Mandated Climate Change

Whenever a subject of interest turns into a frenzy, as with global warming or the electric car craze, you may presume the persons and organizations advocating the fanaticism will develop ways of profiting in some fashion from their activities.

A provocative article just appeared in the Wall Street Journal. Its authors, Joshua Rauh, a professor of finance at the Stanford Graduate School of Business, and Mels de Zeeuw, a senior research analyst at the Hoover Institution, are no strangers to controversy. Their article’s title, “‘Net Zero’ Will Make Wall Street Richer at Main Street’s Expense,” spells out in a clear manner how government mandates literally drive large sums of private capital into the renewable energy market and why financial firms are eager to join in the phaseout of fossil fuels. Their explanation of this can be readily understood.

“Any government mandate that a large amount of capital must be swiftly retired and re-placed creates a tremendous opportunity for financiers, no matter the underlying reason. Suppose a government announces that all machines of a certain color, say brown, must be destroyed and replaced with machines of a different color, say green. Owners of the brown machines aren’t happy, but those who can finance the new green machines will profit handsomely.

“This artificial demand distorts the efficient allocation of capital and comes at a great cost to economic prosperity. This thought experiment isn’t so different from current developments in the energy industry. Government mandates and incentives are artificially driving demand for renewable energy. The political desire to cater to climate concerns is increasingly benefiting large financial companies, which have been quick to lend their support.”

The question must be asked: Is it possible our federal government could be involved in a charade as bizarre as the authors describe? From the reports filling the media, as well as the perennial government announcements, virtually every accredited climatologist presumably verifies the presence of global warming as validated, that it is caused by the presence of the carbon dioxide we humans are responsible for emitting and will effectively destroy the habitability of the earth if humanity does not promptly modify its collective lifestyle.

As to whether there is any question the world’s climate experts thoroughly support the approved global warming scenario, I conducted a brief survey to see what might turn up to refute what the authorities purport. The information I found is revealing.

One skeptic of the global warming crusade was English-American physicist and Professor in the Institute for Advanced Study in Princeton, Freeman Dyson, recently deceased, prominent for his works in quantum field theory, astrophysics, statistics and engineering. He disagreed with the consensus on climate change, maintaining instead that advocates failed to take into account factors such as increased agriculture yield, as well as the fact positive benefits of CO2 outweigh its negative effects. In addition he was skeptical about the simulation models used to predict climate change, arguing that political efforts distract from other global problems deserving priority.

I then came upon Bjørn Lomborg, former director of the Danish government’s Environment Assessment Institute. He contends the many costly measures and actions adopted by policy makers to meet the challenges of global warming will ultimately impart only minimal impact on the world’s rising temperature. He stated specifically: “Global warming is by no means our main environmental threat.”

The next voice I encountered was that of highly-respected physicist William Happer, a Professor Emeritus at Princeton University, who served from 1991 to 1993 as director of the U.S. Department of Energy’s Office of Science. He disagrees with the current consensus on climate change, stating “Some small faction of the 1⁰ C warming during the past two centuries must have been due to increasing CO2, which is indeed a greenhouse gas, but most of the warming was probably the result of natural causes.” His final statement proved to be particularly informative: “At least 90% of greenhouse warming is due to water vapor and clouds; carbon dioxide is a bit player.”

The final individual I encountered was Ian R. Plimer, Professor Emeritus of Earth Sciences at the University of Melbourne, and former professor of geology at the University of Adelaide. He is decidedly critical of anthropogenic causes of climate change and says the vast bulk of the scientific community, including most major scientific academies, is prejudiced by the prospect of research funding. He characterizes the Intergovernmental Panel on Climate Change as an organization “related to environmental activism, politics and opportunism … and unrelated to science.” He concluded with his criticism of “greenhouse gas politics” and said “extreme environmental changes are inevitable.”

Before I escaped the Internet, with the many other climate change analyses offered there, an article from The New Republic – titled “Should People Be Allowed to Get Rich on Global Warming?” – caught my eye. Although it goes on and on, I’ve selected those lines unhappily summarizing the main point it makes.

“Imagine you are a pharmaceutical executive whose company owns the patent on a drug that treats Dengue Fever. At this point, your patent has had little use in the United States. But climate change projections suggest the mosquitoes transmitting Dengue are on the march, heading north as the temperature rises. Seeing an opportunity, you slowly, over the course of a few years, raise the price from reasonable to obscene – just in time for the flood of cases to hit. This is a clear example of unethical profiteering, using others’ vulnerability as a source of gain.

“Let me conclude by saying this profiteering example is nothing more than ‘business as usual.’ The rich and powerful will always find ways to profit off of others’ misfortune.”

One additional case study on the profitability of climate change advocacy is instructive. The personage: former Vice President Al Gore. If anyone can be credited with furthering the global warming controversy, he most certainly deserves the recognition. In 2006 – six years following his departure from the vice presidency – he founded Alliance for Climate Protection, a nonprofit organization committed to arousing the global community about the urgency of implementing comprehensive solutions to the climate crisis.

As for his financial status, you might note when he ran for President in 2000, he was moderately well off, but far from wealthy. His most valuable assets were a home in Arlington, Virginia, worth no more than $500,000, and stock holdings possibly valued at $1,000,000. However his non-profit’s involvement with environmental issues, topped off with a 2007 Noble Peace Prize for disseminating information about the world’s climate challenge, enabled the money to roll in. How much environmental activism contributed to his current net worth of $350 million is uncertain, but it was certainly a major factor.

The effort to eliminate the element carbon from the periodic table is proceeding slowly and with uncertainty. As United Nations Secretary-General Antonio Guterres recently declared, “Our fragile planet is hanging by a thread. We are still knocking on the door of climate catastrophe.”

It is understandable why many nations are unwilling to end their reliance on coal and petroleum; they simply cannot afford to do otherwise. China is building many coal-fired power plants to drive its economy – as is India. And they are not alone, for about 1,600 such facilities are planned or under construction in 62 countries. Whether the emphasis on controlling climate change is successfully enriching its advocates is not as meaningful as the apparent unwillingness of the world’s developing nations to comply with the rules in the process of being implemented by the wealthier countries.

A final comment: The United Nations set three criteria for successfully ending global warming. (1) Worldwide carbon dioxide emissions to be reduced one half by 2030. (2) The rich nations of the world to transfer $100 billion to the poor ones, (3) One half of the money to be delivered to the poor countries will assist the developing world adapt to the worst effects of climate change. With the Glasgow conference having just ended and with no binding agreements of any consequence entered into, it appears increasingly likely none of these goals will ever be achieved.

[Editor Note: Al Jacobs, 91, passed away Jan. 15 from injuries suffered in a December automobile accident. In addition to his bi-weekly Beachcomber column, he wrote a weekly column for the Dana Point Times and – for the immediate future – we will be sharing some of those submissions not appearing in our publication.]