VIVEK Y. KELKAR, MUMBAI
Oil companies are no longer allowed to ignore public sentiment: the risks of carbon emissions are real. Whether corporations are state-owned or market-listed, the transition away from fossil fuels means massive social and political upheaval.
By the standards of global capital markets, Engine No. 1 is puny. It has only 22 employees and manages a mere US$240 million in assets. But in the last few weeks it succeeded in upending the governance of ExxonMobil—a corporation worth over US$250 billion. Yesterday, capping off a month of furious politicking, Exxon’s shareholders elected a third Engine No. 1 candidate to their Board of Directors. The new members have pledged to change Exxon’s raison d’être, arguing that the Board needs “directors with experience in successful and profitable energy industry transformations who can help turn aspirations of addressing the risks of climate change into a long-term business plan, not talking points.”
Engine No. 1 describes itself as “an investment firm purpose-built to create long-term value by harnessing the power of capitalism,” but this anodyne description conceals the brilliance of the strategy it employed to get three directors whose views are sympathetic to climate change activists on the Exxon board.
This is just one of a series of events that last month sent shockwaves through the world of Big Oil. In early May, a district court in the Hague ordered Royal Dutch Shell to cut its global carbon emissions by 45 percent before 2030. These cuts are much steeper than those Shell has proposed.
Lawyers for the plaintiffs represented seven activist groups, including Friends of the Earth and Greenpeace, on behalf of 17,200 Dutch citizens. The plaintiffs argued that in failing to take more aggressive measures to mitigate climate risk, Shell was in breach of article 6:162 of the Dutch Civil Code and Articles 2 and 8 of the European Convention on Human Rights. Shell, they said, was violating human rights by not doing enough to fight global warming.
The court agreed. Shell will appeal, of course. But the decision sends a very clear message: From now on, claims of climate damage are litigable.
Weeks before, Shell had asked its shareholders to vote on a non-binding resolution treating the corporation’s energy transition strategy. Under the terms of the resolution, Shell would eliminate net carbon emissions by 2050 while expanding its renewable and low-carbon portfolios. The plan involved cutting net emissions by 20 percent before 2030, 45 percent before 2035, and completely before 2050—considerably shy of Paris Treaty targets for absolute emissions in 2030. Nearly 89 percent of the shareholders voted in favor.
But another activist group, Follow This, quickly rendered these votes redundant. Backed by Shell’s proxy advisor, Pensions & Investment Research Consultants (PIRC), Follow This put forth a competing resolution in favor of a much more aggressive policy. Shell is usually seen as the far-sighted oil major, but PIRC does not agree: Shell, they wrote, “does not seem to have a clear plan for the competitive aspects of the energy transition.” The competing resolution won more than 30 percent of the shareholders’ support. Under UK governance codes, this means Shell now has to go back and debate the issue with its shareholders all over again.
ENGINES OF CHANGE
Typically, no one would take a fund with a name like Engine No.1 seriously, especially when it holds less than one percent of Exxon’s stock. But no one’s laughing. Engine No.1 managed to win over three of the company’s biggest shareholders, and indeed three of the largest global investors in equity markets: BlackRock, Vanguard and State Street Corp. They also garnered the support of CalSTRs, one of the United States’ biggest pension funds. BlackRock recently joined Climate Action 100+, a group of 545 institutional investors committed to greenhouse gas emission reductions. Together, Climate Action 100+ manages US$52 trillion— nearly half of all the managed assets in the world.
Milton Friedman famously argued that a company’s only obligation is to its shareholders. “There is one and only one social responsibility of business,” he argued. “To use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” The oil majors and their defenders have sworn by the first part of the doctrine—increase profits—for decades.
Engine No. 1 accepts Friedman’s premises. It argues that by fighting the climate regulation tides and ignoring the business risk of its carbon emissions, ExxonMobil has been failing to deliver long-term value to shareholders. The corporation has known about climate change since the late 1980s, but it concealed what it knew from the public. They should have been transparent about the risk of climate change to the business: That’s what “without deception or fraud” means.
In making this argument, Engine No. 1 is not contradicting but expanding Friedman’s case. A company, Engine No. 1 holds, is accountable to not just shareholders but to a wider swathe of stakeholders, because failing to consider the interests of these stakeholders endangers profits. As Engine No. 1’s website puts it,
We share an emerging view of value creation. One that takes into account a company’s impact and the ways that impact drives shareholder value. Over the long-term, we believe shareholder and stakeholder interests converge, and companies that invest in their stakeholders are better, stronger companies as a result.
A LICENSE TO OPERATE
Theorists have long posited a so-called social license to operate. Simply put, this means that a business requires the broad acceptance of its activities from the larger society in which it operates. Without this, risks to the business rise and costs accrue. Society at large is, therefore, a stakeholder that a business must take into account. These concepts are not new. The Hague court case proved the relevance of this concept to the oil and gas industry.
For nearly a century, economists have debated the nature of externalities, or costs imposed upon a third party whose consent was not sought in incurring that cost. When companies pollute, for example, they impose a cost on others. Carbon taxes are one way to internalize these costs. Think tanks friendly to hydrocarbons have traditionally argued that such taxes are iniquitous because they are regressive. But in recent years, some have quietly come to view carbon taxes as better than the most likely alternative—leaving hydrocarbons in the ground unexploited. In March, the American Petroleum Institute came out in favor of a carbon tax. This leaves the bigger question in economics unanswered, however: If we assume the climate is an external good—part of the commons—can economic models adequately set a price on it?
The risks of emitting carbon are real, even if we are unsure how significant these risks are. This means polluters must be forced to bear the cost of their emissions, whether or not by regressive means.
Debates about the regulatory framework for this are ongoing in various global forums; little has been resolved, and solutions thus far are piecemeal. But the how is not the point. What recent events clearly show is that oil companies will not be allowed to remain impervious to public sentiment.
Suppose that by using the courts or investor pressure, advocates of the position that the earth must not warm more than 1.5ºC above pre-industrial levels succeed in advancing their agenda. By some estimates, this would render worthless as much as 80 percent of the energy majors’ assets over the coming three decades. Vast swathes of these companies’ oil reserves would be left in the ground. These reserves will become stranded assets.
THE COST OF STRANDED ASSETS
The International Energy Agency defines stranded assets as “investments which have already been made but which, at some time prior to the end of their economic life, are no longer able to earn an economic return.” They involve both the costs, already paid, for the rights to explore for fossil fuels, and the cost of the infrastructure, already installed, for extraction and processing. The companies may have to write off these costs, never to recoup them.
Conservative estimates suggest this will amount to a loss of US$900 billion. This may be a small price compared to the cost of unmitigated warming, but it raises questions that are both real and difficult. Consider, for example, the capital markets. Share prices of most oil, gas, and coal companies listed on global stock exchanges are lower than they were five years ago. ExxonMobil share prices are still trading near 2005 levels, despite tens of billions of share buybacks.
If fossil fuel companies fail to build the risk of climate change policy into their strategy, hundreds of billions of dollars in share market value alone could be lost. Traditionally, capital market investors favor companies with access to large proven reserves. Among the largest of the listed oil and gas companies, there’s a positive relationship between enterprise value, calculated as market capitalization plus net debt, and proven reserves with a high probability of extraction.
Several days ago, the credit rating firm Moody’s noted that oil producers are now facing higher credit risks because of The Hague court’s ruling. They described the growing momentum of investor activism and investors’ diminished enthusiasm for emission-heavy industries: This, they wrote, will diminish the fossil fuel majors’ access to capital. Growing pressure to shift business away from fossil fuels will mean outsized spending on R&D. Capital will move toward assets in better odor with public opinion; companies must be seen to be playing a constructive role in preventing global warming.
For corporations, the cost of switching strategies is massive. Many, like Shell and Total, have already invested in solar power and bio-fuel energy assets, but the IEA estimates that in total, the oil and gas industry has directed less than one percent of its investments toward a low-carbon future. Shell’s estimate of the cost of its new strategy to develop and market new renewable and low-carbon products would be US$5 billion. Investor activists argued, successfully, that this wouldn’t be enough.
THE GEOPOLITICAL RISKS
The problem of stranded assets is not confined to corporate entities listed on stock markets. Whole countries will be stranded. About 70 percent of the globe’s oil and gas reserves are in the countries that make up OPEC, the Gulf Cooperation Council (GCC) and countries such as Russia, Iraq, Iran, and Venezuela. If the 1.5ºC target is to be met, most of their hydrocarbons will have to stay in the ground. These countries can’t easily transition to new sources of national income. They face not just a loss of GDP, but a significant loss of government revenue from export receipts. An IMF estimate, for example, indicated that in 2020 the GCC would lose US$150 billion, down 37 percent from 2019, owing to the impact of Covid19 and lower oil prices.
GCC countries have been trying to diversify their economies in recent years, but they have focused on a narrow set of options, like real estate, aviation, and logistics. Moody’s reports that the burden of government debt in Oman and Saudi Arabia now exceeds both countries’ sovereign wealth fund assets. Bahrain’s interest burden alone represents nearly a quarter of its revenues. Kuwait is already showing signs of a liquidity crunch.
Countries that abandon their oil and gas strategy need to invest in sectors that offer not just higher returns, but better employment opportunities. This is easier said than done. The IMF reports rising youth unemployment rates in the GCC. This spells considerable regional disquiet—even without adding Iraq and Iran to the mix.
The same applies to Venezuela and other Latin American countries that depend heavily on revenues from oil and gas. In many of the countries that make up OPEC and the GCC, these industries are state-owned. Governments thus face the task of changing their business models without unsettling their countries’ social and economic fabrics. A more dangerous political task could hardly be imagined. Arguably, some, like Saudi Arabia, have taken baby steps in that direction. But whether corporations are state-owned or market-listed, the transition away from fossil fuels means massive social and political change. It means economic change, too: we will need new paradigms to account for costs to the commons.
None of this will be easy in a world already bubbling with geopolitical tension.
Vivek Y. Kelkar is co-editor and CEO of the Cosmopolitan Globalist.
In short, what we have here is another recipe for economic, hence social and political, chaos in the name of climate change. In this case the leading culprits are “activist investors” rather than politicians, bureaucrats and the expert class—but hubris is hubris and it inevitably confronts its nemesis, which is reality. The reality here is that a business model founded on ideology is a business model programmed to fail.
On the subject of other possible disasters, I believe that a Chinese invasion of Taiwan, expanding into a major war between China and the United States, is a real possibility within five years or so. In the alternative, a Chinese invasion of Taiwan to which the US and the so-called world community did not respond forcefully is also possible. And that would be a disaster of a different kind: a tacit acknowledgement of China’s status as global hegemon. What say the Cosmopolitan Globalists…?
Just as you wrote this comment, I was listening to this hearing: https://www.uscc.gov/hearings/deterring-prc-aggression-toward-taiwan If you feel like listening too, I’d be curious to hear your thoughts.
Well, I did listen in and I do have some thoughts.
To begin with the basics: As Clausewitz said, war is a true political instrument, a continuation of the same by other means. Thus if China decides to go to war over Taiwan, it will be with some political objective in mind. And we all know what that would be: unification, the extinction of Taiwanese independence. Nothing less would be worth the risks attendant upon war. Consequently, I believe that if China ever does decide on war, it will go for the big solution: invasion and full occupation of Taiwan. Anything less would be a devastating, perhaps fatal, blow to the Chinese regime. Historical precedent: Argentina’s invasion of the Falkland Islands and the political fallout from its failure.
This may sound ominous but actually it’s good news of a kind. A large-scale amphibious invasion is perhaps the most complex operation of war. From meteorology through geography to logistics, the problems posed are daunting—as reading about D-Day and the Battle of Normandy will reveal. Getting troops across 100 miles of water, seizing and consolidating bridgeheads, building up sufficient forces for a breakout and keeping the whole array supplied, all while being shot at—no simple task!
It’s been said that good generals study tactics, but great ones study logistics. Back in the age of Frederick the Great, armies were small and the main weapons had sustained rates of fire of one or two rounds per minute. Nowadays an infantryman can fire off his entire basic load of ammunition in a matter of minutes. Modern battle consumes ammunition, fuel, supplies of all kinds, at a prodigious rate. And all of that would have to flow uninterruptedly across the Taiwan Strait.
Thus the defenders, if they fail to prevent the invaders from establishing a bridgehead, should attack their lines of communication: ports of embarkation, ships and aircraft in transit, the logistical bases in the bridgeheads themselves. The US Navy’s attack and cruise missile submarines are well suited for that task, armed as they are with Tomahawk cruise missiles and Harpoon antiship missiles in addition to torpedos. The missiles enable them to engage targets at standoff ranges, greatly complicating the enemy’s antisubmarine operations. The US Air Force’s B-52 and B-1 bombers could supplement the submarines as they too can carry various standoff weapons. In the early stages of the conflict, US military operations should focus on disrupting the enemy’s communications.
Since it would be impossible for the PLA to hide preparations for a full-scale invasion, there would be time for the US to position its forces. Better still, there should be a standing forward deployment of submarines dedicated to the defense of Taiwan—subs are stealthy and highly mobile, thus difficult to neutralize. Indeed, knowledge of such a deployment might serve as a deterrent, since it would put the Chinese regime on notice that an invasion would automatically involve the US in hostilities.
I could go on, but perhaps this will do for now.
Wouldn’t the best deterrent of all be an independent Taiwanese nuclear arsenal that did not depend on the fiction of the shelter of the U.S. nuclear umbrella?
Perhaps, but that’s not going to happen. And since it isn’t, the US has to have realistic military options that also embody a deterrent effect. There’s no point in rhetorical support for Taiwan if it’s not backed up by a credible threat of force—words deter nothing. Obama talked quite a a lot about the beastliness of V. Putin’s seizure of the Crimea. Has he given it back to Ukraine?
Also, we have other important allies in the Western Pacific area. What would they think if the US washed its hands of Taiwan and let China have its way? I’ll tell you what they’d think: that there’s a new #1 global superpower. And that would not be good. China’s utterly duplicitous and irresponsible behavior regarding the pandemic was a preview of how the regime would behave if freed of all restraint.
Anyhow, I’m not too worried about nuclear war, which would be self- defeating for both sides. The reality is that the Chinese regime would attack Taiwan in a New York nanosecond—if, that is, it could be certain of victory. But as I mentioned, an amphibious invasion of Taiwan would be a hair-raising roll of the dice. If 28 years of military service in peace and war taught me anything, it’s that things will always go wrong. There are many, many things that can go wrong in the course of an amphibious assault. And there are quite a few things in this scenario that the defenders can do to help things go wrong, e.g. stand-off missile strikes on the ports from which the invasion is being mounted. One of Hitler’s numerous mistakes was his failure to do this by directing V-weapon strikes against the British ports from which Overlord was launched. Let’s not repeat his mistake.
Thanks for your interesting reply. Of course, you’re right; it’s not going to happen. Taiwan won’t be developing an independent nuclear deterrent and neither will Japan or South Korea.
Despite this, I think there is something we can learn from the precarious position all three of these nations (not to mention Australia) find themselves in. Instead of insisting that these nations shelter under the American nuclear umbrella, they would have been better off if decades ago they developed their own nuclear deterrents. This never happened for a variety of reasons not the least of which was an American insistence that it wasn’t necessary because the United States would always be there. The bipartisan consensus of American foreign policy mandarins was that these nations should never rely on their own sense of nationalism but instead cleave to American power. In retrospect we now know that this approach put these nations at greater risk not lesser risk.
It doesn’t matter whether the next president is Trumpian or Obamaian; the idea that the United States would respond to a nuclear attack on South Korea with a nuclear attack against a North Korea armed with ICBMs that can reach Seattle, San Francisco or Portland just strains credulity. The same is true if China or North Korea launched an attack on Japan.
As far as a Chinese conventional attack on Taiwan, is the American navy in any shape to respond? Not if Adam Garfinkle is to be believed. Even if our navy was capable and stout-hearted, would an America obsessed with identity politics and climate change be willing to lend Taiwan a hand? I have my doubts. After a Chinese attack on the Taiwan, how many months would it take to complete an environmental impact statement assessing the climate change implications of an American response? I’m only being half-facetious; is there any doubt that the climate change fundamentalists would demand this?
Simply put, Taiwan and South Korea would be better off today if they had developed their own nuclear arsenals decades ago. Japan would be better off today if they had shed its pacifist tendencies in the 1970s and 1980s instead of relying on the United States.
The bipartisan consensus of liberal internationalists and neoconservatives that has ruled the roost since the 1980s is leading us to a calamitous future. Its just one more example of the self-appointed experts proving to be tragically wrong.
China has an ancient lineage; it is a patient power. It’s doubtful that they will act impulsively. Instead they will wait until the United States completes the process of emasculating itself.
Whether that takes 10 years or 50 years, sadly, I suspect that Taiwanese democracy is toast.
The question of US political will is indeed an uncertain one. I doubt, however, that China, North Korea or any other country would venture to risk provoking a US nuclear response. You can never be quite sure, can you?
Regarding independent nuclear deterrents in the hands of smaller nations I will just say this. They’re useless unless they’re large enough to inflict significant damage on the aggressor. Taiwan could never have developed a nuclear deterrent force large enough to intimidate China. On the contrary, it would only have constituted a provocation. Admittedly, Japan’s case is somewhat different, but as a geographically small, densely populated country, it’s extremely vulnerable to nuclear attack. Against such countries, China has the advantage of a much larger geographical space and and population. Only another major nuclear power, i.e. the United States can mount a plausible deterrent to China.
I’m not sure that I buy the “China is patient” argument. There’s no reason to think that they’d wait to move on Taiwan if their calculations convinced them that they have the capability to launch a successful attack within a year, or two years, or five years. Indeed, all indications are that the regime is ratcheting up its pressure on Taiwan. That indicates growing confidence in the PLA’s ability to conduct an invasion. It seems only prudent for the US to pour cold water on such ideas.
As for the US Navy, the essence of successful warfighting is to opposed the enemy’s weaknesses with our own strengths. That’s why I laid stress on the submarines. The USN currently has 54 nuclear attack submarines in commission, all armed with Tomahawk, plus four of the “Ohio” class converted from nuclear ballistic missile submarines to cruise missile submarines. The latter can each carry as many as 154 Tomahawks, which have a range of over 1,500 miles. The Harpoon missile (which is currently being reintroduced to USN attack submarines) has a range of about 120 miles. The mobility, stealth and striking power of this force is why I nominated it to spearhead the US response to a Chinese invasion of Taiwan.
I tweeted Claire, Monique, Owen and some of the CGers that I have been hearing from people in Taiwan that it is rumored that the Taiwanese govst currently inability to get sufficient numbers of Covid vaccines is do in part to the US, EU, Germany, and vaccine manufacturers not wanting to offend mainland China by speeding up shipments. Again I don’t have the knowledge to do my own independent analysis of the veracity of these claims but I personally do find it “believable” at the very least that the US and EU would slow-walk vaccine exports to Taiwan(especially as the US is blocking almost all vaccine exports altogether) to not offend Beijing.
Vivek Kelkar is right, the transition away from fossil fuels means massive social and political change. It’s change that will leave those of us in the West, poorer and less competitive.
If the recent series on climate change demonstrated anything, it’s that solar and wind power will never be reliable and nuclear power will never be politically viable.
Yet the push to electrify everything continues unabated. How long will it be until our cars run on electricity and our homes are heated with electricity? And when the power fails because of the unreliability of the new electricity generation technologies, what choice will we have but to hunker down in our freezing, damp homes without the ability to even take a short drive to the store for a container of milk and a loaf of bread?
Despite, the facile arguments of many of the climate change hysterics who submitted articles to the CG series, we all saw what happened in California and Texas when the electricity went out. Imagine that scenario playing out over and over again throughout the Western world. That’s what’s coming.
What’s most fascinating about Vivek’s commentary about the climate activism of the corporate community and financial investors is that these so-called capitalists are turning the keys to the economy over to China. There’s no nation in the world that benefits more from the economic consequences of climate change policy than China. It’s a nation that pays nothing but lip service to the need to develop green energy policies while it continues to gladly accept all the business that once could be profitably conducted in the West but will now be based in a nation where energy is affordable, labor is cheap and support for environmental protection (and the costs that go with it) are little more than a public relations effort to con credulous Americans and Europeans.
What will the world be like for our children and grandchildren when Europe and the United States are in extremis and China rules the world? That’s the direction we’re headed in and the obsession with climate change is hastening the day when an ascendant China rules the world as the most powerful hegemon.
The irony is that Western collapse is due to suicide not homicide. That it is facilitated by western capitalists is a great irony.
I guess Lenin was right after all about capitalism and the hanging rope.
I’m not opossed to electrification, simply what is proposed to power it. Not being a fan of renewables due to their problems of intermittency, and how they increase grid fragility.
In terms of Western nations destroying their fossil fuel industries, it should be obvious (and most definitely is to Russia and OPEC) that this does not mean the world will use less oil and gas. It just means it will be produced in other places with less rigorous environmental and human rights standards. Eventually, electrification will reduce the use of hydrocarbons in the West, but it certainly won’t eliminate them. And of course materials manufacturing, petrochemicals, and the fertilizer that feeds much of the world requires them. We cannot at present have an industrial, high tech civilization without fossil fuels. It’s simply not possible, regardless of how much certain groups might wish it, or what laws legislatures pass, or what verdicts judges decide.
I think Lincoln captured Western collapse well when he said, “If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.”
He was speaking of America specifically of course, but it’s applicable to all liberal democracies.
I do think the Wyoming announcement is significant given the mixed feelings traditional oil and gas states in the US and provinces in Canada(looking at you Alberta) have towards nuclear. In fact if oil and gas regions like Alberta and Wyoming could get as enthusiastic about nuclear as they are about oil and gas I believe it could be a really good thing because something the Wyoming’s and Alberta’s of the world are good at is enthusiasm unlike say Ontario which is heavily nuclear but would rather not advertise it to outside world especially outside of Canada and into the US(I have some more thoughts in nuclear power policy in Canada but am still trying to think through what I want to stay).
One comment I will make is that at one premise of Canada’s policy regarding nuclear power back in the 1970s and 80s was that natural gas should solely be used for petrochemical, fertilizer, and polymer production. This was supported not just by the Federal Govt of Canada but also the provincial government in Alberta of the day who felt the reserving all gas production essentially for petro-chemical, fertilizer and polymer production would lead to better long run wealth for the province and Canada. The voters and industry later on rebelled against this as new gas finds were discovered and there was a realization if you only used gas as a chemical and polymer feedstock you would essentially be leaving most of Canada’s gas reserves in the ground longer than the lifetime of most current voters.
Which kind of ties back to the issue of electrification which is that yes fossil fuel production is necessary for certain use cases like polymers and fertilizers but if you electrified the entire economy based around nuclear excluding these areas in doing so you would still shrink the fossil industry into something much much smaller than it is today and politicians in places like Alberta, Wyoming, and Texas are really uncomfortable with thinking about this.
On the subject of nuclear power and Alberta I found this panel discussion in Calgary about nuclear power to be quite fascinating in part as some of the audience criticism rare in this types of discussions obviously came from the political “right” and oil and gas perspective and I think the four panelists were all Central Canadian “elite” types that generally don’t get a good reception in Alberta.
I hope Owen and Gareth find it interesting.
(Part I) This seems to me a terribly overwrought response, WigWig. At step after step, the premises of your argument seem uncertain and thus the conclusion–“We are doomed!”–far from inexorable. I certainly didn’t conclude from the recent series of articles that “If the recent series on climate change demonstrated anything, it’s that solar and wind power will never be reliable and nuclear power will never be politically viable.” Just yesterday I was gratified to see Governor Gordon announce on Twitter that Wyoming will host a new nuclear power plant. Not only was I pleased to see this announcement, I was amazed to see the response. One after another positive, rational comment–as if the world’s been reading the Cosmopolitan Globalist! The word seems to have gone out: If you’re genuinely concerned about climate change, you *must* be in favor of nuclear power. Comments like this:
“Excited for Wyoming! Swapping out coal for nuclear is a great move.”
“This is good. I’m shocked a Republican would do something forward thinking. What’s the
“Wish California was as forward thinking and devoted to energy and the environment as
Wyoming – yes I mean that.”
“Make sure you paint the reactor and all out buildings GREEN. Nuclear is the greenest
“The opinions on this is where you find who really wants to help the environment and
who just wants to punish the western world.”
Obviously, this isn’t a well-conducted, proper poll with a representative sample. But I’d be very curious now to see one. I wonder if attitudes are really changing, especially among a younger generation that’s deeply worried about climate change but less technophobic, or less propagandized against nuclear power, than their parents? So that premise is uncertain.
As for the idea that solar and wind will never be reliable, I don’t know how you got that from what we published. Gareth argued, for example, that there are big challenges in making it reliable. No one rational would argue with that, I submit. But to suggest it’s *impossible* to make it reliable flies in the face of everything we know about human ingenuity. Right now, the market incentives in favor of making it reliable are massive: Everyone and his brother knows that if he cracks that problem, he’ll be very, very wealthy. Do you really mean to say that the country that served up mRNA vaccines in less than a year can’t solve these problems, *ever?* That doesn’t seem to me like “appropriate, hard-boiled skepticism,” it seems like a philosophical commitment to defeatism–and one for which there just isn’t good evidence. Gareth’s essay seemed to me a sober corrective to the idea that we can electrify everything by, say, next year. But the idea that we’ll be able to crack the technical problems involved in electrifying many things within a decade or two hardly seems far-fetched.
Next is the idea that the power will start serially failing everywhere in the West. Highly unlikely. What’s much more likely is that we just won’t meet those ambitious climate targets. No one is going to force anyone on to an unreliable grid. Texas’s grid did not fail because wind and solar were part of it. It failed because no part of the grid was properly winterized. (And as usual, that particular storm cannot be attributed to climate change, but atypical storms, in general, may be more frequent because of climate change. So mitigating the risk is a sensible thing to do if you’re concerned about the stability of the grid.) No one is going to plunge Western countries into darkness. Much more reasonable to worry that local environmental policies (like shutting down Keystone) will simply shift the production of fossil fuels to countries with fewer inhibitions about polluting, but even that isn’t a given. (Continued below)
Part II Next, I don’t see how China most benefits from climate change policy. It remains to be seen whether China is serious about reducing its emissions. Xi Jinping has said that China will reach peak emissions before 2030 and be carbon neutral by 2060. Now, you might (rightly) say, “China lies about everything, why should we believe this?” I would respond that it depends whether the Party accepts the scientific arguments about climate change. It’s entirely possible it does. When that country decides to have a revolution in service of an ideology, nothing stops it. It’s absolutely unconstrained by such considerations as “property” and “human rights.” When the Party decided the world suffered from “overpopulation,” we all know what happened–it dreamed up the most grotesque and murderous population control policy mankind has ever imposed. Do you really think they’d flinch if they decided climate change was a similar risk? I don’t know if they do, but suspect they might: Chinese scientists are capable of reading IPCC reports. If the Party genuinely thinks it’s important to reduce emissions, it will. Whether they genuinely think this is an open question, and neither of us know the answer. But there are some signs that they do. China’s COVID-19 response, for example, contains elements of the policy you’d expect to see if the Party was taking this seriously: Their pandemic stimulus package includes budgets for things like charging infrastructure, public transit, national high-speed rail. The Party has also made a number of statements discouraging coal plant projects from ministries and supervising agencies–an indication they don’t intend to stimulate the economy through carbon-intensive industries the way they did after the financial crisis. This to me suggests that yes, the Party does take the idea of an energy transition seriously (although the amount of coal they continue to burn suggests the opposite). I’m sure that among their priorities is developing–and then selling to the West–low-cost green energy technology. Or stealing ours. If, for example, they crack the problem of stable transmission before we do, they’ll dominate the global market. The best way to avoid that is to invest in our own technology and beat them to it.
Will China “gladly accept all the business that once could be profitably conducted in the West but will now be based in a nation where energy is affordable, labor is cheap and support for environmental protection (and the costs that go with it) are little more than a public relations effort to con credulous Americans and Europeans?” Well, yes–the chances of that are much higher now because we abandoned the TPP. That was a comprehensive solution to the very problem you describe, and leaving that agreement was one of our biggest foreign policy blunders this century. But it’s not impossible to imagine that we could re-enter it, although I’ve seen no movement on this so far from the Biden Administration, and suspect this is because Trump so thoroughly poisoned the well on trade agreements in general and the TPP in particular that Biden thinks it would be politically disastrous to pursue it. That’s a great shame. But again, I don’t think it an *inevitability* that all of this business will move to China: We have a lot of control over this, and we could, if we wished, prioritize reentering the TPP, or a new version of it. And we should. In any event, while labor is cheap in China and expensive in the West, the West will always be a more attractive place to do business than China because of all the advantages we have in ease of doing business, a property regime that protects investors, an educated workforce, low corruption, and the rarity with which we imprison and execute our most successful tycoons. So low-cost, low-wage work will certainly continue to be offshored–if not to China, then to somewhere in the developing world–but unless we’re very stupid and make it impossible for talented people to emigrate to and do business in the West, we’ll continue to attract and generate skilled and high-tech businesses.
A further reason to think China’s commitment to environmentalism may be more than lip service is that it would fit a well-known pattern. Generally, poor countries don’t give a damn about the environment. Escaping grinding poverty will always be a higher priority than clean air. But as a rule (and I can think of no exceptions), once countries have a large middle class, people become concerned about unbreathable air and other environmental concerns. China is right on schedule for this. Some (serious) estimates suggest China will reach its Paris targets even sooner than expected because of this: https://www.nature.com/articles/s41893-019-0339-6.
The authors of those articles aren’t wackadoodles; those are serious estimates. As China’s cities become wealthier, their per capita emissions begin to drop. Again, this is fully plausible because it’s just what you’d expect: the relationship between per capita emissions and per capita GDP forms a bell-shaped curve, known as a Kuznets curve. As cities become richer, their emissions per capita begin to level out and decline. Chinese cities have been paying more attention to environmental problems–including greenhouse gas emissions and air pollution–as they become wealthier. Bang on schedule. So their estimate of Chinese emissions levelling out between 2021 and 2025 doesn’t strain credulity.
(Mind you, they’ve reduced emissions in these cities so by cutting down on heavy industry and power generation within their city limits. There’s an upper boundary on how much you can do that: at some point you run out of places to move your heavy industry and power plants. They could move most of their industrial production abroad and import the products, but then emissions would go up in other countries. Ultimately, the problem has to be solved either by nuclear power or by technological advances that make renewable energy stable. But both are plausible. The country that cracks these problems first will supply the tech to the rest of the world. It would be much better for the world if we do it first.)
This brings me to my next point: a key reason GHG emissions might be on the verge of levelling out in China is the precipitous drop in China’s population. I’m sure you’ve read that Party is now so terrified by this, and rightly so, that they’re urging everyone to have three children. But it’s too late. China is facing demographic implosion. The barbaric one-child policy–and sex selective abortion–has left too few women of childbearing age for China ever again to reach the replacement rate.
While I take the problem of China very seriously in the near term, I am not especially concerned about Chinese hegemony in the long term. You can’t rule the world from a retirement home. Key quote from a report by China’s central bank “If China narrowed the gap with the United States over the past 40 years, relying on cheap labor and a huge demographic dividend, what will it rely on in the next 30 years? This is worthy of our deep consideration.” https://www.npr.org/2021/05/11/995490687/chinas-birth-rate-drops-as-census-data-warn-of-aging-population They can consider it as deeply as they want–it won’t solve the problem.
The only thing that’s preventing total population collapse in China is better health care, which has extended the average Chinese citizen’s lifespan. That demographic dividend is spent. Demographers estimate China’s population will be halved by the end of the century.
The West is facing exactly the same problem, of course. But the West has a huge advantage in this regard because we have a tradition of immigration. China does not. If we quickly get our heads out of our nativist asses, we can increase our population quickly, and we can increase it with the world’s most talented and industrious people. This is not the policy trajectory we’re on now, but it’s a fully plausible one. We *must* do it, so I assume eventually we will–after trying everything else first. (I haven’t yet read Matthew Yglesias’s book about this, but I am sympathetic to his premise: https://www.amazon.com/One-Billion-Americans-Thinking-Bigger-ebook/dp/B082ZR6827.)
Since your premises don’t seem sturdy, I see no reason to accept your conclusion that by the time our children and grandchildren are grown, Europe and the US will be in extremis and China will rule the world. As you’ll see in the week to come, I do see many reasons to be alarmed about humanity’s future. But this particular path, at least, doesn’t strike me as the likely route to the extinction of our civilization.
In fact, my long-term concern about China is the opposite of yours. You’re worried about Chinese hegemony. I’m worried about Chinese collapse, and the terrifying instability that would result from it. In large, I agree with Peter Zeihan’s assessment: China is not a viable propostion, long-term: https://zeihan.com/a-failure-of-leadership-part-iii-the-beginning-of-the-end-of-china/ This makes it all the more dangerous short-term, but unless we sleepwalk into disaster (which we might), we will outlive and outlast China, and your kids and grandkids will have other things to worry about.
Thankfully, I don’t see any reason to concede that Lenin was right–about anything.
(Also, while it isn’t a premise of your argument, we didn’t run a single “facile argument” by a “climate change hysteric.” If you thought Dr. X’s arguments were facile or hysterical, it can only be because your biases.)
Claire, I wish I shared your optimism. I have one other comment is response to your Part 1. While it’s true that the recent calamity in Texas had far more to do with the fragility of the grid, it is also true that electricity generation in Texas was clobbered by malfunctioning wind turbines damaged during the storm. Wind and solar power generation are exposed to the elements because they depend on the elements. Fossil fuel and nuclear generation are not vulnerable to the weather because they are in fortress like structures immune to the weather.
I’m not sure why you’re minimizing the recent power outages in California. They happened almost simultaneously with horrific wildfires. If more people had Teslas and fewer had Fords, how would those threatened by the fires evacuate? It seems entirely plausible to me to suggest that the California experience might foreshadow an ominous national experience.
As for China, actions speak louder than words. What else do we need to know besides the rate at which they are constructing coal-fired plants and the fact that they are the largest importer of fossil fuels in the world?
How does China benefit from the West’s focus on climate change? They are already the largest producer of solar arrays. How long will it be before they dominate the production of wind generating equipment?
Might the Chinese population implosion mitigate China’s carbon emissions? Sure. But will any decline in China’s carbon emissions caused by population decreases make up for the increasing emissions caused by the remarkable growth in China’s GDP?
It’s doubtful that the TPP, had it been enacted, would have had a positive impact on any of this. My guess is that the impact on the United States would have been what the impact of trade agreements has always been; a dramatic decline in the standard of living of working people while the Starbucks set was barely impacted at all or actually benefited from the marginal increase in GDP that trade agreements sometimes spur.
Whether or not I am right about this (we will never know) you’ve got the politics wrong. The TPP was toast before Trump was elected. It was never submitted to the Senate because the Democrats would have opposed it en mass. Had Obama asked for a Senate vote, more Republicans would have voted aye than Democrats. Hillary Clinton and Donald Trump both opposed TPP during their presidential campaigns.
You’re right that China’s population is crashing and that it’s as bad or worse in Europe. The United States is now afflicted by the same disease.
As Yogi Berra supposedly said, “it’s hard to make predictions, especially about the future.” What population decline augers in terms of economic growth is the stuff of speculation.
With that said, you’re suggestion that the West’s inclination to support immigration provides a solution sounds off base to me.
Boris Johnson made a brilliant decision to invite the disaffected citizens of Hong Kong to settle in the UK. But most immigration to Europe and the United States consists of unskilled and mostly uneducated workers who compete with native American and European unskilled workers. The inevitable result is unemployment for these workers goes up and wages for these workers goes down.
The social unrest this breeds is destroying the entire edifice of liberal democracy that you and the other Cosmopolitan Globalists bemoan.
Again, I think many of the assertions you make here are poorly supported. I don’t want to spend the morning answering them–I made that mistake yesterday and as a result didn’t send out a newsletter!–but one, in particular, seems to me both foundational to your political views, generally, and very much open to debate. The assertion is that immigration inevitably means unemployment and diminished wages for American and European workers. Can you find serious studies of this question to support this view? Because it is by no means obvious that this is true.
It would be true if we viewed the economy in a strictly Malthusian way, that’s to say, we assume there’s a finite pie, with only x number of jobs, and new immigrants necessarily compete for the same jobs. But this is not obviously the case, not even on paper: after all, immigrants also consume, and create, in the destination country, increasing local demand and production, and creating new industries.
It’s a difficult question to study, empirically, because teasing out the chains of causation are tricky. Immigrants often move to receiving countries when labor market conditions are good and improving, so when they find that wages don’t decrease following a wave of immigration, it may mean wages aren’t affected by immigration, or it may be that immigration happens when the the labor market conditions favor both higher wages and more immigration. This is also true of unemployment.
But this caveat aside, the empirical evidence from OECD countries is that the overall effect of immigration is either neutral or slightly positive on average natives’ wages and has no overall impact on natives’ employment. Maybe wages would have been higher and unemployment lower had these immigrants not arrived–per the caveat–but certainly this is not evidence that the result you describe as “inevitable” is anything of the sort. So I don’t think this is the cause of social unrest.
A sentence I wrote above is confusing. By “they,” I meant economists, so it should have read: “so when [economists] find that wages don’t decrease following a wave of immigration, it may mean wages aren’t affected by immigration, or it may be that immigration happens when the the labor market conditions favor both higher wages and more immigration.”
The claim that immigration expands GDP is true but trivial. Increasing a nation’s workforce by any means including abolishing retirement and legalization of child labor would spur an increase in GDP; that doesn’t mean those measures would be a good idea.
What matters are the distributional consequence of unskilled immigration and how these effects differ amongst races and classes.
The US Civil Rights Commission stated “illegal immigration to the United States in recent decades has tended to depress both wages and employment rates for low skilled American citizens a disproportionate number of whom are black men.” (“The Impact of Illegal Immigration on the Wages and Employment of Black Workers” (US Civil Rights Commission, Washington, DC, August, 2010).
Illegal immigration is equally deleterious to Hispanic Americans. A 2017 study by the National Academy of Sciences noted the numerous studies that found “more negative impacts on low educated blacks than low educated whites and even larger negative effects for low educated Hispanics”(“The Economic and Fiscal Consequences of Immigration” Washington, DC, National Academies Press, 2017).
Encouraging massive unskilled immigration is a form of labor arbitrage. It benefits employers in certain industries and is beneficial to elites who love having their lawns cut, their rooves patched, their kitchens retiled, and their elderly parents cared for at the lowest cost possible. For low wage workers, it’s a disaster.
Claire, I think the pessimistic view is the most realistic view when it comes to nuclear power. I’m glad to hear about the intentions of the Wyoming Governor, but how many years do you suppose separate a brand spanking new nuclear plant generating carbon-free energy from the Governor’s expression of interest? If his interest in nuclear generation is fulfilled (a huge if) will it take 10 years, 20 years or longer? Remember, the average time it takes to get approval from the NRC is five years alone.
The average age of American nuclear power plants is close to 40 years old. The last nuclear plant to come online was christened in 2016. The most recent plant to come online before that began operating in 1996.
When in 2012 the NRC approved the construction of two new reactors at a plant in Georgia, it was the first new construction approval in 30 years. Shortly thereafter, the NRC provided construction approval for a South Carolina plant that was subsequently abandoned.
Claire, nuclear plants are closing faster than they’re opening. Construction costs are enormous, the cost to insure against liability is onerous and the regulatory process is littered with land mines. The idea that nuclear energy has a bright future in the United States strains credulity. As far as Europe is concerned we know what’s happening to Germany’s nuclear infrastructure.
Twitter has captured the popular imagination. The social media platform is all the rage. Long before anyone dreamed up the concept of social media, the most popular platforms for the expression of popular culture were television and the movies.
In 1979, Jack Lemmon (of the “Odd Couple” fame) starred in a movie called “The China Syndrome.” I was a recent college graduate at the time and I remember the movie vividly. The movie was a fictional depiction of a core meltdown at a nuclear plant. The movie riveted the attention of an entire generation.
Just a few months later, a star-studded concert with the name “No Nukes” was held at Madison Square Garden; I was there. It featured performers such as Jackson Browne, Bonnie Raitt and Graham Nash. An up and coming superstar, Bruce Springsteen made an appearance.
It was then that the tide turned. Nuclear power was stopped dead in its tracks.
I need more than an aspirational speech by a Wyoming Governor and a few positive comments on Twitter before I will be able to generate any enthusiasm for the idea that nuclear energy has a future.
I suppose it’s true in an abstract sense that making wind and solar power practical as primary power sources can’t be shown to be impossible. But the converse is the case as well and I think we know enough to be extremely skeptical of extravagant claims on behalf of wind and solar. Let us bear in mind that we’re dealing with real-world issues here, not abstract debating points.
Claire, adding storage and transmission are a big part of mitigating the impact of adding renewables to established grids. As grids get ‘smarter’, technologies like V2G (vehicle to grid charging) may also add resilience to the system, but will come at significant cost, as Tesla currently will not guarantee warranty for their vehicles, if engaged in V2G, due to the added stress to the batteries of rapid and frequent charge-discharge cycles. Apparently this will change in 2022, with more durable batteries. Coordinating this technology on the scale needed will be quite a challenge as well, but putting incentives before EV owners to sell into the grid at times of peak demand should help. Several trials have been run in California, with some success apparently. Resistance to increased transmission build-out, which is happening currently in Germany, could be another speed-bump. These problems aren’t insurmountable, they will just take a significant amount of time and money to solve. Hopefully some common sense will prevail, and instead of banning new NG projects in the EU, for example, NG will get the support and official recognition it should, given that countries like Germany and Netherlands have publicly acknowledged the role that NG will play in the overall energy mix for decades to come. The same argument could – and should- be made for nuclear. Pretending otherwise is both dishonest and damaging, to the economy and ultimately, to public trust. I don’t think that unreliable grids are anyone’s wish or design, but I fear that we will get them through sheer – may as well say it – stupidity and incompetence on the part of governments across the western world. The insistence on eliminating fossil fuels and nuclear entirely, instead of using them where needed, and where it is most cost effective, adding renewables where those make sense, and using storage and transmission to move power to where and when it is needed, is reckless, to say the least. Rigid ideology is always blind, no matter which end of the political spectrum it occupies.
Whose human rights is Shell violating, I wonder? The comfortable human rights of those in wealthy, developed, energy-rich western societies? What about the human rights of those in the developing world, those who wait for stable and dependable power, that doesn’t need diesel generators after dark; who wait for good roads, and reliable vehicles to drive on them; for adequate sanitation and housing? Companies like Shell have played a role in providing the energy and materials that make such progress and prosperity possible. Will that now cease, or will Shell be further sued for failing to expedite such a necessary transition – the true ‘energy transition’? When litigation drives corporate policy, and even the possibility of economic success, it is only a matter of time before the clash of competing rights pulls the whole economic house down upon itself. Lots to ponder in this piece Vivek, thanks for writing it!
Thanks Gareth. The points you raise are very valid. Ron Steenblik pointed out to me, while editing my piece, that a ruling like the one from The Hague court would be pernicious indeed. Downstream industries like automobiles could be held equally and potentially liable as well. There would be no end to it, if every industry was sued in court for global warming. What’s important is the ruling opens up a whole battle on the legal and social front. Valid argument or not that’s what’s important to track. This Court’s ruling will most probably be overturned by a higher court but the precedent it sets and the possibilities it opens up are both fascinating and dangerous. If investor activity and the courts create grounds for a well-reasoned and staggered strategy the resolve the problem, it’s well worth it. But if this evolves into a battle with the extreme thinkers on either side, it could be very problematic.
I didn’t go as far as to call it pernicious, but I did observe that there does seem to be unequal treatment between the producers of fuels (oil and gas companies), and downstream industries, particularly automobile manufacturers.
Some of the people cheering this decision point to the The Tobacco Master Settlement Agreement of November 1998 between the largest U.S. tobacco companies (originally, Philip Morris Inc., R. J. Reynolds, Brown & Williamson and Lorillard—collectively, “the majors”) and the attorneys general of 46 states, in which “the companies agreed to curtail or cease certain tobacco marketing practices, as well as to pay, in perpetuity, various annual payments to the states to compensate them for some of the medical costs of caring for persons with smoking-related illnesses.” The original participating manufacturers, in addition, agreed to pay out at least $206 billion over the first 25 years of the agreement.
But note that it was the companies that actually marketed the product directly to consumers who were held liable, not the growers of tobacco itself. The analogous corporate majors in the case of fossil fuels would be the automobile companies. It is they who spend big billions in advertising ever-larger gas-guzzling vehicles directly to consumers, and who are looking to governments for incentives to bribe them to change to retool so they can start producing electric versions of the same types of vehicles.
But we don’t see governments, or even very many environmental groups, pointing fingers at the car manufacturers? Why? I suspect two reasons. First, the endgame in the case of fossil fuels is to phase out their production totally. By contrast, governments and (most) environmental groups don’t see the need for motorized transport disappearing.
The second reason is that the automobile industry employs a lot of unionized labour, often concentrated in politically contested regions, such as the American Midwest and the UK’s Midlands. Much harder and more risky to demonize!
Sorry Ron. Yes, you didn’t say ‘pernicious’. That’s a word that came to my mind while writing the response to Gareth. And I bunged it in. Completely agree with your points.
There is also political question. Energy producing jurisdictions with some limited exceptions tend to be “one party” jurisdictions. So in Canada for example Alberta where Gareth and Owen are from tends to always vote Conservative with some really rare exception(although perhaps this will change sooner than we think). Whereas Ontario which is where most of Canada’s car industry is located(or Quebec where the aerospace industry is) is basically a kaleidoscope of multiple political parties competing for votes. So while the Conservatives in Canada have a “lock” on Alberta in the car-making areas of Ontario everyone including the Conservatives too is competing for power.
A similar situation occurs in Texas, Louisiana, Alaska, and other US energy producing states.
Indeed, it’s what I meant by “politically contested regions, such as the American Midwest and the UK’s Midlands”. I don’t know the regional politics of Ontario that well, which is why I hesitated to mention that Province.
Ronald, you could also argue that in the tobacco settlement retailers of tobacco like supermarkets, convenience stores, billboard owners, media companies, etc, should have been held responsible too but again a political decision was made to exclude them.
Another very technical point is one of the very big car companies the “new” General Motors is actually a fairly young company only being founded in 2010. The “old” General Motors or what we might think of pre-2010 GM is something now called “Motors Liquidation Corp” which is a broke shell company with tens billions of damage awards against it and no assets to pay them. Which is a complex way of saying that the bankruptcy process in the US is very bad for public interest litigation. You do not want the entities you are suing to file Chapter 11 like GM did.
Which now gets to my final point. I could very well see ExxonMobil someday filing for Chapter 11 bankruptcy like GM did. Hell I could see GM filing for bankruptcy AGAIN someday just to shed more creditor claims(including some related to climate change) and the truth matter as unthinkable as GM filing for bankruptcy would have been in say the 1980s and 1990s today I don’t anyone really looks back and says that GM’s bankruptcy was some type of cataclysmic event in the history of American capitalism so I think Exxon will at some point in the next 10 years files Chapter 11 and it will in the whole scheme of things not be that big of a deal in the long run ala GM.
**If the tobacco companies did Chapter 11 it would have been a disaster in my opinion for the state AG’s.
Good points, Tim!
Like so much else, the concept of “human rights” has been corrupted by our postmodern elites. Shell and capitalism in the large can be condemned for human rights violations—but don’t you dare mention the crimes against humanity perpetrated by China, Russia, Iran, etc., etc., etc.!
Who is it, exactly, who’s failing to mention those crimes against humanity? Surely not judges in the Hague: Those courts are the only place the victims of Iran’s crimes, for example, have any hope of securing any measure of justice: (See, for example, the Aban Tribunal: https://abantribunal.com/) Likewise, Georgian victims of Russian aggression: See https://www.icc-cpi.int/georgia.
It is true that shamefully, the ICC refused to investigate charges that China has committed genocide and crimes against humanity against the Uighurs, on the grounds the court has no jurisdiction in China. But they’re keeping the file open, and I am, sadly, confident that one day the case will be heard in the Hague.
Did you mean the Hague? Or is this some imaginary postmodern elite?
Well, Claire, I mean the elites—and their name is Legion, for they are many—who think that saying the right thing equates to doing the right thing. It’s nice to know that some day, the case of the Uighurs will be heard in the Hague—but in the meantime countless lives will be destroyed, and there can never be any justice for them.
I admit that China‘s crimes against humanity present a difficult case. A superpower is not easily chastised. But what about Iran? Venezuela? Myanmar? What presents our transnational elites from chastising them? Is the ICC the best that the so-called world community can do? Apparently so.
I count myself a realist. As much as I cherish the ideals on which America is based, I recognize that they can’t easily be exported. I’ve also come to know that what we have here in this country is a fragile construct. It was pieced together with great difficulty, overcoming tremendous obstacles, but it can all too easily be deconstructed.
I’m opposed to that deconstruction—which is the project of the postmodern progressive elites whom I revile.
Are you defining “the elites” as “people who think that saying the right thing equates to doing the right thing?” Or do you have an independent definition of “the elites?” In my experience, the category of people who think saying the right thing equates to doing the right thing is not identical with any particular socioeconomic bracket. But to rail against a nebulous cohort of “elites” and portraying them as immoral compared to the good “real people”–is the essence of populism, right- and left-wing.
As for chastising Iran, Venezuela, and Myanmar, which elites, precisely, do you mean? If you mean the US government, we’ve done quite a bit more than chastise these countries. Could you be more specific about who you’re condemning?
Well Claire, I have specific groups in mind: the liberal/progressive political/bureaucratic class, the journalist class, the cultural elites of entertainment, social media, education. Nothing nebulous there.
Let’s pick some low-hanging fruit by way of illustration: the journalist class. Our mainstream media’s coverage of the pandemic now ending was nothing short of scandalous. Example 1: Journalists fecklessly anointed Governor Andrew Cuomo of New York as the pandemic’s great hero, when in fact his egregious errors of judgment condemned thousands of elderly New Yorkers to death, which negligence and stupidity he then tried to cover up. Example 2: Journalists valorized phony COVID whistleblower Rebekah Jones, a minor bureaucrat who, posing as a medical expert, claimed that she’d been ordered to falsify pandemic statistics being put out by the Florida Department of Health. They continued to pursue the story long after it became clear that Jones is a liar. (Incidentally, she’s just been suspended from Twitter, which tells you how big a lair she is.) Conclusion: Journalists were promoting a narrative—Blue States Good, Red States Bad—because they hated Trump and Republicans in general. Then there’s Example 3: Journalists unquestioningly embraced the proposition that the lab-leak explanation for the pandemic was a “right-wing conspiracy,” xenophobia” and “racism”—this despite the fact that the circumstantial evidence for it was strong from the beginning. But what can you expect, really, from a so-called profession that tolerates in its ranks the likes of Don Lemon and Chris Cuomo (brother of Andrew and his media lapdog) of CNN and Taylor Lorenz of the New York Times?
In the field of education, we saw teachers unions with the mask off, so to speak, it becoming crystal clear that in the order of priorities of the public education establishment, children and their families are at the bottom of the list. In higher education, we’ve just learned of a lecture delivered by one Dr. Aruna Khilanani, a forensic psychiatrist and psychologist, under the auspices of the university’s Department of Child Study, to “trainees in child psychiatry, psychology and social work, faculty, clinicians and scientists.” The lecture fulfilled Connecticut’s relevant licensure requirements. Its title: The Psychopathic Problem of the White Mind.” I’ll just provide a couple of excerpts from Dr. Khilanani’s lecture.
“This is the cost of talking to white people at all. The cost of your own life, as they suck you dry. There are no good apples out there. White people make my blood boil.”
“I had fantasies of unloading a revolver into the head of any white person that got in my way, burying their body, and wiping my bloody hands as I walked away relatively guiltless with a bounce in my step. Like I did the world a fucking favor.”
There was much more in this vein—from a practicing psychiatrist, mind you, sponsored by a major American university. And as we all know, this kind of talk has become fairly common among progressives, particularly in the field of education, though not just there. It’s the mind-set underlying the NYT’s “1619 Project.”
I could multiply such examples many times, on a wide range of issues. The point here is that populism doesn’t appear out of thin air. It’s a response to a real-world situation, to real-world grievances. Now, I would agree with you that it’s the wrong response. Trumpian populism is in most respects a toxic phenomenon—due mainly, I should say, to the personality of the man himself. But it arose because there’s a project afoot to change America by rewriting its history, dividing its people into mutually hostile tribes, imposing absurd doctrines like “equity” and gender ideology—even mutilating the English language along the lines of Orwell’s Newspeak. All this is to be accomplished by fraud, intimidation and force, albeit in the name of “democracy.” And the project is being pursued by the groups—the elites in their areas—whom I listed at the beginning of this polemic.
“The risks of emitting carbon are real, even if we are unsure how significant these risks are. This means polluters must be forced to bear the cost of their emissions, whether or not by regressive means.”
The author appears to be assuming that the risk won’t turn out to be so small that there is no measurable cost 80 or 100 years from now. That assumption could easily be wrong.
How does the author determine the future cost when the possible range of costs is from a lot to near zero?
How does anyone know what to charge?
How can any industry be forced to pay now for future costs that may or may not occur?
Most of the evidence in the article is speculation about what might happen in future worst case scenarios. There is no evidence that any of these scenarios are likely, except in the virtual worlds of computer models.
We don’t live in a virtual world. Making policy decisions with far reaching impacts without solid evidence is irresponsible.
It seems unlikely, based on the best evidence we have, that in the event of zero mitigation there would be no measurable cost 80-100 years from now. The extent of the cost is uncertain, but that doesn’t mean it’s rational to say, “We assume there will be no cost.” It isn’t rational to assume the outlier scenarios are the most probable scenarios.
This doesn’t obviate your point, however, that since we don’t know precisely what the costs will be, it’s very difficult to figure out what to charge.
But I’m not sure what “evidence in the article” you’re referring to: Vivek did not cite any speculation about future worst case scenarios. Do you mean another article? Which one?
I don’t assume there won’t be a cost. Just that we don’t know if it will be large enough in 80 years to warrant drastic action now.
My point is that making drastic short term policy decisions based on assumptions and speculation about what might happen 80 years from now is folly. If the assumptions we make are incorrect, the policy decisions could easily do more harm than good. And the harm will mostly affect the poor in the next few decades.
“Evidence” may have been a bad choice of words. My point was there is no evidence in the article, only speculation and assumptions and arguments based on them. The article appears to advocate government action based on those speculations and assumptions, which could all easily be wrong.
If we stay on our present economic course, it is not unlikely that the average poor person in 80 years will have a higher standard of living than the average poor person today.
Why sacrifice, without compelling evidence, the wellbeing of the poor today with policies that may or may not benefit people 80 years from now?
Humans don’t have enough knowledge to be certain about anything 80 years away.
We should quit pretending we do.
I favor policies that improve the lives of the poor in the near term.