed us . We should return to State-owned coal -fired Power plants as we have enormous coal reserves which we sell cheaply to India + China. As an ex-South Aussie, I remember the Atomic Bomb explosions at Maralinga which blinded an Aborigine (+ others) I knew, who received Compensation. I remember the spectacular sunsets , the radio -active clouds which drifted over Adelaide + rural Western Victoria. We seem to have forgotten the people killed by Chernobyl + the deformed babies. I knew a man who worked in 1990s burying nuclear waste in the SA desert. The way it was secured did not see very safe to me ! I wonder if he is stil alive or dead of radiation poisoning ? I suspect this ” build nuclear”is just a ruse to bury ALL UK’s waste ( which has never been disposed of + is sitting in deteriorating nuclear submarines in UK ) in Australia as a dumping ground! Ex-Submariner Patrick MP (SA ) is leading a group to prevent transport of nuclear waste along residential Victoria Drive, Osborne 15 km from Adelaide’s CBD . Decommissioning nuclear waste is to be done close to houses? What would Tony Abbott do ,if he were PM again I wonder ? He is a highly educated Rhodes scholar, an Australian patriot with some principles, not just some cop ! I remember him about 20 years ago in Fullers ‘Bookshop with Lord M -(whose name I have forgotten )both anti-Renewables at the launch of a highly technical , scientific book debunking Climate Warming , now Climate Change ! All a confidence trick for the Money Markets to make enormous profits at our expense while we struggle to pay Power bills. Desperate people will clutch at straws, hence a Nuclear Con? I hope I am wrong !