Sternberg on Risk to Financial Institutions from Climate Change

Opinion by Kip Hansen — 30 September 2022

Joseph C. Sternberg is a member of the Wall Street Journal’s editorial board and is the Political Economics columnist.  He begins a recent column in the WSJ with this statement:

He has not been fooled by the nonsense that has nearly unseated World Bank President David Malpass.   Climate Policies being enacted in the UK and across Europe are the “’climate risk’ to financial stability”.  That risk “has arrived, although in exactly the opposite manner to what our current crop of eco-financiers predicted.”

“The U.K. may be facing a wave of business bankruptcies exceeding anything witnessed during the post-2008 panic and recession. Some 100,000 firms could be forced into insolvency in coming months, bankruptcy consultancy Red Flag Alert warned this week. These are otherwise healthy firms with at least £1 million in annual revenue. Business failures on this scale would dwarf the roughly 65,000 firms of any size that went under from 2008-10.

The culprit is energy prices, which the consultancy believes could account directly for around one-quarter of the possible insolvencies. These prices are rising for British businesses in intervals of several hundred percent at a time and sometimes with steep deposit requirements from utilities that fear precisely a wave of bankruptcies.”

Sternberg says that “matters are probably worse in Germany, the eurozone’s largest economy” where up to 73% of small and medium-sized enterprises report that they are feeling “heavy pressure from energy prices”.  Some estimate that up to 10% may be facing “existential threats” – not from Climate Change mind you, but from Climate Change Policy.

Sternberg ends his piece with this:

“Politicians are happy to blame Vladimir Putin and his Ukraine invasion for the current energy disaster. But what transformed that one-off shift in the relative price for energy into a global disaster was two decades of green-energy policy beforehand. In Europe, that includes a fixation on renewables incapable of powering industrial economies absent battery technologies that don’t exist, a refusal to tap domestic fossil-fuel reserves such as shale gas, and a deep and irrational hostility to nuclear power in many parts of the Continent. This has created an energy system of dangerous rigidity and inefficiency incapable of adapting to a blow such as Russia’s partial exit from the European gas market. It’s almost inevitable that the imminent result will be a recession in Europe. We can only hope that it won’t also trigger a global financial crisis.”

Of course, as we have seen already in California, the U.S. may headed down the same road to energy and financial disaster. 

You can read Joseph Sternberg’s full column here.

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Author’s Comment:

Regardless of your personal opinions and views about climate change/global warming, there can be very little doubt that the policies being implemented and urged by governments at many levels have been destructive – higher electricity prices, higher gasoline prices, higher transportation prices that have driven up cost of food and other commodities, damaging economies. 

At the worst end of the spectrum, whole states and regions are facing rolling electrical blackouts and brownouts.  Other areas have asked customers to cut electrical use during certain high-demand times. 

The wisdom of the ages remains true:  You reap what you sow. 

Thanks for reading.

# # # # #

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aussiecol
September 29, 2022 10:33 pm

And I fear australia is going down the same drain pipe.

Andy Espersen
Reply to  aussiecol
September 29, 2022 10:55 pm

It is certainly no thanks to our local politicians if Australia and New Zealand don’t “go down the same drainpipe”.

But let us hold on to the apron strings of the United States : Their economy will survive – they have not surrendered to inane policy decisions reacting to theories about how humankind should behave in the face of possible weather changes over the next 100 years. Next month’s mid-term elections will determine what the outcome of all this will be.

HotScot
Reply to  Andy Espersen
September 30, 2022 1:00 am

Don’t get your hopes up. Even if the results are positive, and by rights they should be but look what happened at the 2020 election, Republicans talk a good game but rarely come through.

KcTaz
Reply to  HotScot
September 30, 2022 2:28 am

You are presuming the “results” in 2020 were the actual results. I have serious doubts about that and I, also, have my fears the 2022 elections will be determined in the same way as 2020’s were.
If they are and the Republicans have done nothing to stop it, though, I admit it’s difficult in Blue states for them to do much, we are most likely doomed.
That said, too many Republicans, aka RINOs, do do nothing but talk. Not all but too many. It takes courage to go against the MSM and now, it seems, the FBI and take action. Politicians are not noted for courage.

HotScot
Reply to  KcTaz
September 30, 2022 3:14 am

On the contrary. I’m convinced 2020 was a corrupt process.

The Other Nick
Reply to  HotScot
September 30, 2022 9:03 am

On the contrary. I’m convinced 2020 2022 was will be a corrupt process.

Ok corrected it for you

beng135
Reply to  The Other Nick
September 30, 2022 9:47 am

Yeah, I’m afraid any election of consequence in the US from now on will be decided beforehand. Starting even before Obama means they’ve had all this time to “fix up” the election process. Actually, no need to tamper with blue states, just fixing/turning the pivotal red (republican) states is sufficient. Pennsylvania was one example in 2020.

Last edited 1 month ago by beng135
MarkW
Reply to  KcTaz
September 30, 2022 7:43 am

Biden is now saying that anyone who claims that an election was stolen is an enemy of democracy and a domestic terrorist to boot.

Funny how the entire Democrat party spent almost all of 2016 to 2020 declaring that Trump was an illegitimate president and that he stole the election. They even tried to impeach him twice because of it.

Stacey Abrams from Georgia has been claiming that her race for governor in 2018 was stolen. She claims that requirements to show ID when voting prevented so many blacks from voting, that it swung the election. Funny thing, despite claiming that 10’s of thousands of blacks couldn’t vote because of voter ID requirements, they have been unable to find a single, actual minority person, who is willing to go on camera and declare that they wanted to vote but couldn’t because of ID requirements.

Gregory Woods
Reply to  Andy Espersen
September 30, 2022 2:48 am

Your optimism outweighs your good sense….

fretslider
Reply to  aussiecol
September 30, 2022 9:43 am

Amazing hack

I never wrote that

A sad imposter

Last edited 1 month ago by strativarius
Alastair gray
September 29, 2022 10:40 pm

Its not like we the down-shouted skeptics have not been warning them for two decades

Graham
Reply to  Alastair gray
September 29, 2022 11:46 pm

I predicted this two months ago here on WUWT.
I have been farming all my life and I have never seen cost increases as large that we are facing here in New Zealand for nitrogen and potassium fertilizer up over 300% .
Diesel essential for tractors and other farm machinery doubled in price .
Shipping container freight has gone up 600 % due to China shutting down their largest port Shanghai due to Covid and lack of containers where they are needed .
All trucking costs are soaring .
These costs eventually are handed on otherwise farmers and growers cut back production as they cannot produce very long with a negative cash flow .

H.R.
Reply to  Graham
October 1, 2022 8:29 am

Graham: “[…] otherwise farmers and growers cut back production as they cannot produce very long with a negative cash flow.”


Ahhh, but then all the farms will be nationalized, and we know what happens when the government tries to run anything.

Idle thought: How many bureaucrats can fit on a tractor?

brent
September 29, 2022 11:46 pm

The revenge of the material economy
The future belongs to manufacturers, energy suppliers and farmers.
https://www.spiked-online.com/2022/09/23/the-revenge-of-the-material-economy/

KcTaz
Reply to  brent
September 30, 2022 2:37 am

Good article, brent. From it, “Maintaining the West’s material economy is critical if we are to resist the new autocratic bloc.”
The problem is, the new autocratic bloc is here in the US and in the White House and in controls both Houses of Congress. I believe their motto is the same as that of the Borg, “Resistance is futile.”
I hope it’s not but I am having my doubts.

I can honestly see westerners immigrating to Russia. At least, Russians will have food and reliable, fossil fuel energy, unlike westerners.

brent
September 29, 2022 11:47 pm

Bill Gates: You’ll never solve climate change by asking people to consume less
https://www.cnbc.com/2022/09/29/bill-gates-youll-never-solve-climate-change-with-degrowth.html
 
Bill Gates Hesitant To Donate Fortune To Climate Change: ‘Innovation Is Not Just A Check-Writing Process
Gates also said he helped with climate change portions of the Inflation Reduction Act, which Congress passed in August 2022. The sweeping legislation addresses several of President Joe Biden’s legislative goals, including encouraging renewable energy purchases through tax rebates.
“I was personally involved in a lot of what got written into it, and then working with the key senators in the last month to get it to pass — that’s far greater than any individual fortune,” he added.
https://www.huffpost.com/entry/bill-gates-climate-change_n_6335f961e4b03e8038bc987b

HotScot
Reply to  brent
September 30, 2022 1:02 am

Someone needs to do something about Gates.

James B.
Reply to  HotScot
September 30, 2022 8:33 am

“Microsoft” was a description of Bill.

beng135
Reply to  James B.
September 30, 2022 9:56 am

“Microsoft” — that’s what she said.

KcTaz
Reply to  brent
September 30, 2022 2:48 am

““I was personally involved in a lot of what got written into it, and then working with the key senators in the last month to get it to pass — that’s far greater than any individual fortune,” he added.”

If he didn’t have a fortune to spread around like manure on a field, no one would listen to his idiocy.
I’m so old, I can remember when Democrats cared about working people, or pretended to. I was a Democrat until 1992 and the Clinton’s turned me, like they did the entire State of Arkansas, from Blue to Red. Carter turned my parents, Blue dog, union Democrats, from Blue to Red and they voted for Reagan in 1980. I was too stupid. My folks where smarter than I and realizing that was a humbling experience, I must say.
Now, Democrats are the Party of super-rich billionaires and super rich and powerful Unions and no one else.

MarkW
Reply to  KcTaz
September 30, 2022 7:49 am

The socialism that was being pushed by the Democrats has always been an economic disaster for the working class. The media has always been willing to lie in order to push this agenda.
The NYT still refuses to return the Pulitzer that Duranty won for his efforts to hide the famine that the Soviets caused in the Ukraine.

tgasloli
September 30, 2022 12:04 am

And, since NATO sabotaged the pipeline, even a peace agreement cannot reverse this disaster. The elites are dangerously incompetent.

KcTaz
Reply to  tgasloli
September 30, 2022 2:56 am

“The elites are dangerously incompetent.”

I beg to differ, tgasloli. Whatever makes you think the elites want to reverse the disaster? It is going exactly as they planned. I would say they are extremely competent in achieving their goal which is the destruction of Western Civilization.

The elites are profiting mightily from the idiotic war in Ukraine and achieving their goals while they are profiting mightily from it. Even CBS in a program they were, no doubt, persuaded not to broadcast said only 30% of the weaons the West has sent to Ukraine have ended up in Ukraine for the war. 70% have “disappeared.”
There is a reason Boris Johnson flew to Ukraing in March and blew up the peace deal between Russia and Ukraine and it wasn’t because they care about Ukrainians.

jeffery p
Reply to  tgasloli
September 30, 2022 9:11 am

Wrong and wrong

LdB
Reply to  tgasloli
October 1, 2022 12:30 am

There is photo evidence released of the culprit
https://img-9gag-fun.9cache.com/photo/amALzZy_460swp.webp

Last edited 1 month ago by LdB
H.R.
Reply to  LdB
October 1, 2022 8:40 am

Blowing the pipeline was serious business that may escalate the war, but I had to laugh at that one, LdB. 🤣

decnine
September 30, 2022 12:46 am

Also, Government response to Covid is turning out to be worse than Covid itself. There’s a pattern beginning to emerge here.

bil
Reply to  decnine
September 30, 2022 1:55 am

This is 1984 territory. The constant threat from an external entity. Every single day played out by the MSM. AGW, Covid, Monkeypox, tax cuts, market meltdown. At least 30 years and on-going.

H.R.
Reply to  Kip Hansen
October 1, 2022 8:45 am

Correction: “[…] the threat from every weather climate event.”

We no longer have weather.

Dave Fair
Reply to  decnine
September 30, 2022 8:35 am

Ideology and stupidity rather than malice.

Drake
Reply to  Dave Fair
September 30, 2022 12:13 pm

Ideology and stupidity AND malice.

ColinD
September 30, 2022 12:57 am

Time for reverse Exxon Knew class action lawsuits. Climate scientists and the institutions behind them knew they were promoting unsupported nonsense.

Gerard O'Dowd
Reply to  ColinD
September 30, 2022 10:29 pm

Common shareholders should offer proposals to be voted upon at Annual SH meetings to deny seats to Climate Change Catastrophists or Anti Fossil Fuel Activists on Boards Of Directors of major O&G corporations XOM, CVX, OXY, Pioneer, EOG. American Corporate By Laws should be rewritten to prevent the aggregation of individual SH votes in passive ETF’s or IRA’s and 401K’s by Asset Managers like BlackRock and Vanguard to stop the ESG scoring of public corporations.

HotScot
September 30, 2022 12:57 am

The cure is most certainly worse than the disease.

michel
September 30, 2022 1:59 am

The WSJ piece is spot on. And yes, you are right, the political establishment in the English speaking countries + Germany are in the grip of a collective mania on climate and energy. From which Germany is now waking. But in the UK we had a striking example of it at the recent Labour Party conference, where the head of the party announced they would be taking UK power generation to Net Zero by 2030.

It cannot be done. At least, it can only be done by cutting electricity consumption to a third or less of present levels.

The striking thing in the piece is a link on the same page to this:

https://archive.ph/o/ryXaO/https://www.wsj.com/articles/gavin-newsoms-dirty-climate-secret-california-rolling-blackouts-green-energy-grid-11662583198?mod=popular_AMP

In which we see, what has been reported by a number of sources, that the result of trying to move to intermittent generation for electricity is to increase the use gas and dependency on it. The link is about California, but I have previously cited an article showing the same is true for New England. And of course it is also the case in the UK and Germany.

There’s a simple choice: you don’t correct for intermittency, and then you have an unusable supply and will be stuck with reductions of use and blackouts. Massive and unpredictable reductions as the wind varies. Or you do correct, in which case the only backup you can use at the required scale is rapid start gas, and then you are at the mercy of the gas market. And are not actually reducing carbon emissions.

Its like the late great Nora Ephron said: any recipe with capers is better without them.

Well, any proposal with wind and solar is better without them. Either use the gas backup by itself if you are trying to maintain supply. Or if you are going to do it by cutting supply, just cut it and don’t bother erecting the turbines. Either way they are a total waste of time.

H.R.
Reply to  michel
October 1, 2022 8:53 am

michel: It cannot be done [net zero by 2030]. At least, it can only be done by cutting electricity consumption to a third or less of present levels.


Wrong. It can only be done by cutting the population to net zero by 2030. Change my mind.

September 30, 2022 2:00 am

Regardless of your personal opinions and views about climate change/global warming, there can be very little doubt that the policies being implemented and urged by governments at many levels have been destructive – higher electricity prices, higher gasoline prices, higher transportation prices that have driven up cost of food and other commodities, damaging economies. 

Climate policy is the matador’s cape behind which the “elite” are hiding, waiting to slaughter the economic bull. They will feast while we starve. That is the real policy.

Matt Kiro
September 30, 2022 2:14 am

“At the worst end of the spectrum, whole states and regions are facing rolling electrical blackouts and brownouts. ”

I’d say that’s at the best end of the spectrum, as some places are already experiencing them. We are looking at people unable to heat their homes and afford enough food this winter.

In Massachusetts the power company just announced a 64% rate increase. Of course this happened two days before the pipelines blew up, almost as if they were warned something might happen

KcTaz
Reply to  Matt Kiro
September 30, 2022 3:04 am

A number of months ago, our gas company raised our level payment plan from $80.00 per month to $129.00. Our gas use had not increased and we had not had an exceptionally cold winter. They provide a handy chart on each bill showing what was used in the last year compared to this year, so it’s easy to see our gas use was quite consistent. I thought that was a whopping increase all at once. Now, it makes me wonder what they knew that we didn’t?

Last edited 1 month ago by KcTaz
MarkW
Reply to  Matt Kiro
September 30, 2022 7:55 am

Since MA doesn’t get any gas from either of the pipelines, just how do you believe that their destruction is impacting MA prices?
Gas prices have been rising steadily for several years.

Rxc
September 30, 2022 4:02 am

It is the implementation of the Morgenthau Plan, which was developed for use in Germany after WWII but never implemented. Now it is being applied to all of Western Developed Civilization by the green progressive movement.

Tom
September 30, 2022 4:28 am

The article makes a major point that cannot be over emphasized: Climate poses a serious risk to global governance. The risk is NOT Climate Change, it’s climate POLICY.

Kevin kilty
Reply to  Tom
September 30, 2022 7:33 am

The energy crisis of the period 1968-1980 was allegedly about finite resources, but all bad policy driven. This one too. For decades we have seen that famines worldwide are largely bad policy. The only antidote to bad policy is to reduce the scale and scope of government.

fretslider
September 30, 2022 4:41 am

“The U.K. may be facing a wave of…” 

Globalist attacks. 

Since Truss announced the fossil fuel expansion there has been a tension. Although reported as a uniquely UK phenomenon with the crash of the pound in these last few days, it wasn’t. Japan suffered similarly and I see no direct comparison for that. A massive intervention to prop up the Yen. But in BBC land it… never happened.

Then just to make sure markets and investors were spooked that little bit more the IMF decided to chime in with its expert advice…. don’t do that

“IMF criticizes huge UK tax cuts and urges a rethink” – CNN

What business is it of theirs?

Last edited 1 month ago by strativarius
John Garrett
September 30, 2022 5:38 am

Mr. Hansen,
Thanks for posting the Sternberg piece.

He has elegantly stated that which we at WUWT know.

Sternberg’s piece should be required reading for everybody on the planet (but, especially, U.S. voters).

Paul Johnson
September 30, 2022 5:56 am

The greatest risk is that Human Extinction will be a self-fulfilling prophesy.

brent
September 30, 2022 7:15 am

The Wizard Of Baca Grande

I leave the Baca with Strong, retracing our route of a week earlier. We pass the Lazy U Ranch and turn south on Highway 17. The desert slides by. Strong tells me he has often wished he could write. He has a novel he’d like to do. It’s something he has been thinking about for a decade. It would be a cautionary tale about the future.
Each year, he explains as a background to the telling of the novel’s plot, the World Economic Forum convenes in Davos, Switzerland. Over a thousand CEOs, prime ministers, finance ministers, and leadings academics gather in February to attend meetings and set economic agendas for the year ahead. With this as a setting, he then says: “What if a small group of these world leaders were to conclude that the principal risk to the earth comes from the actions of the rich counties? And if the world is to survive, those rich countries would have to sign an agreement reducing their impact on the environment. Will they do it?” And Strong, driving as I take notes, looks at me. Then his eyes go back to the Highway 17. The man who founded the United Nations Environment Program and who wrote parts of the Burndtland Report and who in 1992 will try to get the world’s leaders, meeting in Brazil, to sign just such an agreement, savors the questions hanging in the air. Will they do it? Will the rich countries agree to reduce their impact on the environment? Will they agree to save the earth?
Strong resumes his story. “The group’s conclusion is ‘no’. The rich countries won’t do it. They won’t change. So, in order to save the planet, the group decides: isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about?”
“This group of world leaders,” he continues, “form a secret society to bring about an economic collapse. It’s February. They’re all at Davos. These aren’t terrorists. They’re world leaders. They have positioned themselves in the world’s commodity and stock markets. They’ve engineered, using their access to stock exchanges and computers and gold supplies, a panic. Then, they prevent the world’s stock markets from closing. They jam the gears. They hire mercenaries who hold the rest of the world leaders at Davos as hostages. The markets can’t close. The rich countries…” And Strong makes a light motion with his fingers as if he were flicking a cigarette butt out the window.
I sit there spellbound. This is not any storyteller talking. This is Maurice Strong. He knows these world leaders. He is, in fact, co-chairman of the council of the World Economic Forum. He sits at the fulcrum of power. He is in a position to do it.
“I probably shouldn’t be saying things like this,” he says.
http://nwodb.com/?e=03620

Peta of Newark
September 30, 2022 7:16 am

Quote:”….the culprit is energy prices…..”

Yes and no.

In exactly the same way Governments (and the voters of course) want cheap food.
Hence why food has escaped, by and large, the hideous taxes and duties applied to almost everything else folks need and use
Energy escaped not entirely unscathed but at least here in the UK, sales tax (VAT) is applied at only 5% instead of the general rate of 20%

Governments do that because taxing an absolute essential such as Food is a ‘a bit rough’
In the UK and in Europe, Cheap Food was engineered via the subsidies given to farmers. It did not work to make food inexpensive, it worked so as to give Government total control over farmers – what they produced and how much. Hence dictating prices.

Why Government did that was to release money so that folks could spend on ‘other stuff’ – stuff that was not ‘essential’ and could thus be taxed at a much higher rate.
Over the course of time, other stuff came to include everything except food and energy

Thus the tax take skyrocketed and Governments ‘got used to it’
They instantly spent every penny that came and in the UK, whenever a new tax was mooted, it’s blindingly obvious that the intended revenue was already spent before the revenue stream even started.

Further depressing the prices of food and fuel.

See where we’re going?
It’s not **really** the increasing cost of fuel that’s to blame, its the immense amount of tax that folks pay – that every spare penny they had to spend of stuff (other than Food or Fuel) was taken off them in tax.
Even then, look at UK petrol where 66 pence out of a current price of 165pence is tax.

Now do we see where Liz Truss is headed with her tax cutting?
If folks paid less tax, they would not only have the money but also the inclination to spend more on fuel.
She has exactly the right idea and is going for it.

Now then, Who is kicking up the biggest fuss about La Truss’ tax cutting if not the Big Boys of The City.
i.e. The most greedy and grotesque bunch of money grubbing cronies that ever drew breath.
Because every penny of tax revenue that comes in crosses over their desks and when it does they take a cut.
Then when the money is spent (by Gov), it passes under their noses once more and they take another cut.

Not least because vast numbers of Seats On The Boards of those Big City Firms are occupied by ex-government ministers.
That is after all why they became Members of Parliament in the first place.

The System is rotten to the core – see and understand now who especially is blaming Mr Putin for the trouble we’re now in? And why.
The actual and wannabe Cronies

Mr Putin is not the problem
High fuel prices are not the problem

High taxes are – or especially the grotesque parasites that feed, very nicely thank yo very much, off that huge revenue stream.

observa
September 30, 2022 7:18 am

We know it’s not true lefties BUT….it could be because it fits-
Donald Trump Jr shares meme accusing Greta Thunberg of Nord Stream pipeline sabotage (msn.com)
It’s straight out of your hymn book and you just need to contextualize these things. LOL.

H.R.
Reply to  observa
October 1, 2022 9:11 am

msn has no sense of humor. Zero.

Kevin kilty
September 30, 2022 7:23 am

“…Climate Policies being enacted in the UK and across Europe are the “’climate risk’ to financial stability”. That risk “has arrived, although in exactly the opposite manner to what our current crop of eco-financiers predicted.”

Isn’t this arrival through unexpected means how real risks always appear? Right now, worldwide, the risk of fascism is advancing exactly through political parties and people who have been screaming that everyone else is a fascist risk for decades.

The climate zealots, hysterics actually, see nothing bad within themselves and the general public have so many cognitive infirmities that they are likely to accept the zealots claim that wind turbines would have saved the world had we only started sooner. I’m not too sure the coming apocalypse will provide any learning opportunity.

Curious George
September 30, 2022 7:23 am

Witchcraft poses an even bigger risk to financial institutions.

MarkW
September 30, 2022 7:37 am

Small and medium sized companies going under right and left.
Large companies, with sizable government contracts to keep them going, survive and absorb their defunct former competitors.

Sounds like an excellent plan for consolidating economic power in the hands of the elite.

markl
September 30, 2022 8:40 am

That’s been the plan all along aided by complicit media and politician useful idiots.

John the Econ
September 30, 2022 9:20 am

The “climate crisis” is a manufactured crisis designed to distract the masses from the dismal failure that Progressivism has been over the last half-century. By the 21st century, liberated markets in the developing world had reduced global abject poverty to its lowest level in all of history. Most of even the poorest in America today live better than the poorest did 50 years ago.

But to Progressives, the only solution to the consequences of bad Progressive policy is more bad Progressive policy. The phony war on carbon was the perfect excuse.

John I Reistroffer
September 30, 2022 11:50 am

You reap what you sow.

I think a better way to put this quote is….We reap what they sow!

Bob
October 2, 2022 5:58 pm

Clear, concise and short but still offering lots of good information.

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