Well, I do give props where I think they’re due. And there are a couple of alarmists who deserve at least half credit for recognizing a simple fact. I’ve got to say, coming from one isn’t much of a surprise, but the other gives me hope.
I suppose I should back up. If people have been watching, like I have, they would know the recent chatter among the socialists. It’s fascinating that they’ve learned nothing.
At any rate, I’ll share a chuckle with our readers. The lunatics are pretending they understand markets, again. They’ve learned absolutely nothing from their insidiously stupid and failed carbon market scheme. They still believe they understand something in terms of markets and economics. Apparently, they believe there’s some sort of “carbon bubble”. I’ll let Planet 3.0 explain it.
The Carbon Tracker Initiative doesn’t come off like a climate-justice project, but its logic is just as implacable. And it has been explaining that logic to analysts on Wall Street and in the City of London, in language that they can understand. In short, Carbon Tracker has been arguing that “governments will limit carbon emissions, so if your business model is based on burning it, you are overvalued and at risk – sitting on a bubble. BAD haircut coming.” And they’re clearly right. This is a “systemic” approach that shows that markets fail, and sometimes spectacularly, and that right now they’re leading investors (and, oh yeah, humanity as a whole) to disaster.
Yes, BP and Shell are quaking. Again, they’ve learned absolutely nothing from their carbon schemes. They simply don’t understand the nature of markets, economics or people, for that matter.
What they don’t understand, refuse to understand, and can’t understand by the nature of their ideology, is that all of the regulations in the world won’t matter to the companies. I would go on as to why, but I think I’ll let our friends David and William explain the senselessness of this. William Connolley has this to say….
he idea is that because we’ll need to keep unburnt oil in the ground to hit (or rather, to not hit) a 2 oC commitment, a pile of oil companies are wildly overvalued, leading to… well, who cares what it leads to, because it doesn’t matter.
As soon as the “market” expects that new regulation will seriously devalue an asset, its price drops. Bubbles only arise if the “market” is misinformed. The “market” is by no means infallible when it comes to pricing risk, but an expectation of “not much climate policy any time soon” strikes me entirely realistic
which is pretty well what I was going to say, so I won’t bother re-say it (note, BTW, that I’m of course not saying that I think sticking within 2 oC wouldn’t be a good idea. I think it would be an excellent idea. I’m just dubious about its plausibility). He continues with some econ-type stuff about how even if it were true it wouldn’t have the effects claimed, which seems plausible too, but I’m less interested in that. The Economist says about the same.
P3′s writeup says:
There’s a huge amount of evidence that… mainline financial analysts around the world are taking the argument on-board, and in a big way.
That’s hard to make sense of. If true, why aren’t the stock prices of oil companies tumbling? But I boldly plough on, to the report itself (Unburnable Carbon 2013: Wasted capital and stranded assets). And don’t find much. Perhaps I missed it; its quite long and I only skimmed it.
Okay, William didn’t break it down very well, but, at least he understands that the people saying there’s a bubble and people are taking note doesn’t fit with reality. No they’re not taking note. Our friend David Appell will explain it better…… my bold.
This talk going around about carbon bubbles and overpriced assets — come on, who’s kidding who??
Do you live in the real world, or not?
In the real world, assets worth (at least) hundreds of trillions of dollars don’t get held out of the market just because it makes Bill McKibben happy.
The left is living in a dream world if they think so.
The world is going to burn its oil and gas and a fair piece of its coal. ……
Because you and me don’t want to ride our bikes to the store under the hot sun, and we want to fly to Albuquerque when we want to, on the exact day we want to.
No renewables are anywhere near providing the lifestyle we want, and it’s far from clear than any can.
The world has done nothing to eliminate fossil fuels, not even the US (we’re only moving towards natural gas because it’s cheaper, not because it’s better for the environment).
And we won’t — serious climate change is always too far away, too expensive to stop, too easy to ignore.
In the real world, people with lots of money get their way. That means the oil companies and gas companies and coal companies will get their way, and you and I will let them, because the stakes aren’t high enough, for us, to do otherwise.
So Bill McKibben can organize all he wants — while, of course, flying anywhere he needs to fly to at a moment’s notice — and there’s no point pretending otherwise.
The rest is typical alarmism stuff, which I won’t bother repeating. Obviously, I don’t share the worry about CO2 causing the earth to burn, but, that’s for a different post. What I want to note the reality David is addressing. To be honest this is quite refreshing from someone who adheres to the alarmism.
I’ll try to put it in a slightly different light. Oil companies don’t care what regulations will or won’t be passed. It doesn’t affect their business model one whit. Because, as David points out, we’re not going to change. And, as David points out, we’ve nothing to change to. There is no viable alternative to oil. It’s utter fantasy to believe if we just tax it more that we’ll use less. We can’t! More, that cost will only be passed on to the consumers. An oil tax won’t cause on investor to sell. I don’t know if the alarmists realize this or not, but gasoline is one of the highest taxed products already…….. all over the world!
Coal is still in use and will be for a very long time. As will be nat gas.
So, why am I posting something that 99% of the readers here understand? Because this is good news. To get alarmists to address reality is a huge step forward. Once they realize they can’t kill the beast they rail against, then perhaps, we can start having some realistic conversations with realistic proposals instead of having the Bill McKibbens and Jim Hansens and the lot spewing their lunacy.
So, at least for this part, good for William and good for David. I’ll take the baby steps.