Let’s first be clear about what Stuart Kirk, the HSBC executive who has sparked a Twitter witch hunt and is being hung out to dry by his employer for giving a controversial presentation last week, didn’t say.
He didn’t – despite what you might have assumed from the subsequent furor – deny the possibility of man-made climate change. In fact, in his brief talk at a Financial Times event, he specifically said: “I don’t doubt the science at all.” [bold, links added]
He also accepted that climate change posed an ecological risk; he mentioned, for example, that the number of forest fires in California is likely to increase and sea levels will rise.
And he forecast that the activities of industrial and fossil fuel companies will be curtailed.
Kirk’s apparent heresy was daring to suggest the financial risks posed by those trends might have been overstated. He ventured that central bankers and policymakers are attempting to “out-hyperbole the next guy”.
He argued the constant prophecies that humanity is doomed are getting out of hand. And he had the temerity to mention that human beings are really rather good at solving problems and managing change.
More specifically, Kirk said he thought organizations are getting gummed up with the sheer volume of reporting on climate risk.
He expressed the opinion that some of the money being spent on financing climate change mitigation could usefully fund ways of adapting to higher temperatures.
And he pointed out that the world needs enough bandwidth to deal with plenty more imminent issues – such as the cost of living crisis, interest rate hikes, and a looming housing crisis.
His charge that central banks have been so focused on climate change that they’ve taken their eyes off the ball with regard to inflation and economic growth feels particularly close to the mark.
One would hope that policymakers can pat their heads and rub their tummies at the same time. But – on current evidence – perhaps not.
However, even if you disagree with these points it’s hard to argue that they are not legitimate grounds for debate and even harder to claim with a straight face that they are so outlandishly beyond the pale that they should be immediately dismissed from consideration.
Yet, that’s where we appear to be.
Sure, there was cockiness in Kirk’s delivery. One passage – where he asked: “Who cares if Miami is six meters underwater in 100 years?” – was particularly ill-judged.
The point he was groping for is that human beings are pretty ingenious and have, for example, figured out how to cope with the fact that much of the Netherlands is below sea level.
But the answer to his rhetorical question is: plenty of people. If Miami is six meters underwater many other coastal areas will be too.
While the developed world might – might – have the financial wherewithal and technological know-how to deal with such an extreme situation, poorer populations will be devastated. …
Some of Kirk’s comments were flippant at best and he seems to have fallen into the trap of fighting hyperbole with hyperbole.
But does he deserve to be denounced by HSBC’s chief executive Noel Quinn, who has said he doesn’t agree – at all – with the comments, or suspended pending an internal investigation?
There’s more than a slight whiff of self-serving hypocrisy in HSBC’s swift disavowal of its own employee. Anyone who knows anything about how banks operate can be in little doubt that Kirk’s presentation passed through an army of compliance officers.
Indeed, the FT has reported that its theme and content had been agreed upon internally.
This strongly suggests HSBC is far more concerned with the fallout from the presentation than its arguments.
It would be hard for the bank to refute Kirk’s claim that financial models have too short a time horizon to factor in climate change given it has only just agreed to phase out the financing of coal projects – the filthiest of fossil fuels – by, wait for it, 2040.
HSBC’s behavior smacks of censorship – not a good look for a bank that has recently been asked by US politicians to explain its actions in freezing accounts of Hong Kong pro-democracy activists. But it highlights a broader problem.
The former head of an investment firm recently told me that he had serious concerns about whether applying non-financial environmental, social, and governance factors to identify material risks and growth opportunities would either provide superior returns or help drive positive change.
He admitted that he could never air those concerns publicly as his board would have eaten him alive. That’s because ESG has become one of the most powerful marketing tools the financial industry has ever stumbled upon.
Money held in sustainable mutual funds and ESG-focused exchange-traded funds around the world increased by over 50pc last year to $2.7 trillion, according to Morningstar. There are armies of index providers, advisers, and consultants charging fees off the back of these assets.
So this is not just about one guy’s job or one bank’s hypocrisy. We know free markets are inefficient because they keep getting things wrong. But they are still, in the words of the author and advertising executive Rory Sutherland, “the greatest problem-solving mechanism ever devised”.
Indeed, to function properly, they must be allowed to go wrong. The route from defining a problem to finding a workable solution rarely plots a straight line.
Capitalism’s greatest achievements tend not to be pre-planned and are only ever obvious in retrospect. They are usually arrived at via myriad dead ends, trial-and-error, unconventional thinking, and a not-insignificant amount of luck.
And yet ESG often gets dangerously close to professing a single true path. Nothing could more clearly demonstrate the intellectual deficiencies and slender foundations of this orthodoxy than its inability to brook challenge or debate.
More importantly, it’s hard to think of a more certain route to failure than a one-eyed, monomaniacal focus on an unvarying set of preconceived values that scares everyone into conformity or silence.
Read more at Daily Telegraph
When compared to water in the atmosphere, as vapour or clouds, CO2 is a minor Greenhouse gas, overall, resulting in ~5-10% of the warming capability of Greenhouse Effect. The warming effectiveness of CO2 has diminished as its concentration has increased. At its current level of ~410parts / million in the atmosphere the warming effectiveness of CO2’s is virtually saturated.
The IPCC accepted physics indicates that any extra atmospheric CO2 now only can only have a very minor temperature effect, adding perhaps a further ~1% of warming for future doubling of CO2 concentration.
The primary policy in the West to combat “Climate Change / Global Warming” has been to install, heavily subsidise and give massive preferential legal support to Weather-Dependent “Renewable” Wind and Solar power for electricity generation, in the expectation that these technologies would reduce National emissions of Man-made CO2.
The Productivity of Weather-dependent power generation is important when comparing the cost of providing the same level of power to supply the Grid, with conventional generation technologies.
In the last ten years since 2011 Weather-Dependent generation has grown from 145GW to 385GW. The recorded productivity has been fairly consistent since 2011 and on average has achieved:
• Onshore wind power 22.5%
• Offshore wind power 32.7%
• Solar PV on grid 11.6%
• Weather-Dependent generation 18.7%
• conventional generation 90%
Very little further performance improvement can be expected from these mature and physically limited technologies.
When these productivity values are combined with the capital and long-term costs as assessed by the US EIA in 2022, their comparison results are:
• Onshore Wind power is ~8-9 times the cost of Gas-firing
• Offshore Wind power is ~16-25 times the cost of Gas-firing.
• Solar power is about ~10-12 times the cost of Gas-firing
Would anyone sane ever buy a car costing between 8 – 25 times the normal price that only works one day in five, when you never know which day that might be ? And then insist that its technology is used to power the whole economy.
The resulting excess costs over the use of Gas-firing for power generation and thus the direct fiscal damage that has been caused across Europe by mandating Weather-Dependent “Renewables” to date can be assessed at:
• in capital costs ~630 € billion
• in long-term costs over a 40-year service life ~2040 € billion.
Never forget not having to spend more money on this minor problem is the best news ever for the World and maintaining civilisation in the Western world.
Economist Julian L. Simon has identified the mechanisms for progress in his great book The Ultimate Resource 2.
He took money off the arch doomsters Ehrlich & Holdren in a bet.
The ultimate resource? Human ingenuity.
Or you could read Robert Zubrin’s shorter book, Merchants Of Despair, exposing the stupid Malthusian, proven wrong for over 200 years now, & racist Darwinian & Nazi roots of our beloved “green” doomster movement.
Nothing is ever enough. Even if you agree with everything the Climate Alarmist are saying, you can get skewered for not toeing the line good enough.
You can never satisfy the Climate Warming Progressives.
The Eco-Freaks need to be stranded in the middle of nowhere and without their cellphones