Energy

Not a Paris Accord signatory but the US is the best performer

The International Energy Agency (IEA) said this week that the United States achieved the largest absolute decline in GHG emissions in 2019. Once again proving that one doesn’t need to sign up to the Paris Accord to achieve reductions and pay for other nations who can’t get their own house in order. Isn’t it funny how the free market is more efficient than feel good regulation where tokenism is enough?

The IEA wrote,

“…a fall of 140 Mt, or 2.9%, to 4.8 Gt. US emissions are now down almost 1 Gt from their peak in the year 2000, the largest absolute decline by any country over that period. A 15% reduction in the use of coal for power generation underpinned the decline in overall US emissions in 2019. Coal-fired power plants faced even stronger competition from natural gas-fired generation, with benchmark gas prices an average of 45% lower than 2018 levels. As a result, gas increased its share in electricity generation to a record high of 37%. Overall electricity demand declined because demand for air-conditioning and heating was lower as a result of milder summer and winter weather.a fall of 140 Mt, or 2.9%, to 4.8 Gt. US emissions are now down almost 1 Gt from their peak in the year 2000, the largest absolute decline by any country over that period. A 15% reduction in the use of coal for power generation underpinned the decline in overall US emissions in 2019. Coal-fired power plants faced even stronger competition from natural gas-fired generation, with benchmark gas prices an average of 45% lower than 2018 levels. As a result, gas increased its share in electricity generation to a record high of 37%. Overall electricity demand declined because demand for air-conditioning and heating was lower as a result of milder summer and winter weather.”

Now if only people would pick on China to get it to reduce its emissions which are, by its own admission, not stopping until 2030 at the earliest.

Perhaps Australia should ponder the fact that although we have all of the raw inputs on our door step to lower emissions and cut electricity prices, we think tokenism via renewables is the way forward.

Yes, we’re often thrown stats that renewables could have powered ‘x’ number of homes for ‘y’ number of days but the reality is taking a snapshot at the rare attainment of “peak” output and celebrating it as though it is the average is misleading. That is why so many countries, including Japan, are building more coal-fired power stations.

FNF Media thinks that renewables should be true to the zero emissions cause and be built under guidelines that they mustn’t use any materials from the fossil fuel world nor use coal or gas fired electricity in their production. On top of that recycling of wind and solar must be included in the price.

Global Coal-fired power statistics – Diary of a Wimpy Kid

What is it with the self-flagellation over coal-fired power? The announcement that the Morrison government intends underwriting “ONE” coal-fired power plant brings with it the hysteria of publicly force-feeding kindergarten kids with highly radioactive sludge at recess time. Naturally, none of this outrage is based on facts. It is all tokenism.

Here are the stats for coal-fired power stations globally:

Coal Capacity

Australia has only 2.5% of the coal-fired capacity of China. Versus our total of 58, China has almost 3,000 in service.

Coal Operation

Coal-fired plants that have been announced, are under construction, permitted and pre-permit stage around the globe total 1,046. Where are the climate activists in China, India, Vietnam, Pakistan, Indonesia, Bangladesh, Philippines, Japan, Russia, Mongolia, Botswana, Nigeria, Zimbabwe, South Korea, Thailand, Malawi, Serbia, Bosnia & Herzegovina, Turkey, Egypt, Poland and South Africa?

New Coal

The mt CO2-e output of each country is as follows. Note China produces 36x more CO2.

Coal CO2

So China and India are responsible for 58% of coal-fired power generated emissions and will be 50% of all new capacity additions going forward.

Coal CO2 Contrib

China has 100x more coal-fired power on the drawing board than Australia yet we behave as though we are the biggest climate sinners on the planet! China and India have consistently been 70%+ of all new coal-fired plant capacity additions since 2006.

Coal Capa

So do Australian activists honestly think that canning one domestic new coal-fired power plant will have the slightest effect on global temperatures when our Asian and African neighbours are full speed ahead?

There have also been arguments made by activists that our coal exports should be counted against our totals in terms of emissions. Fine. Then by that logic, FNF Media expects the total emissions of every car sold in Australia (including fuel consumed) to be charged back to Japan, China, Korea, America and Europe. Every aircraft, every electronic device, every imported building material, crane, bulldozer, wind turbine, solar panel and truck that transports it. It would equal itself out pretty quickly.

Our global neighbours seem to be prioritizing national growth over climate alarmism. For it would appear they do not have the same level of brain-washed fanatics telling our kids that they have inherited a planet that will make them the last people on earth to survive.

The quickest route for Australia to end its prosperity is to cower to this insanity. To fall in line to the idea that renewables are cheaper (they aren’t) and more green is preposterous. Wind turbine blades are being put into landfill and solar panels are toxic to recycle and likely to end in the same place. Germany is giving us a great beta test case of how renewables are failing them. Indulge yourself here.

Coal-fired plants in Australia are forced to run sub-optimally to cater to the demands of the fluctuations in renewables which must be given priority to the grid. Ask anyone in large scale manufacturing how being forced to run at fluctuating levels destroys efficiency. It really is that simple.

Coal Price

Thermal coal prices are far from going out of control. So our power plant electricity generation isn’t becoming pricier due to input costs.

We have to stop becoming emotional about numbers and data and look at what they are telling us rather than build a narrative and reverse engineer the results. It always catches up to us in the end.

Our government needs to show some backbone and provide easy to understand data about reality. Rather than fold at the confected outrage which appears backed by crony capitalists.

Now that former PM Turnbull is weighing in on the debate (contradicting comments made while PM) saying that it is lunacy to pursue coal. Given his record of poor judgment, it stands to reason building cleaner coal-fired power plants is a sensible way to lower energy prices and remain a competitive global economy.

As FNF Media likes to say, the numbers will always be right in the end. Fiddle them at your peril.

Telstra’s CEO should close down operations to be on the right side of history

Telstra CEO Andy Penn has suggested that climate change will be the “defining challenge” of the decade but proclaims he doesn’t want to be drawn into the government policy debate. 

He has called for “more urgent action on climate as changing weather patterns deliver more frequent bushfires, floods, droughts and storms” at an American Chamber of Commerce lunch yesterday. 

What a pity that the UNIPCC’s March 2018 report on weather extremes (with respect to anthropogenic induced global warming) contradicted Mr Penn:

“…There is low confidence in observed trends in small-scale phenomena such as tornadoes and hail because of data inhomogeneities and inadequacies in monitoring systemsin some regions droughts have become less frequent, less intense, or shorter, for example, in central North America and northwestern Australia. There is limited to medium evidence available to assess climate-driven observed changes in the magnitude and frequency of floods…low confidence for the attribution of any detectable changes in tropical cyclone activity to anthropogenic influences..low confidence in projections of changes in extreme winds.. low confidence in projections of changes in monsoons…low confidence in wave height projections…overall low confidence because of inconsistent projections of drought changes…low confidence in projected future changes in dust storms…low confidence in projections of an anthropogenic effect on phenomena such as shallow landslides.”

Never mind what the scientists ‘actually’ think. Just run the narrative of the activists instead to prevent Extinction Rebellion nutcases from super glueing themselves to the lobby entrance. FNF Media could indulge you on what the scientists actually think of the IPCC. For those interested please see the link here. Spoiler alert – it is exceedingly critical.

Mr Penn said that businesses and individuals should become aware of their carbon footprints. He admitted Telstra is one of the biggest consumers of electricity in the country as data storage needs explode by up to 50% per annum.

If it is such a massive concern, Penn should put Telstra’s shareholder money where its mouth is and charge customers extortionate fees for data storage and data usage such that he can force them to lighten their evil digital-driven carbon footprint. That way he can slow his electricity consumption. Then, Telstra can await all of those woke customers fleeing Vodafone and Optus in droves to sign up for inferior service for more money. Not quite sure what shareholders would think of that…

Even better he could suggest to the board that they close the business for good for the sake of the planet. After all, by going the whole hog he can sleep safe in the knowledge that his kids and grandkids will know he was on the right side of history (the standard alarmist playbook) before we’re swept away by the rising sea levels. Think of all that energy saved.

Unfortunately, we’ve seen this vacuous corporate virtue signalling tokenism before. Who could forget the comments made by Josh Bayliss, the CEO of Virgin Group? He said,

“It’s definitely true that right now every one of us should think hard about whether or not we need to take a flight.”

Why didn’t he close down the airlines in the portfolio? Instead of waiting for his customers to grow a conscience via flight shaming and do the right thing why not force their choice? The obvious answer is that it’s hypocritical in the extreme.

The International Air Transport Association (IATA) has already positioned behind the flight shaming movement to do its bit for climate change. In a two page flyer, it covered the idea that we reckless passengers must consider our carbon footprint but at the same time help the U.N. raise $40bn in taxes, sorry ‘climate finance,’ between 2021 and 2035.

The Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA) is the vehicle which the UN’s International Civil Aviation Organization (ICAO) intends to liberate us from our sins and help fund the waste so endemic in the NY based cabal. Wherever the UN is involved expect a sinister agenda behind the virtue.

All airlines have been required to monitor, report and verify their emissions on international flights since Jan 1, 2019. Operators will be required to buy “emissions units” from the UN. If one asked the UN would it prefer emissions to be cut or taxes to be raised, it would select the latter every time.

Still, the easiest way to gauge public fear on climate change is not via a biased think-tank poll but monitor individual consumption patterns. It isn’t just population growth, because it isn’t growing  at these rates. Three examples:

  1. Aircraft demand – In 2019, Boeing reported airlines will need around 44,000 new commercial aircraft worth $6.8 trillion by 2038, vs. 43,000 planes worth $6.49 trillion estimated in 2018. There are currently 25,830 commercial airliners in service.
  2. Smartphones – estimated that the number of global mobile subscriptions could be 13.8 billion in 2025 and 17.1 billion in 2030. The number of global mobile subscriptions has already reached 6.7 billion in 2013. Smartphones will grow from 6.3bn units in 2020 to 12.1 billion by 2030.
  3. Energy Consumption  – the U.S. Energy Information Administration (EIA) projects that world energy consumption will grow by nearly 50% between 2018 and 2050. Energy consumed in the buildings sector (including residential and commercial structures), increases by 65% between 2018 and 2050, from 91 quadrillion to 139 quadrillion Btu. Rising income, urbanization, and increased access to electricity lead to rising demand for energy.

So good luck trying to get people to feel awkward about their individual carbon footprints. They’ll be to busy charging their mobile devices while booking the next overseas holiday to the Maldives.

50 years of Davoz. The Global Shapers will be the rope the Multistakeholders use to hang the rest of us with

Davos is upon us. That event where the world’s elite congregate via private jet and helicopter transport to tell the rest of us to reconsider our use of a second hand SUV to take the kids to soccer practice for the sake of the planet.

This event marks 50 years. What started as a good idea is now nothing more than a networking event for crony capitalists looking to exploit gutless governments into backing their schemes and ridiculing those that don’t sign up for multi-million dollar memberships.

We should applaud the World Economic Forum (WEF) for helping perpetuate the culture of systemically brainwashing our youth.

In the 2020 Global Risks report, we get the following table which highlights adults (‘Multistakeholders’) and the youth (‘Global Shapers’). Who knew that environmental issues took the Top 5 positions among the kids? Privacy be damned. Adults were more concerned with politics and trade wars. Hint hint President Trump.

The long term outlook produced even more drama. The adults seem to have appeased the kids on climate but their private jet powered life styles at the very least mention global governance failure and the risk of asset bubbles popping.

The youth on the other hand ramped up the global warming rhetoric to 11. The Top 6 concerns are climate and #8 turns out to be about climate refugees. That’s the result of a Marxist education, one that NZ is only too proud to boast about. Forget rational debate to engage kids on how to see two sides of an argument. They will be admonished for speaking out against the orthodoxy. Or doxxed on social media. Or both. Is it any wonder we have a mental health crisis?

Although it is worth mentioning that the deteriorating global economic fundamentals highlighted in the same report risk handing the kids their ideal utopia by way of a deep recession thanks to excessive global debt levels and low interest rates. It is unlikely these self-entitled ‘Global Shapers’ have ever contemplated, much less lived through such an outcome with all of their earth ending hysteria. Best tell them that if they pursue their dream of 100% renewables and zero carbon emissions they can bask in the shared misery of having let their teachers blindly mislead them by never challenging them on anything. Experience is a hard teacher. They’ll get the test first and the lesson afterwards. But such reality will be too late and take decades to fix.

Perhaps these ‘Global Shapers’ would do well to study the reasons why inequality and social upheaval will continue to grow if the world pursues the barking mad drive to decarbonise the world. The report even makes a point to talk of the disruption in France by the yellow vests. It noted,

In France, for example, the persistence of the “gilets jaunes” movement had caused businesses more than US$11.4 billion in losses by December 2019 and complicated the government’s plans for economic revival.

The yellow vests are protesting over regulation and climate related taxes.

Under the chapter of ’10 years left’, we got the following passage which is full of untruths as to beggar belief.

Governments, markets and, in an increasing number of societies, voters are awakening to the urgent realities of climate change—it is striking harder and more rapidly than many expected. The last five years are on track to be the warmest on record. Climate-related natural disasters such as hurricanes, droughts and wildfires are becoming more intense and more frequent, reportedly now averaging a disaster a week. Polar ice is melting more quickly than anticipated, with drastic implications for sea levels and coastal populations. Severe weather is worsening: the last year witnessed unprecedented wildfires and devasting storms across the globe, sea ice loss in the Arctic and record-breaking heatwaves in Europe.”

Yet how was it that Queenslanders voted to keep the incumbent government in power because of its support for a coal mine? Why is China committing to 300-500 new coal-fired power plants?

How is it that the UN has reported categorically that it has ‘low confidence’ on any shift in the behaviour of natural disasters? In the UNIPCC’s March 2018 report on weather extremes with respect to anthropogenic induced global warming) it says,

“…There is low confidence in observed trends in small-scale phenomena such as tornadoes and hail because of data inhomogeneities and inadequacies in monitoring systemsin some regions droughts have become less frequent, less intense, or shorter, for example, in central North America and northwestern Australia. There is limited to medium evidence available to assess climate-driven observed changes in the magnitude and frequency of floodslow confidence for the attribution of any detectable changes in tropical cyclone activity to anthropogenic influences..low confidence in projections of changes in extreme winds.. low confidence in projections of changes in monsoonslow confidence in wave height projections…overall low confidence because of inconsistent projections of drought changes…low confidencein projected future changes in dust storms…low confidence in projections of an anthropogenic effect on phenomena such as shallow landslides.”

Where is the evidence of 10s of millions of climate refugees fleeing rising sea levels an coastal populations?

Virginie K. E. Duvat of the Institut du Littoral et de l’Environnement, University of la Rochelle-CNRS, La Rochelle sponsored by the French National Research Agency; French Ministry of Environment, Energy and Oceans (MEEM) wrote.

Analysis “using tide gauges and satellites showed 30 Pacific and Indian Ocean atolls including 709 islands, revealed that no atoll lost land area and that 88.6% of islands were either stable or increased in area, while only 11.4% contracted.

This confirms a 2010 study by Webb & Kench which revealed,

that 86% of islands remained stable (43%) or increased in area (43%) over the timeframe of analysis. Largest decadal rates of increase in island area range between 0.1 to 5.6 ha. Only 14% of study islands exhibited a net reduction in island area. Despite small net changes in area, islands exhibited larger gross changes.

There is even reference to properties sold in Florida and the risk they become uninsurable. Then why is the Florida house price index at record highs?

What about record breaking cold waves in Europe and Canada? Unprecedented wildfires and storms? Not according to the data.

Unprecedented media sensationalism more like it.

One comment made in the report was the fact that 14x more women die than men during natural disasters. Is this proof there are only two biological genders or are the studies on non-binary deaths during disasters incomplete? This may have to be a separate break out session.

The report also issues this stark warning.

Aside from a number of vanguard first-mover champions, most companies, too, appear ill-equipped to address climate risk.

Ill-equipped or paying lip service?

Take Josh Bayliss, CEO of Virgin Group. He said,

“It’s definitely true that right now every one of us should think hard about whether or not we need to take a flight.”

Why doesn’t he close down the airlines in the portfolio? Instead of waiting for his customers to grow a conscience and do the right thing why not force their choice? The obvious answer is that it’s hypocritical.

Yet even our own ASIC feels the need to force the minds of corporates to deal with climate change. Forget the data that shows reporting on the subject has collapsed since 2011 from an already low level because the free market mechanism reveals that pricing to offset such fears simply don’t exist in any meaningful way. The regulator’s wish to enforce reporting only proves it needs to construct a narrative to ward off a problem that doesn’t rate much of mention other than virtue signaling.

Perhaps this urgency to get regulators to pressure corporate leaders showed up with this snippet in the WEF report,

In the World Economic Forum’s survey of business leaders, none of the top 10 risks globally are environmental, suggesting a critical blind spot…industry partners of the World Economic Forum ranked environmental risks higher than business leaders surveyed more broadly…Overall, lack of consistent awareness-raising among business leaders may create first-mover advantages for some, but it also potentially demonstrates the much more concerning overarching risk: that many businesses may not be planning for the physical and financial risks that climate change may have on their activities and across their value chains.

So in plain English that says that the majority of corporates that don’t pay into the WEF’s Davos slush fund are evil and if we can get the governments of the world to force change, its members will be the first beneficiaries of any new climate legislation.

Yes, Global Shapers are merely the rope that the Multistakeholders will use to lynch the rest of us with.

COP 25 Delegates by nation & aspirational virtue

Image result for brown envelopes bribe

Carbon Brief has done an admirable job denoting how many delegates from each country are attending the COP25 boondoggle, sorry, climate conference. It notes,

“The country with the most delegates is, by some distance, Côte d’Ivoire with 348. The West African nation also brought the largest delegation to COP23 in Bonn in 2017 – with 492 participants – and the fourth largest to COP24 in Katowice in 2018, with 208.

Côte d’Ivoire’s delegation is more than 50 people larger than the second-placed country, which is the Democratic Republic of the Congo (DRC) with 293. The DRC also had the second-largest number of delegates at COP24 (with 237) and the third largest at COP23 (340).”

40.7% of delegates are from Africa. Similar to past years. Clearly, these COP summits create a fantastic opportunity to prey on the guilt of the West. As FNFM noted last year, the correlation with the number of delegates and the corruption index was significant.

India sent 35 to COP25 down from 182 at COP21. China sent 76, down from 326 respectively although it is more likely they sent investment bankers to see which African nation they can bribe to plunder their resources.

Australia has sent only 20 delegates but we should champion the fact that 65% of them were women. We even beat New Zealand’s 19 delegate field which only had 58% women. That should please those with Kiwi envy.

In what should rile the gender equality activists and Trump haters, the Paris Accord spurning Americans had higher proportional female representation than the EU or Norway. So much for capitalist pigs shunning socialist norms!

Syria had 100% female representation with the sole delegate. However the male patriarchy was perpetuated thanks to zero female representation from Pakistan, Yemen, Eritrea, Tajikistan, Turkmenistan, Mauritius and Libya.

Naturally nothing will come of COP25 until a grandiose statement to tackle the climate emergency (FNFM is surprised the Wollongong City Council hasn’t sent a team after the unanimous declaration to “adopt an aspirational emissions reduction target of zero emissions by 2030 for its own operations“) comes in the death throes of the last day when the most hot air is produced.

EU climate emergency vote is way worse than you think

What took the group thinking EU so long? What better way to justify more taxation and wealth redistribution than to declare a “climate emergency”? What you are about to read is a perfect explanation of how little credibility exists in the European Parliament (EuroParl).

In black and white, EuroParl noted,

EU countries should at least double their contributions to the international Green Climate Fund, Parliament says. EU member states are the largest providers of public climate finance and the EU’s budget should fully comply with its international commitments. They also note that pledges by developed countries do not meet the collective goal of 100 billion USD per year as of 2020…Finally, they urgently call on all EU countries to phase out all direct and indirect fossil fuel subsidies by 2020.

Now, this is where it gets curious. Take a look at this file (from page 8) and ask yourself, how many amendments to resolutions within the “climate emergency” conversation were rejected supporting the overall declaration passing 429 in favour, 215 against, 19 abstaining?

Here is one amendment that was rejected 95, 563, 9 by MEPs (you can’t make this stuff up),

Recalls that climate change is one of the many challenges facing humanity and that
all states and stakeholders worldwide must do their utmost to measure it
scientifically so that policy, and especially spending, is based on observable facts and not on apocalyptic fearmongering or unreliable models; emphasises that there is
no scientific consensus on what percentage of climate change is anthropogenic and
what percentage is natural

Seems fair enough! Basing decisions affecting 550 million constituents on real hard data is the right thing to do, no? Clearly not. Shut up and follow the religious cult and demand followers cough up twice as much into the collections pot. The lobbyists must be well pleased.

Or,

“Text as a whole without the words: ‘urgently’, ‘and implement’ and ‘to net-zero
emissions by 2050″ defeated 101, 555, 15.

Isn’t it striking that the majority of MEPs won’t even consciously vote in favour of making sure funds are spent appropriately? Nope, bow down and shut up. Otherwise face being cut off as we get to observe from the EuroParl documents below.

This is what an MEP from Northern Ireland, Claire Fox, had to say,

Madam President, I voted against the climate and environmental emergency motion because I’m really concerned at the hyped-up anti-science scaremongering that’s terrifying young people, telling them that billions will die, that there’ll be a collapse of civilisation, a lot of the rhetoric coming out of Extinction Rebellion and echoed in the debate over the last few days. I think that the fact that we voted against an amendment today that said that we should be committed to bringing the environmental subject back to rational discussion, and we rejected it, admits that actually, we’re having an irrational discussion. This becomes advocacy and propaganda, rather than science. There’s no scientific evidence from the IPCC or anyone else about the extinction of humanity, and we should be very careful about claiming that anthropological climate changes cause floods and droughts, which we have been doing quite casually during the last few days. In fact, the IPCC says that such issues are probably caused by socio-economic conditions, and we forget socio-economic conditions too much and demand, in fact, as this Parliament has done, decarbonisation, which will lead to eco-austerity, massive price hikes in energy, and ordinary working people paying the cost for scaremongering and...

(The President cut off the speaker)

or another Northern Irish MEP Robert Rowland,

Madam President, I’d just like to reiterate what my colleague said. I also rejected the COP24 resolution. I may not be an Economics Professor, but I do profess to understand economics. They also call it the dismal science, but when it comes to the climate emergency, I would describe the apocalyptic forecasts as nothing but science fiction. The adoption of these policies today, and the aim of carbon neutrality by 2050 is nothing short of reckless and the most extreme example of economic illiteracy I’ve ever seen. The fact that amendments were rejected demanding a full impact assessment shows rank indifference to the cost and practicality of aggressive climate policies.

One thing I can say for certain is that the impact of net-zero makes the consequence of any form of Brexit look puny by comparison. Dieter Helm, Professor of Energy and Economics at Oxford University, was right when he said: ‘We should be honest that it is a huge industrial undertaking, and it will have significant cost. These are enormous industrial activities, there is nothing in history that looks like this outside of wartime.

In my own country, our own Chancellor has put that cost at over one trillion pounds, or almost 2% of GDP per annum. It is an insane policy.

If the EU truly wishes to make itself even less competitive, in the face of some of the world’s highest electricity prices, they are only self-flagellating in an already flailing economy which continues to slow to 5-year lows. If the EU truly looked at its record since 2007, it would see its policies have delivered 40 million more people into poverty, a number which totals 118 million people, or 23% of the EU population!

If there was ever a bigger load of intellectual dishonesty posted by the EU it would be this. It states that,

Climate emergency declarations in 1,195 jurisdictions and local governments cover 545 million citizens with 53 million of those living in the United Kingdom. This means in Britain now roughly 80 per cent of the population lives in areas that have declared a climate emergency.

The irony if such a statement is that there is no way in the world that 545 million citizens are in agreement within those 1,195 jurisdictions. 53mn Brits? Seriously? In Australia’s case, many declaring climate emergencies have been local green-left councils who have made idle gestures without backing it up with realities. Constituents have not been asked. Windfarm plans for Warringah are not on the agenda.

The greatest irony with the EU is that they classify biomass (which is more polluting than coal) as a renewable and gives it a zero-carbon emission weighting provided a tree is planted per tree burnt. Sadly trees take 40 years to fully grow to be able to offset that produced. However, we will discover that the fine print taketh away the wonderful headlines.

Will the Poles ditch their coal industry to comply or face savage reprisals from Brussels? Will the EU guarantee Poland gets huge subsidies to pay for its termination? Which country would be so blind as to put their livelihoods into the hands of the EU!? The Greeks might have a view as do the Brits.

This action will spectacularly blow up.

By all means ride the short term wave of renewables stocks but be sure to line up all of those nasty fossil fuel companies into the portfolio that get pummeled by financial markets because the type of economic disaster that will beset the EU will only create the conditions where the peons will revolt and force a return to the way things were. Efficient, cheap and reliable forms of energy that will make a proper dent in the poverty line rather than promises and handouts.

The EU needs to learn the lesson that “Charity is injurious unless it helps the recipient to become independent of it.” It won’t be long before the youth of today get to embrace their love for socialism. Experience is a hard teacher. They’ll get the test first and the lesson afterwards.

This can only end in tears

ECB.png

As Sweden’s economy slows to the worst economic growth rate in 5 years under a negative interest rate policy, one would think the Swedish Central Bank (Riksbank) would be seeking to prudently manage its asset book on the basis of appropriate risk/reward as opposed to lecturing Australia and Canada on their respective carbon footprints. What we are witnessing is yet another discrete move by authorities to manipulate markets based on fantasy rather than fact.  The hypocrisy is extreme as we shall discover.

While the Riksbank should have complete freedom in how it wishes to deploy capital, we should view this is a pathetic sop to the cabal at the European Central Bank (ECB). Since when did central bankers become experts on climate change? The RBA is no better. Deputy Governor, Guy Debelle, gave a speech in March 2019 on the risks posed by climate change which based prophecies on the data accident-prone IPCC and Bureau of Meteorology. Why not seek balance? Easier to fold to group think so as not to be outed as a pariah. Utterly gutless. Our own APRA is also pushing this ridiculous agenda on climate change reporting. It is willful negligence.

While it is true that on a per capita basis, Australia and Canada’s emissions are higher than the global average, why doesn’t the Riksbank give us credit for lowering that amount 11.4% since 2000? Even Canada has reduced its carbon emissions by 7.3% over the last 18 years. Admittedly Sweden’s emissions per capita have fallen 21.9% according to the IEA. Greta will be happy.

Why hasn’t the Riksbank taken China or India to task for their 169.9% or 94.7% growth in CO2 emissions respectively? There are plenty of oil-producing nations – Qatar, UAE, Bahrain, Saudi Arabia and Oman that have worse per capita outcomes than Australia or Canada. Do these countries get special dispensation from the wrath of the Riksbank? Clearly.

The US has pulled out of the Paris Climate Accord. If the US has marginally lower emissions per capita (15.74t/CO2-e) than Australia (16.45t/CO2-e), isn’t a double standard to write,

The conditions for active climate consideration are slightly better in our work with the foreign exchange reserves. To ensure that the foreign exchange reserves fulfil their purpose, they need to consist of assets that can be rapidly converted to money even when the markets are not functioning properly. Our assessment is that the foreign exchange reserves best correspond to this need if they consist of 75 per cent US government bonds, 20 per cent German and 5 per cent British, Danish and Norwegian government bonds.

Essentially Riksbank commitment to climate change is conditional. The US which is responsible for 13.8% of global emissions can be 75% of holdings. Australia at 1.3% can’t. No doubt sacrificing Queensland Treasury Corp, WA Treasury Corp and Albertan bonds from a Riksbank balance sheet perspective will have little impact on the total. In short, it looks to be pure tokenism. The Riksbank has invested around 8% of its foreign exchange reserves in Australian and Canadian central and federal government bonds. So perhaps at the moment, it is nothing but substitution from state to federal. Why not punish NSW TCorp for being part of a state that has 85%+ coal-fired power generation?

At the very least the Riksbank admits its own hypocrisy.

The Riksbank needs to develop its work on how to take climate change into consideration in asset management. For instance, we need a broader and deeper analysis of the issuers’ climate footprint. At the same time, one must remember that the foreign exchange reserves are unavoidably dominated by US and German government bonds. The Riksbank’s contribution to a better development of the climate will, therefore, remain small. This is entirely natural. The important decisions on how climate change should be counteracted in Sweden are political and should be taken by the government and the Riksdag (parliament).

Still, what hope have we got when Benoît Cœuré, member of the Executive Board of the ECB, lecturing those on “Scaling up Green Finance: The Role of Central Banks.” He noted,

2018 has seen one of the hottest summers in Europe since weather records began. Increasing weather extremes, rising sea levels and the Arctic melting are now clearly visible consequences of human-induced warming. Climate change is not a theory. It is a fact.

Reading more of this report only confirms the commitment of the ECB to follow the UN’s lead and deliberately look to misallocate capital based on unfounded claims of falling crop yields and rising prices (the opposite is occurring) and rising hurricane and drought activity (claims that even the IPCC has admitted there is little or no evidence by climate change). Sweden is merely being a well-behaved schoolboy.

Cœuré made the explicit claim, “The ECB, together with other national central banks of the Eurosystem, is actively supporting the European Commission’s sustainable finance agenda.

CM thinks the biggest problem with this “agenda” is that it risks even further misallocation of capital within global markets already drowning in poorly directed investment. It isn’t hard to see what is going on here. It is nothing short of deliberate market manipulation by trying to increase the cost of funding to conventional energy using farcical concocted “climate risks” to regulate them out of existence.

Cœuré made this clear in his speech,

once markets and credit risk agencies price climate risks properly, the amount of collateralised borrowing counterparties can obtain from the ECB will be adjusted accordingly.

What do you know? On cue, Seeking Alpha notes,

Cutting €2bn of yearly investments, the European Union will stop funding oil, natural gas and coal projects at the end of 2021 as it aims to become the first climate-neutral continent.

All CM will say is best of luck with this decision. Just watch how this kneeling at the altar of the pagan god of climate change will completely ruin the EU economy. The long term ramifications are already being felt. The EU can’t escape the fact that 118mn of its citizens (up from 78m in 2007) are below the poverty line. That is 22% of the population. So why then does Cœuré mention, in spite of such alarming poverty, that taking actions (that will likely increase unemployment) will be helped by “migration [which] has contributed to dampening wage growth…in recent years, thereby further complicating our efforts to bring inflation back to levels closer to 2%.

Closer to home, the National Australia Bank (NAB) has joined in the groupthink by looking to phase out lending to thermal coal companies by 2035. The $760 million exposure will be cut in half by 2028. If climate change is such a huge issue why not look to end it ASAP? This is terrible governance.

Why not assess thermal coal companies on the merits of the industry’s future rather than have the acting-CEO Philip Chronican make a limp-wristed excuse that it is merely getting in line with the government commitment to Paris? If lending to thermal coal is good for shareholders in 2036, who cares what our emissions targets are (which continue to fall per capita)? Maybe this is industry and regulator working hand-in-hand?

The market has always been the best weighing mechanism for risk. Unfortunately, for the last two decades, global central bank policy has gone out of its way to prevent the market from clearing. Now it seems that the authorities are taking actions that look like collusion to bully the ratings agencies into marking down legitimate businesses that are being punished for heresy.

This will ironically only make them even better investments down the track when reality dawns, just as CM pointed out with anti-ESG stocks. Just expect the entry points to these stocks to be exceedingly cheap. Buy what the market hates. It looks as though the bureaucrats are set to make fossil fuel companies penny stocks.