Claim: Paying CEOs to do their job accelerates climate change

climate-cash

Guest essay by Eric Worrall

The Institute for Policy Studies, a prominent Washington based think tank, has released a report which claims corporate pay structures which incentivise Chief Executive Officers to maximise shareholder value are accelerating climate change.

According to the report;

MONEY BURN HOW CEO PAY IS ACCELERATING CLIMATE CHANGE

Our contemporary executive pay incentives, analysts believe, directly encouraged the reckless behavior of Wall Street executives that led to the 2008 financial crisis. These same misplaced incentives are today encouraging the recklessness of fossil fuel executives — and deepening our global climate crisis.

The world’s largest fossil fuel companies are currently holding vast stocks of carbon reserves. These reserves, if all burned, would emit approximately 2,795 gigatons of carbon dioxide, five times the amount of carbon that researchers tell us would push the globe into catastrophic climate change, everything from extreme flooding and drought to a significant rise in sea level. Yet the fossil fuel industry, fixated on the extreme short term by perverse CEO pay incentives, is now spending over $600 billion a year to locate additional carbon reserves.

Today’s executive pay packages, these pages will show, give the leaders of America’s oil, gas, and coal giants an enormous personal financial incentive to spend billions per year developing new fossil fuel reserves that cannot be exploited without destabilizing the climate. These fossil fuel executives spend billions more on new infrastructure — pipelines, power plants, drilling platforms, and more — that lock us into fossil fuels at a time when our nation should be investing in conservation and renewable energy options.

Read more: http://www.ips-dc.org/wp-content/uploads/2015/09/EE2015-Money-To-Burn-Upd.pdf

The report quickly moves on to discussing what should be done with all that executive pay. Their top suggestion is to give the money to green groups.

What else could $6 billion pay for?

To put these fossil fuel executive compensation figures in perspective, we can compare them to several urgent climate-related challenges and opportunities at the U.S. and global levels.

Green Climate Fund

At the global level, $6 billion could double the U.S. governments’ $3 billion pledge to the Green Climate Fund, the new institution tasked with helping the world’s most vulnerable countries mitigate and adapt to climate change. …

Of course, it wouldn’t be possible to redistribute the money to green groups, if the money was still being paid to the executives.

Abolish executive performance pay

Michael Dorff of the Southwestern Law School, author of the 2014 book Indispensable and Other Myths: The True Story of CEO Pay, is proposing the abolition of “performance pay.” Others have suggested executives should have to wait to cash in such forms of compensation for at least 10 years, even if they are fired or retire. At best, stock options and other performance-pay incentives have CEOs thinking more about their own personal rewards than long-term enterprise sustainability. At their worst, “pay for performance” deals encourage criminal behavior.

If underpaid executives don’t have any financial incentive to do a good job, there might not be that much excess money to redistribute. But maybe I’m just being pessimistic. Perhaps all those formerly well paid company executives would discover a new source of motivation, while viewing pictures of happy green activists enjoying their new financial windfall.

126 thoughts on “Claim: Paying CEOs to do their job accelerates climate change

    • Repent your fossil fuel CO2 sins and give alms to the Climateer preisthood in order to save Gaia.
      So sayeth the Church of Climate Change Prophets Profiteers.

      • Now they are approaching the real reason behind the hoax so AGW, namely the destruction of the Capitalistic system. Socialism is the preferred method of those behind the lie. Truely watermelons…..green outside, red inside.

    • Robert Chandler’s book Shadow World chronicles the creation of IPS and it is more than a Washington think tank. It aLSO has an overseas affiliate the Transnational Institute in Amsterdam. Chandler explained how Samuel Rubin, a lifelong communist and Philip Stern created IPS in 1963 and TNI in 1972. I get their Too Much newsletter and always think of the radical connections and programs Chandler laid out and where the seed money for this think tank came from.

    • Not psychotics so much as entitled children who believe that daddy’s money will never run out and whatever they believe is true. If you have been on a college campus the last couple of decades you have seen how people like this are trained to never grow up and do not possess the tools for critical thinking. They know all about critical THEORY, however..

      • Real science has been brought to a grinding halt as all these new scientist think with emotion instead of rational thought !!!!

  1. “…a report which claims corporate pay structures which incentivise Chief Executive Officers to maximize shareholder value are accelerating climate change.”
    Like every other libcult Crusade, the Klimate Kult is founded on an overarching template of exigent circumstances that (supposedly) justifies any atrocity, any lie, any deception and any needed fabrication. These fill-in-the-blank style Crusades are broadly constructed to allow the libcult minions (and those who merely wish to use them to make a personal profit) extremely wide latitude in generating the desired declarations of impending doom that, as usual, DEMAND that we override the normal rules of evidence, rationality and logic and DO SOMETHING!
    But more and more it is only within the echo chamber of Ruling Class owned and controlled Big Media (and within any areas of what we used to call “science” that fall under the tyrannical control of the libcultists) that these ideas are given any validity. The little peeps rather quickly evaluate these Crusades and their hyperventilating minions for what they are, fabricated, self-serving nonsense.

    • These self proclaimed do-gooders show a glaring ignorance of why people invest in the first place. Investment, such as buying stock in a company, is done with the promise that those in charge WILL endeavor to produce maximum profit for the shareholder. Otherwise why would one risk their money. One of the reasons socialists, communists and all other anti-capitalists do not understand this is because they are always using other people’s money and have no skin in the game themselves. Most of them couldn’t stomach the risk of their own resources. It is the same reason they do not understand insurance. Since they do not have anything to lose with OPM, they don’t feel the need for insurance and falsely assume no one else needs it either.

    • It seems to me this terrible article is saying. “Hey, you make a lot of money. Give it to us or we will punish you”. Of course, if you do give it to them they will still punish you. The Gulag, concentration camps, re-education centers, insane asylums. and on and on as only their depraved and twisted minds can devise. The leftists are nasty.

  2. Open economic markets and freedom makes climate change worse! And no, we’re not really Communists reincarnated… honest!

    • How about the CEOs take the $6B and use it to buy wind turbines?
      They could just accept the subsidies as their pay.
      Then they could turn that $6B into $10B real quick like Al Gore does.

  3. Green Climate Fund
    At the global level, $6 billion could double the U.S. governments’ $3 billion pledge to the Green Climate Fund, the new institution tasked with helping the world’s most vulnerable countries mitigate and adapt to climate change. …

    While the Institute for Policy Studies is also aware of the following.

    …..It is often difficult to see the wood for the trees within the thicket of paperwork that surrounds GCF Board meetings. But any mention of phasing out fossil fuels through a transition to renewable energy is conspicuous by its absence. Unless there’s a rapid about-turn the GCF could, perversely, become a major source of funding for fossil fuel infrastructure, even as other international financial institutions are belatedly moving to phase out some of the coal-fired excesses of their energy portfolios……
    The prospects that the GCF will exclude dirty energy projects look slim, given that its Board contains several members keen to promote fossil fuels (and their proxies like “carbon capture and storage”), while large transnational corporations, including Bank of America (dubbed “the coal bank” by activists), play a significant role in shaping the Fund. But resistance to this corporate capture is growing……
    http://www.ips-dc.org/7_things_to_look_out_for_in_the_uns_green_climate_fund/

  4. ” Michael Dorff of the Southwestern Law School, author of the 2014 book Indispensable and Other Myths: The True Story of CEO Pay, is proposing the abolition of “performance pay.” ”
    What kind of ROE might be expected from this fine institution? I took a quick look in Wikipedia
    The total cost of attendance (indicating the cost of tuition, fees, and living expenses) at Southwestern for the 2013-2014 academic year is $75,559.[15] The Law School Transparency estimated debt-financed cost of attendance for three years is $293,914.[16]
    According to the law professor blog, The Faculty Lounge, based on 2012 ABA data, only 44.1% of graduates obtained full-time, long-term, positions requiring bar admission (i.e., jobs as lawyers), nine months after graduation, ranking 154th out of 197 law schools.
    So a law school, located in the richest state in the richest nation in the world, but ranked just barely above the lowest quartile for its ability to place graduates into the legal profession, gives us a professor who thinks he knows how to run a business.
    Dorff adds fuel to the old adage: Those who can, do. Those who can’t teach.

  5. I thought the 2008 financial crisis was caused by the fed’s easy money policy and the sub-prime mortgage industry and other questionable lending practices. But I guess global warming can cause and/or be caused by anything so, heck, why not blame CEOs.

    • Yes it was Barney Frank of Mass and Dobbs of Connecticut who were the primary advocates of home mortgages for those who could not afford their house. The professor is re-writing history. The government forced the banks to make bad loans just as the government is now forcing industry to make bad investments in renewable power. As usual wall street jumps in and makes $$$$.
      Maybe another meltdown?

      • Yep, AIG, Freddy Mac and Fanny May.
        But mostly needed: deregulation.
        Altogether almost done it.
        Hans

    • The government provided both the carrot and the stick. Banks made loans to those who could not afford to pay them back (poor, inner city, minorities etc). The carrot was that Fannie Mae & Freddie Mac would buy the loans from the banks and remove the risk. The stick was that for any banks who did not play along, they would get heavy penalties, get bad press and probably a boycott or two from the Jessie Jacksons & Al Sharptons of the world, if they did not give “enough” loans to minorities.
      It worked brilliantly. For a while.
      Now, minority home ownership is at an all time low.
      Why is no one in jail for this crime? It was of epic proportions, affected every American, and caused enormous losses.

      • Plus I believe the lenders could charge large fees for transferring ownership of the debt, and it turned into a sort of game of musical chairs (or is that hot potato?).

      • you wouldnt be talking about this tiny GSE would you?-
        Fannie Mae
        NW in Washington, D.C
        Type -Government-sponsored enterprise and public company
        Traded as OTCQB: FNMA
        Industry Financial services
        Founded 1938
        Headquarters -Washington, D.C., U.S.
        Key people-Tim Mayopoulos, CEO
        Products -Diversified Investments
        Revenue -US$ 25.8 billion (2014)
        Net income -US$ 14.2 billion (2014)
        Total assets -US$ 3.248 trillion (2014)
        Total equity -US$ 3.7 billion (2014)
        Number of employees -7,200 (2013)
        why are they a GSE? what on earth is the Government sponsoring? if the very idea of a GSE is to target and help sectors of the economy or to ‘reduce risk to investors’, then the GFC is proof of the failure of this type of thinking. the free market sorts itself out. as soon as government fiddles too much, there is spectacular failure.

      • Yeah! And they exported their ginormous debt to the rest of the world by stapling it to debt raisings from foreign financial institutions and governments. The DemaKratz nearly destroyed the world economy for their own ideological gain.

  6. These guys have been saying for years that one of their goals was the elimination of global capitalism.
    What better way to do that they de-couple performance from pay?

    • Actually, I think it’s good to decouple short-term performance from pay for the tops of corporations. The short term thinking in business is actually causing a lot of company stability problems across the world. The balance needed between do-ers and investors has been slanted too far in the direction of short term gains by investors.

      • So where would the do-ers get the capital to do anything if it wasn’t for investors? Why would anyone invest without an expectation of a gain? How many more companies would simply fold if they could not get an infusion of funds from investors when needed? How would companies grow if not for investors? Investors often take short term gains as a a way to protect their capital account. Take your gains as soon as you can to cover your initial investment then reinvest the rest with the goal of further gains. Investors who do not protect their capital always end up broke and become socialists.

      • I guess some people think we ought to abolish private industry and let the government provide all the jobs and produce all the goods. Small problem, where does the money come from? Where does big government find the taxpayers? This kind of government has to collapse and nothing of real worth is being produced and there is no tax base to provide wealth. Big Governments forget that you can shear a sheep every year, but you can only skin him once.

      • Tom, we can agree that this scenario isn’t perfect without wanting to overthrow it. I’ve seen lots of short term thinking in the oil industry. The solution isn’t to abolish performance pay, but to include longer term variables to avoid the perverse incentive to sacrifice the future for today.
        Of course this has to be done on an individual level, not by mandate.

      • Tom in Florida,
        One major company that employed me grew from the sale of assets that we developed from unknown to profitable. Government was an enemy. They imposed capricious and near-illegal taxes at the drop of a hat. In return, my little group added several billion to the national wealth in 3 decades, with no government money, subsidies or concessions.
        We took part of that several billion each year to pay ourselves and to gradually expand to ever higher profits.
        It used to be known as “free enterprise”.
        Ayn Rand would have approved, but these days fewer and fewer even seem to know the meaning of those words.

      • Is there any evidence regarding this alleged short term thinking amongst business types? The biggest form of financial incentives have been stock options, and stock prices are affected by both long term and short term considerations on the part of investors.

  7. Let’s start with Hollywood. Making movies requires lots of energy, travel and other resources. Top actors get paid millions of dollars to pretend. Suppose we take all that money, from production costs to every dime paid to everyone who works on a movie and give it all to the greenies for the good of the planet. Once that is done and there are no more movies and TV shows, then you start on the rest of us.

    • Why not force Gates, Buffet, Kerry, Gore and Soros to pony up. Add Trump just to have a Republican in the mix. Do as I say, not what I do. We Morlocks just don’t appreciate the true greatness of our “betters”. It takes money to make (take) money.

  8. I, ________ son/daughter of ________, _______, aged ________years, arraigned personally before this tribunal, and kneeling before you, Most Eminent and Reverend Lord Climatorati, Inquisitors-General against heretical depravity throughout the entire Climatic commonwealth, having before my eyes and touching with my hands, the Holy CMIPs, swear that I have always believed, do believe, and by Government’s help will in the future believe, all that is held, preached, and taught by the Holy Climatic and Governmental Church.
    But whereas — after an injunction had been judicially intimated to me by this Holy Office, to the effect that I must altogether abandon the false opinion that the sun is the driver of the climate, and that the earth and man is not the center of the world, and moves, and that I must not hold, defend, or teach in any way whatsoever, verbally or in writing, the said false doctrine, and after it had been notified to me that the said doctrine was contrary to Holy Scripture — I wrote and printed a book/paper/blog/statement in which I discuss this new doctrine already condemned, and adduce arguments of great cogency in its favor, without presenting any solution of these, and for this reason I have been pronounced by the Holy Office to be vehemently suspected of heresy, that is to say, of having held and believed that the Sun is the driver of the climate, and that the earth and man is not the center and moves:
    Therefore, desiring to remove from the minds of your Eminences, and of all faithful Alarmists, this vehement suspicion, justly conceived against me, with sincere heart and unfeigned faith I abjure, curse, and detest the aforesaid errors and heresies, and generally every other error, heresy, and sect whatsoever contrary to the said Holy Church, and I swear that in the future I will never again say or assert, verbally or in writing, anything that might furnish occasion for a similar suspicion regarding me; but that should I know any heretic, or person suspected of heresy, I will denounce him to this Holy Office, or to the Inquisitor or Ordinary of the place where I may be. Further, I swear and promise to fulfill and observe in their integrity all penances that have been, or that shall be, imposed upon me by this Holy Office. And, in the event of my contravening, (which Government forbid) any of these my promises and oaths, I submit myself to all the pains and penalties imposed and promulgated in the sacred canons and other constitutions, general and particular, against such delinquents. So help me Government, and these Its Holy Gospels, which I touch with my hands.
    I, the said _________, have abjured, sworn, promised, and bound myself as above; and in witness of the truth thereof I have with my own hand subscribed the present document of my abjuration, and recited it word for word at ______, in the _____, this ______ day of _____, _______.
    I, _______________, have abjured as above with my own hand.

      • It is translated from the Italian, which can be wordy. Even so, it excludes two points objected to by the original abjurer, which he managed to keep out of it.

  9. “The report quickly moves on to discussing what should be done with all that executive pay. Their top suggestion is to give the money to green groups.”
    Doesn’t that make the environmentalist Cannabis Generation and their fresh faced, naive, twice miseducated followers the only customer?
    Looks like hippy sunshine’s hairline receded and reveals a nonprofit environmentalist who wants everyone else to take what they get and like it.

  10. I hate to self-censor when it’s so bleeding obvious what the censored word is, but here is my reaction to the above story, censored for the faint hearted:
    F*****g Communists.

  11. These communists fail to realize that the only reason these companies exist at all is that they are run by self interested capitalists. One can easily see that they hate profit so much they need to take the CEOs down. But then they want the streams of money that these capitalists created to flow to them. One year after disincentivising the CEO, the company would no longer have the wherewithal to keep the lights on. Who’s gonna run these companies? Pantywaist commie kids? Only in an academic bubble could this idea pass the laugh test.

    • The reason these companies succeeded was because each one had to produce a safe, effective, affordable product that people would buy voluntarily, and in the constant pressure of other smaller companies who could also make competing products. The customer is the customer.
      Giving subsidies, then passing legal mandates forcing customers to buy the products, then eliminating all genuine competition, is the green imitation, the eco version of “free market solutions.”
      Think of this form of economics as similar the nematode that takes over the snail’s brain, destroys it, and then leads the snail to a bird, which eats it, and completes the nematode’s lifecycle in the bird scat, which the snail then eats.

      • “The customer is the customer.”
        Not in the periodical publishing business. The customer is the product.

      • I’ve lost track of the number of reformers I have talked to, who are 100% convinced that upper management does absolutely nothing of value. That any random Joe could be plucked off the street, put in the CEO’s office, and the company would continue to run just as effectively.

  12. “Shame on corporate executives for making their companies profitable and effective. Shame on them for doing their jobs.” That is about the gist of it, as far as I can see, and this is from an alleged Washington “think tank.” There wasn’t much thinking going one when they issued that report.

  13. Even Naomi Klein has more clues than the folks who dreamed up this crapola.
    CEO pay is often scandalous and often bears no relationship to job performance. We have examples of CEOs getting huge bonuses while their companies went bankrupt. Corporate governance is a huge issue. Even given that, it doesn’t mean that corporations would behave differently if we incentivized their CEOs differently.
    No matter what we pay them oil men will want to drill and miners will want to dig. They spend all their time trying to persuade investors to give them money so they can drill and dig. Anyone remotely familiar with the industry will tell you that.
    How is it that Steve McIntyre had the skill to debunk Mike Mann’s fraudulent (according to Mark Steyn; buy his book folks!) hockey stick? He worked in the mineral industry and was used to the sophisticated ‘exaggerations’ of folks promoting new mining ventures.
    I would bet that the folks at the Institute for Policy Studies have zero experience with the oil and mineral industries. They probably think that properly incentivized tigers would willingly give up eating lambs and take up a vegan diet.

    • Talking about Mark Steyn (A Disgrace to the Profession):

      Amazon Best Sellers Rank: #197 in Books

      vs.
      Naomi Klein (This Changes Everything):

      Amazon Best Sellers Rank: #7,435 in Books

      Admittedly Klein has been out for a year and Steyn just came out but it’s nice to see him outselling her.

    • Commie Bob,
      I hold up my hand as one of those people that you appear to dislike.
      Can you please tell me any things I have done, or might have done, that make you so anti-mining?
      (Steve Mc is able to analyse and audit because he is naturally clever, was educated well and worked with statistics for long enough to be able to audit properly. He is a hard act to beat, but there are thousands of other people who could do what he is doing but perhaps a little less clearly than Steve.)
      In the mining business a few decades ago, we used to explore for new mines in order to sell products (less taxes and royalties) to provide us with funds to explore the next year.
      If we did not find new mines, our fate was to become unemployed or taxi drivers, in the main.

      • OMG Geoff, I am sorry if I gave the impression that I am anti-mining. Please accept my apology. My father was in the industry and I spent a lot of my early life visiting various sites with him.
        Later in his life, my dad’s job involved evaluating ‘proposals’. I remember asking him about Bre-X during the initial excitement, long before it was exposed as a fraud. He called it for what it was. He, and his cronies, had finely tuned BS filters.
        I don’t dislike the juniors. It’s a rough way to make a living. On the other hand, given that they are desperate for capital, they have been known to be ‘over-optimistic’. 🙂 The next PDAC convention starts March 6, 2016. Dad used to attend those and would always come back with interesting stories.

    • A common fallacy is that CEO pay should be based on the current performance of a company. This is the mistake that a poster made above, thinking that this was actually the case.
      In most cases, the CEOs who are making those big bucks are either CEOs who were brought in after the company got in trouble, or it was a CEO working in a company that was beset by outside forces beyond it’s control.
      If you cut your CEOs pay just because the company is going through a bad spell, then the only CEOs who stay, will be the ones who are only worth what you are paying them now. Those who are worth more will find new work elsewhere, and your company will be stuck with the second rate CEOs who are willing to accept the new lower pay rate.
      If you want the best, you have to pay for it, regardless of the shape of the company at present.

  14. It’s true there is a problem with the capitalist model right now, but it needs to be fixed, not thrown away.
    Businesses are supposed to maximise their profits and maximise their longevity. Some CEO’s are maximising their personal wealth instead, whilst risking the other aims.
    It’s easily fixable, and it has b*gger all to do with climate change

  15. “We may get to the point where the only way of saving the world will be for industrialized civilization to collapse.”
    Maurice Strong, U.N. Earth Climate Summit 1992.
    It has been a recurring theme, propounded by many, in various forms. Truly, to them, “the science” is merely a means to an end. And the ends, to them, justify the means.

    • I always thought the lefties’s mantra was: “Let no good deed go unpunished.”
      Good deeds being: paying taxes, not being a burden on society, creating prosperity, saving for your old age, believing in science versus alarmist BS, supporting traditional family values, etc., etc.

      • Reminds me of the solutions being proposed to help save Social Security.
        Those who have sacrificed to put money away to pay for their retirement, will have their SS payments cut, sometimes even eliminated, so that those who haven’t planned ahead can keep their SS payments in full.

  16. “At the global level, $6 billion could double the U.S. governments’ $3 billion pledge to the Green Climate Fund, the new institution tasked with helping the world’s most vulnerable countries mitigate and adapt to climate change. ”
    Or as the man from Potsdam put it…
    “But one must say clearly that we redistribute de facto the world’s wealth by climate policy…One has to free oneself from the illusion that international climate policy is environmental policy any more.” – Ottmar Edenhofer, Co-chair of IPCC WG III, New American, Nov. 19, 2010

  17. How many times do they need to discredit themselves before the lie completely collapses? Yes climate changes naturally, I don’t buy man made climate change.

  18. “LIBERALS” just hate capitalism and fat cats, they are so jealous, they want to reform the system and force socialism. Environmentalist and Marxists are perfect bedfellows.

    • Left wing professors in colleges throughout the country, have convinced themselves that they are the smartest and most capable people on the planet.
      They look around and see legions of “lesser” people making way more than the professor does.
      This inequity drives them to dream of ways to perfect the economic system so that they will be finally be paid what they believe themselves to be worth.

  19. Just when you think that you have seen the most insane suggestion ever possible from the Warmist/Greenists, they manage to top it all and come up with something even more insane and ridiculous…..always however to their benefit.

  20. Now, on blame for CO2.
    Take the North American continent before the three ships of Columbus.
    How many deer, antelope , moose, bison, etal , were out and about, how many wild fires on the plains, how many millions and millions of acres of forest burned in one summer at the time.
    So much flatulence, so few facts.

  21. And fair enough.
    Some of these blokes are earning nearly as much as Elon Musk (is that really and truly his name? Or is it a stage name?)

  22. Just further evidence (like we needed more) that the CAGW Hoax is ultimately about destroying capitalism; not “saving the planet”….
    The 2008 Sub-Prime Loan Collapse, was about.. well… sub-prime loans. Leftists thought it would be a brilliant idea to force banks to give poor people with awful credit ratings ARM mortgages with zero down… Leftists also thought it made sense to set interest rates at zero to allow governments to finance the $trillions of national debt they already have, and run up $trillions more.
    The Leftists’ zero-interest policies also drive good money out of low-risk investments (savings accounts/CDs) and into high-risk real estate and stock market bubbles…
    Leftists learned NOTHING from the 2008 sub-prime loan collapse. Leftists still have zero-interest policies, which is why we have even worse real estate, government bonds and stock market bubbles that have already started to implode in China and will soon collapse around the world.
    CAGW, Keynesianism and centrally controlled economies are all hypothese that have failed miserably. Until free-market capitalism, limited governments and free-floating interest rates are adopted, the world will simply move from one financial crisis to another ad infinitum.

    • Until free-market capitalism, limited governments and free-floating interest rates are adopted, the world will simply move from one financial crisis to another ad infinitum.

      You are absolutely correct. Sadly, once free-market capitalism, limited governments and free-floating interest rates are adopted, the world will continue to move from one financial crisis to another ad infinitum.

      For every complex problem there is an answer that is clear, simple, and wrong. – H. L. Mencken

      • CommieBob– Free-market capitalism is the only moral and ethical system capable of the equitable and efficient allocation of land/labor/capital as it is based on the principle of the non-initiation of force.
        Free competition allows only the best companies with the best products and services to survive.
        Statism in its various forms (Communism, Socialism, Facism, mixed economies) is entirely dependent on the initiation of force to implement their command and control objectives, which de facto makes them immoral and inefficient.
        Governments are at best “necessary evils” and must be kept as small as possible to prevent tyranny. Public spending should never exceed 10% of a country’s GDP.
        Free-floating interest rates are essential to prevent boom/bust economies as interest rates rise when demand for funds increase, and fall when demand for lendable funds is low. They act as a natural control mechanism.

      • Free competition allows only the best companies with the best products and services to survive.
        ============
        What if the product maims or kills the customers?
        Why did Merck survive and prosper after putting deadly Vioxx on the market?
        Why, on the other hand, was Harold Shipman was sentenced to prison?

      • SAMURAI says:
        September 5, 2015 at 11:04 pm

        The economy can be viewed as a feedback control system. In your model, floating interest rates act as negative feedback that will smooth out boom-bust cycles.
        The climate can also be viewed as a feedback control system. The inputs to the climate (TOA radiation, Milankovitch cycles, etc.) change slowly and yet we slam back and forth between glacials and interglacials. The fact that a system has feedback doesn’t necessarily make it stable. In fact, many systems can be made more stable by removing the feedback.
        If a system responds in a linear fashion to inputs and feedbacks, we call it a proportional system. If there are leads and lags, the system is described by the order of the differential equation that describes it. (first order, second order, third order, etc.) Second order and higher systems can become unstable and oscillate.
        In response to changing conditions, the economy will have boom-bust cycles no matter how we try to prevent them. The economy is not a first order control system and no amount of wishful thinking will make it so.

      • Khwarizmi – you’re close : “Free competition allows only the best companies with the best products and services to survive“. — What if the product maims or kills the competitors?
        I am fiercely in favour of capitalism and free enterprise, but we do need government too to set and enforce the rules. And that’s why we need democracy …

      • That there will be the occassional recession under free-market capitalism is inevitable. Nobody has perfect information.
        However it should be obvious to even a communist that govt serves only to make such crisis worse and more frequent.

      • Would you continue to shop at a company who’s products maimed and killed?
        Between the lawsuits and loss of market share, any company that did what you intimate would quickly go out of business.

      • commieBob, what is your evidence that solar output changes slowly?
        There is plenty of evidence that it can have significant changes on time frames of well under a century.

      • BTW, putting a feedback mechanism with a response time that is longer than the signal you are trying to correct for is a recipe for disaster.

    • “save the planet” How did we get to this point? The planet hasn’t missed a beat. If I thought environmentalists actually cared about the environment or people I would still be one.

    • CommieBob– Regarding interest rates and the economy in general, it’s far too complex for government hacks and “experts” to try and inflict their will upon it to accomplish some contrived agenda..
      There are natural market costs for all things at any given time based on the collective force of 7 billion people making 100’s of decisions everyday and countless other variable impossible to predict nor determine what their net effect may or may not be.
      Invariably, any economic control or coercion political hacks inflict on the market will have the complete opposite effect of their intensions, which then requires addition coercive measures to “fix” the problems previously created; the immutable law of Leftist Irony….
      The same hubris that makes politicians think their policies can save the planet, also deludes them to think they can effectively control economies.
      Governments just need to leave the economy alone and let it work its magic, i.e. Laissez- faire economics..

      • We’ve had a couple of hundred years experience with various experiments in laissez-faire economics. It has never been the panacea that you seem to think it is. wiki You previously stated that floating interest rates are a cure for boom-bust cycles. There is no evidence for that at all.
        If there is one field as seriously polluted with religious fervor as climate science, it is economics. All your observations are, to a greater or lesser extent, accurate. I have no argument with them. What I do object to is your faith that some particular approach will solve all our problems. That’s not going to happen; it never has done so in the whole recorded history of the human race.

        “Most of the greatest evils that man has inflicted upon man have come through people feeling quite certain about something which, in fact, was false.”
        – Bertrand Russell, Unpopular Essays

      • SAMURAI,
        I agree with you that 7 billion individuals, each making hundreds of thousands (not just hundreds) of discrete decisions every day are much greater processing power than any group of government bureaucrats, no matter how many there are.
        Large groups of people making lots of rational decisions in their own self-interest are on the order of a quantum computer. That level of efficiency leaves a relatively limited group of bureaucrats in the dust; no group in government can possibly arrive at the best solution to a problem by comparison.
        The proof is everywhere we look: the growth of government control is inversely proportional to its efficiency and the well-being of its populace. Look at North Korea vs South Korea, for just one of many examples.
        So now we have a small group of self-selected of young’uns with a ‘progressive’ agenda:
        http://www.ips-dc.org/wp-content/uploads/2013/08/retreat_2014-815×480.jpg
        Obviously, they don’t live in the real world.
        This so-called ‘policy’ group is about as radical and far Left as anyone in Washington, DC. And that’s saying a lot. They are such economic illiterates, and so ignorant of basic human nature, that if they ever read Bastiat with an open mind their heads would collectively explode.
        ************************************
        Here’s a fun story I’d like to share: Sundays are our day to go to our local Farmer’s Market. Lately there have been lots of Greenpeace volunteers there — young women handing out literature and requesting cash donations.
        I usually ignore them, but today when one pretty young thing tried to engage me in a discussion of “global warming”, I resisted my usual response: asking if she knew how much CO2 is in the air? Instead, I interrupted her and asked if she could make a “donation”. She asked, “A donation?” I didn’t say for what, I just said “Yes,” and repeated that I would like a donation. She asked me, “How much do you need?” I said, “Five bucks.”
        To my astonishment, she pulled out a wad of one-dollar bills, counted out 5 of them, and handed them to me. She started to ask about the “donation” again, but I just said, “Thank you!” and walked away.
        My wife and I have been laughing about it all day. It’s probably the first and last time that Greenpeace has ever donated to me!
        I sort of feel sorry for those kids. They get no pay, they just stand in the sun all day collecting cash — money which they then pass on to Greenpeace. It’s the same tactic Ralph Nader used to funnel more than a hundred million to his (unaudited) organization in the 1980’s and ’90’s. (I can’t feel angry at Ralph, though. His 100,000+ votes in Florida were a big reason that Algore lost by only about 500 votes there ☺).
        Today, Greenpeace donated to me! My life is full. I’m a happy camper.

      • We have never had even close to Laissez-faire economics in this country or any other.
        The fact that you believe that to be the case just demonstrates how little you know regarding economics.

      • dbStealy: Pat Buchanon got almost as many votes as did Nader in FL 2000, I doubt many of his voters had Gore as their second choice.
        Regardless, decisions are usually best made by those who are closest to where the information is being gathered.
        The problems with bureaucracy are two fold. First off the gathered information has to be passed through numerous layers before it can finally make it to a decision maker. This delay means that the situation on the ground has changed by the time any decision can be made. As a result, the decision that is finally made is at best, less optimal and at worst, completely wrong. (There’s an old joke from back in the ’80s was that the best lagging indicator of an economic recovery was the fact that congress was debating a jobs bill.)
        The other problem with bureaucracy is that since high level decision makers can’t deal with information regarding millions of individual markets, that information has to be homogenized into larger units. This means that the decision makers are making one size fits all decisions. A decision that is good for one area might end up being disasterous for another. Putting the decisions closer to the source allows decisions to be tailored to be best for smaller groups.

  23. Do they explain what “accelerating climate change” means? Are major US landfalling hurricane numbers dropping more rapidly? Presumably any change is bad and caused by humans?

  24. Well, they’re consistent. If they think it’s bad, it’s from global warming—sorry, ‘climate change’.

  25. It’s time for all those who believe in catastrophic climate change that can be stopped by a change in behaviors to lead by example. How about they stop driving, stop flying, stop using any products that require to be mined and transported, and disconnect from the grid? Wouldn’t the world be a better and quieter place?

  26. Those who do not learn from history are doomed to repeat it

    The economic cycles of boom and bust predate the history of performance pay by centuries and can be tracked back to before the “Tulip Mania.” All the so-called “performance pay” has done is give CEO’s and other executives greater opportunity to pillage and plunder their paymasters, which, of course, because they are such ethical and conscientious individuals they could not possibly do.
    (/sarc)

  27. “If underpaid executives don’t have any financial incentive to do a good job, there might not be that much excess money to redistribute.”
    1. Ban / confiscate all performance-related pay.
    2. Watch CEOs et al get massive salary increases unrelated to performance.
    3. ???
    4. Profi- no wait, never mind.

  28. Do the members of this “think tank” realize that without customers ready to buy the product the

    perverse CEO pay incentives

    wouldn’t mean anything?
    It is not like the evil fossil fuel companies are recovering the fossil fuels and just burning them in open pits. People are buying the fossil fuels to provide them the power they need/want to live their lives. And in general those people will chose the cheapest means to provide that power.

  29. Remember “management by objectives” (MBO)? Great idea, but…everyone quickly relearned the old caution to “be careful what you wish for”. If you don’t think out, set and state your objectives very carefully you won’t get what you had in mind, or expected, which also hammered home the “law of unintended consequences”.
    People will respond to their incentive sets, but of course we never know, cannot know their entire incentive arrays — their individual, personal, private knowledge, ignorances, things each “knows” which are not so, etc. This is exactly why open, honest markets with discouragement against initiation of force and fraud are so very important.

  30. The watermelons are showing their true nature. There are only two types of greens: 1) those who use climate change as cover to implement their true agenda, and 2) useful idiots

    • Wow! We’re not talking shoestring budgets, db. Thanks for the link.
      I suppose there are a few websites out there run by lone nutters that advocate the same things. Lone nutters have much lower overhead but generally don’t get much traction with the public. So it’s the ol’ appeal to authority thing. If a bunch of people with strings of letters after their names at some fancy sounding institute advocate some position, then it must be a good idea, right? Well, that’s the way their financial backers see it, I suppose.

  31. Kozlowski,
    ‘affected every American’
    – affected global economy!
    starting 2008. 2015 not yet resolved.
    The world’s leaders retracted to more profound instances:
    called ‘climate change’.
    Regards – Hans

  32. Lol. For as long as I can remember – and I’m thinking back to at least 1980 and before – IPS has been known around DC as a quasi-socialist, somewhat fifth-column and subversive leftist front organization. It’s the grandaddy of the many, many quasi-legitimate leftist thinktanks in DC today.

  33. In 1993, Bill Clinton and the Congress pass a special “millionaires tax” directed at top company management (but there was a special exception for Hollywood and sports stars).
    Companies responded by capping the salaries of management at $1 million, but proceeded to make up the “difference” with stock options. What resulted was described by PBS’s FrontLine as the “biggest transfer of wealth in the history of the world” as roughly 10% of company equity passed from the stockholders (which include pension, retirement and mutual funds held by 90% of all Americans) to the top levels of management in the Fortune 500 companies.
    This isn’t what Bill Clinton and the Congress had intended, but it is what happened. They had unwittingly enabled those at the top to become richer.

  34. I can tell right away that CEO’s don’t contribute to climate change, they don’t even contribute to shareholder value. From the first paragraph “Chief Executive Officers to maximise shareholder value ” , no they don’t, CEO’s first and foremost contribute to CEO bonus’s and CEO’s value. The shareholder is looked at as a patsy, I have first person experience with what CEO’s think.

    • CEO’s maximize CEO wealth by maximizing shareholder wealth.
      You claim to have known one CEO and from this believe that you know all about all CEOs?

  35. “Yet the fossil fuel industry, fixated on the extreme short term by perverse CEO pay incentives, is now spending over $600 billion a year to locate additional carbon reserves.”
    Ignorance and irrationality displayed by internal inconsistency….and within a single sentence! 😱
    Short term thinkers would put the $600 billion in their pocket and call it a day.

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