Guest essay by Eric Worrall
The Economist has slammed the European Union for not going far enough with its green initiatives.
The EU’s green rules will do too little to tackle climate change
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To the rescue has come the European Union, which has devised a new labelling system, or taxonomy, that sorts the economy into activities it deems environmentally sustainable, from the installation of heat pumps to the anaerobic digestion of sewage sludge. The idea is that funds and firms will use this to disclose what share of their activities qualify as green, and that clarity will help unleash a flood of capit al from markets. The proposals have been in the works for years, and on December 31st the European Commission circulated its latest thinking.
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The plan’s flaws lie in its bureaucratic outlook. The simplistic nature of the labelling may lead to a purity test in which funds exclude assets that are dirty. In fact a key job of capital markets is to own polluting companies and manage down their emissions. The classification is static, whereas changes in technology will cut the carbon-intensity of some activities and lead to inventions the classifiers have not envisioned. It fits a pattern of European climate-finance ideas that are well-meaning but marginal, including using the European Central Bank to buy green bonds (which could overstep its mandate), and imposing green “stress tests” on banks, even though the lifespan of their assets is shorter than the horizon for the most deva stating climate change.
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The EU’s broader aim should be to use carbon pricing to alter how capital is allocated. Relying on investors to save the planet using a taxonomy has obvious limits. Less than a third of global emissions stem from firms that are publicly listed and controlled by institutional investors. And investors do not have a clear incentive to be green. If you don’t mind the stigma, owning polluting assets can be profitable, which is why they are increasingly held privately.
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Read more: https://www.economist.com/leaders/2022/01/08/the-eus-green-rules-will-do-too-little-to-tackle-climate-change
The EU already has a record high carbon price of around €70 (USD $80) / ton. Clearly The Economist thinks more pain is required.
Eco-Warriors manage to outdo Sado-Masochists in the infliction of pain on the population.
Well how are they going to continue jetting off to COPs if the plebs aren’t forced to pay the price?
The Economist and in general most on-target economists are just clueless. Just consider lordly Nick Stern and his 2006 report, the most damaging nonsense ever to have misinformed Parliament. That gentleman came to the Blair government proclaiming that Antarctica would melt by the year 2100 if we didn’t repent and was given de-facto control over energy policy of which we now reap the sour grapes.
economics- “the dismal profession”- not sure where and when that phrase got started but it seems right on- like the other social “sciences”- sociology, psychology, political “science”- all adding little to our civilization
From wikipedia: “”The dismal science” is a derogatory alternative name for economics coined by the Scottish historian Thomas Carlyle in the 19th century (originally in the context of his argument to reintroduce slavery in the West Indies). The term drew a contrast with the then-familiar use of the phrase “gay science” to refer to song and verse writing. The latter phrase later appeared as the title of a book by Friedrich Nietzsche, The Gay Science.”
Economists aren’t good at engineering development issues. To reduce risk of error, they use statistical analysis on what they believe are “similar” situations. So they end up with the budget cost of going to the Moon being an extrapolation of the cost of an airplane ticket from New York to London. This is where they are with the cost of “net zero”.
What happens when you put 10 economists in a room? You’ll get 11 opinions.
I don’t remember if it was Eisenhower or Johnson who asked for a one armed economist.
So he couldn’t say “on the other hand”.
My favorite numbers joke
Ask a mathematician, an economist and a statistician what is 2+2
Mathematician answers 4
Economist says it’s somewhere between 3 and 5
Statistician says, what do you want it to be
Boom
Remember 2 + 2 = 5 if you permit rounding to the nearest whole number.
Just do a web search for economists wrong. LOL
Parasites, all of them – a plague on all their houses.
Now SIR Blair, Lord Stern, Prince Wingnut, and a fat overweight PM.
Another example that education doesn’t make you smart
Yes, “smart” does not equal “sensible”.
Very few people understand the difference between knowledge and wisdom.
We’re beginning to see a theoretical framework that describes the problem and how it came about.
Nassim Nicholas Taleb cuttingly describes the Intellectual Yet Idiot (IYI) in great detail.
Iain McGilchrist describes what’s going on with the IYI’s brain. link
Louis A. Sass points out that the thinking processes of the IYI mimic schizophrenia. link
Jordan Peterson demonstrates the art of using broad and deep knowledge to shut down the IYI’s rather shallow and intellectually non-rigorous ‘thinking’. Cathy Newman interview
A very entertaining opinion columnist (now dead) George Jonas, wrote about this many times and had a priceless phrase
“Educated beyond their intellectual means”.
I think he was referring to Trudeau at the time but it could apply equally to many
It’s come to the attention of The Economist that some Europeans are still managing to pay for carboniferous gas and power and this must stop before the climate kills everybody.
Serbian government is about to stop the RioTinto’s $2 billion (equal to 4% of the country’s GDP) lithium mining enterprise in the Jadar valley, an area of outstanding natural beauty after environmentalists managed to mobilise national opinion. Local media refers to it as the Ecological uprising.
Considering obvious financial loss to the country not only from this but other possible future investments from large multinational corporations, eco-warriors managed to ‘electrify’ impressive massive protests in the capital
Well, “electrified” mobs are agitating against modern industrial products in their lives and forgoing inexpensive, reliable electricity to provide for their multitude of needs.
Me: Will there be trouble?
Croatian buddy: Are there Serbians?
Croatia is more than willing to participate in building one more nuclear power plant just across the border in Slovenia but firmly declares: “Croatia will not build nuclear power plants on its territory due to the importance of tourism for our GDP.”
This is Balkans commie.
We would like electric cars, but you can’t mine lithium around here.
We are happy to help you build a nuclear power station to supply us with electricity, but we will have not one on our territory.
Is it ironic that people at the protest were recoding it all on mobile phones with lithium batteries?
So sad to see the once great financial news magazine go down in a blaze of global warming alarmism.
Always was pinko. Now full on watermelon.
was it always pinko? I seem to recall reading it 30-40 years ago and it seemed conservative at that time
It used to be very good, when I started reading it in the 90’s, it really did understand economics and markets
But it flushed all that when it clambered on the climate nonsense
I have a multi year subscription that ends in March and I’m waiting for the blizzard of renewal emails at which point I’m going to blast them
I’ve looked at their YouTube channel- it’s not much different than that of the BBC.
I cancelled around the turn of the century – it had already become too politically correct (and economically correct) by then.
The verbosity was painful – four pages for what could have been stated in a number of bullet points, without the repetition.
I got the distinct feeling they were told to believe Tony Blair was the new Messiah, or something…
What pulled me in were the Christmas double issues, with a series of essays on many quirky subjects
I remember 4 page article on barbed wire that was completely fascinating.
Those double issues are still good, but also infested with climate Scientology
Sadly the once great Moscow Times has also started on the same bandwagon!
Almost everywhere you go now, the human megadeath climate change w..nkers have taken over.
But then there is this little problem:
https://www.cfact.org/2022/01/07/energy-anguish-hits-britain/
Energy anguish with months of winter to go, all thru the EU. Climate alarmism is going to take a hit.
they should hurry up and buy more truly “green energy” wood chips/pellets from America!
If trees are GREEN aren’t fossilized trees GREEN too?…
I love fossil fuels. The logging industry uses a great deal- mostly diesel for their huge logging machines, trucks and in sawmills. I love my new oil home furnace. I love driving my Toyota Tacoma pickup and feeding it gas. For some crazy reason, some people think wood chips/pellets is just another idiot green industry like wind and solar. It’s not. And, if it’s getting warmer- for whatever reason- I love it, here in frigid New England. I hope it gets as warm as Italy where my grandparents came from. I have several fig trees, in my house, which I put out in the garden in summer- one of my grandfathers brought to America when he came here in 1912. If it gets warm enough to plant it permanently in my garden, I’d very very happy! So the answer to your question is YES.
I went and read the entire article. Not a single calculation on how this won’t cause an economic collapse, or at least, huge problems – totally glossed over
This is a recipe for economic disaster.
It’s a big problem when politicians get involved in markets. Their goals are not about economics.
They are probably hoping for an economic collapse. That would result in even less CO2 being emitted.
And lots more lovely control and power over us plebs.
They are probably hoping for an economic collapse.
It certainly appears that’s the desired end goal. For a lot of “they”s.
The City of London’s flagship tabloid seems not to have gotten the Brexit Memo.
Yet, as we see Brexit actually changed nothing – more green fumes everywhere.
Methinks, with the COP26 fiasco, Sharma whimpering he could not deliver what Marc Carney ruthlessly, relentlessly focused on : $100 TRILLION, London has a major problem.
Interesting that London demands it’s subsidiary, the EU, to pony up.
Everyone wants free money. London will just have to do what everyone else is doing and create it through debt. There are no problems with debt 😉
What was that song “and the chicks are free?”
It looks as if the financiers are salivating at the thought of $100 Tn.
Just think what their 3% “fees” would make them for handling the money.
Although IIRC in the past some brokers made 15% commission on trading carbon credits for a government department.
Ah the economist, written by journalists with only a passing familiarity with the real world.
Don’t feed the crocodiles then expect them not to eat you.
The EU’s broader aim should be to use carbon pricing to alter how capital is allocated.
Politics = who gets what, every time.
Two quick pull quotes to tell the story:
“In fact a key job of capital markets is to own polluting companies and manage down their emissions.”
And:
“The EU’s broader aim should be to use carbon pricing to alter how capital is allocated.”
Everything wrong with communism in general and with the EU in particular in one quick shot.
Just think, for decades and decades we believed that capital markets and capital allocation was directed by the prospect of profits. Enhanced efficiency of operations were often a frequent and welcome result. Now we find out that capital markets are really to serve a quite different purpose. And the markets will need to be coerced to serve those purposes. No doubt the ignorant Luddites engaging in these markets just need to be educated and nudged onto the golden path to utopia.
More like Totalitarian Fascism control of industry rather than direct governmental ownership of assets. As a totalitarian politician or Deep State denizen, why confine oneself to Socialist Totalitarian systems? [I knew that if I simply waited I’d have a chance to logically get this in somewhere down in the Thread.]
Maybe it’s a misprint for “Trougher Carbon Pricing”.
We could all sit around whittling totems to the climate gods in our mud huts tomorrow, but it wouldn’t change a god dam thing… because…
China
And you will be well paid by the government for whittling those totems…with money the gov’t borrows from banks who have a government guarantee on the value of your totems.
Anyway, rational assessments of future economy, technology and energy systems indicate that it will be virtually impossible to get to atmospheric concentrations of CO2 anywhere close to 1,000 ppm. Even the UN IPCC CliSciFi practitioners deny the possibility of the RCP8.5 scenario.
“…but it wouldn’t change a god dam thing… because…China … and a changing climate that doesn’t give a rats butt about CO2 levels… mostly.
Fine, start by slapping huge tax increases on everyone who does or has worked for the Economist. Once they are all bankrupt, destitute and homeless climate’s problems will all be solved.
“The EU’s broader aim should be to use carbon pricing to alter how capital is allocated.”
Central planning by political elites. Works like a charm every time.
See the former Soviet Union and Venezuela.
Stories like this remind me of the movie Catch 22 about a medium bomber group based in Italy during WWII. Toward the latter half of the movie, a character named Milo Minderbinder who was investing money for the airmen of the bomber group, Saw the investments in Egyptian cotton go sour so he worked a deal with the Germans. The US bomber group would bomb their own base in exchange for gold payments from the German enemy. I think of that often with when I see the consequences of green investment schemes and look at the people pushing them.
The book “Catch 22,” while being the funniest book I’ve ever read, is an accurate depiction of irrational governmental and bureaucratic decision-making and practical peoples’ behavioral response that just seem insane. I experienced them both in Vietnam, even participating. I experienced milder forms of both in subsequent government employment.
And Major Major could never be promoted, because he was “the only one we had.” I liked the book a lot when I first read it in high school.
The story ought to be, if they really believe it, that China and India should embrace tougher carbon pricing. Which of course they have no intention of doing.
There is this endless pretence that gestures of this sort will affect global emissions because in this case reducing Euro emissions must have a huge effect, mustn’t they? Wrong, they are a small fraction of the alleged problem, and they are falling anyway.
The EU is a passenger. The people driving this are in Asia. And they are not buying it.
Apparently, no one has explained that heat pumps actually use electricity and not hocus pocus like “back” radiation.
And that putting 70% of that NG heat energy directly into your home is more efficient than throwing away 70% of it turning it into electricity.
Go for it, so we can watch the fallout.
The U.S. needs EU and UK crash test dummies.
The Economist was always infected with opinion. There is no change with this.
Opinions are like assholes; everyone has one.
There is also a sliding scale that ranges between opinion and real work, in this case real research and reporting. The Economist was too bothered by opinion to invest in the other end of the spectrum and earn some respect, so it went with headline writing and a few shallow attempts to support its pointed opinion focus.
They used to have valid opinions about economics and controlling the moneys supply, then along came Carney and they just bought into the climate death spiral instead of looking out the window and going for a swim in the Serpentine on a January morning.
(puts your ideas back into place after whining about London becoming too hot!)
The Economist is fighting for the highest Darwin award together with the Grauniad, and the BBC.
I used to buy it at newsagents around Europe and listen to the BBC Ws at night.
Now I no longer buy the E-con-0-mist (mist in German being the perfect term for it!). and no longer listen to BBC whirly-matic service (full of climate crap).
The only BBC service these days that tells the truth as it is, is at half past midnight preceded by the tuneful “sailing by”.
I guess if they got that wrong, there would be mass funerals of sailors..
Why must everyone always fight climate change with money?
The best thing to do is for concerned people to commit suicide. It ends the worrying immediately and makes the future more sustainable for children through increased food supply and inheritance.
They are doing the next best thing, they’re not having children.
Actually, cetis parabis, a direct approach such as a tax on CO2 outputs, should have more of an effect, and be less inflexible, than the indirect “greenness quotient” labels which appear to be aimed at influencing stakeholder behaviour.
The latter seems to be related to the “divestment” calls, which appear to have the effect of opening up opportunities for “bargain hunting” of underpriced assets.
I subscribe The Economist, and in general it is an excellent magazine. On the subject of climate, however, it is just as clueless as most of the press.
It’s amazing to watch a publication denounce their title.