Investors overseeing $14T call for vote on company climate plans
reuters.com
reuters.com
https://www.iigcc.org/download/investor-position-statement-v...
https://finance.yahoo.com/news/blackrock-leading-120-trillio...
The real solution is to implement carbon taxation globally via trade blocs/agreements and then suddenly the incentives are structured in a way that might actually accomplish something.
No amount of divesting is going to accomplish anything. It just makes profitable oil companies a more attractive buy.
Which then begs the question… why is this news? Large funds selling unprofitable companies isn’t usually newsworthy outside of finance papers.
The fact that we’re reading about it at all almost implies it’s nothing but virtue signalling.
Are you certain? In a world of high P/E ratios across the board, profitability is achieved more via appreciation than via dividends. People (e.g. myself) shy away from investing in falling assets, even if their dividend yields are 1% higher than that of the stable or rising asset. Maybe those looking at a 15 year time horizon will see the value and buy despite this, but many people today see it as foolish to try to predict — and therefore invest solely for — 15 years into the future. It’s one of the reasons you don’t see as much short selling as would be maximally profitable in bubbles, for example (eating a couple years of loss and hanging on until the windfall is tough — not just psychologically, but also to your investors who expect consistent returns).
I’ve seen arguments both ways though. Perhaps what’s needed at this point is a study, or something with a more formal treatment of the numbers. But without those I don’t think your view should be taken as conclusive.
I dunno, some might consider long term survival of the species more important.
We aren’t all willing to pay the same price for certain things, but we all know that we can get more of what we value by getting more money.
Fighting against this is like trying to swim up a waterfall.
This is why carbon taxation or cap and trade style policy is the the only scalable non-technical solution.
And if you don't like the "soft" counter argument above then externalized costs also nibble away at an understanding that money represents the value we ascribe to costs.
I do think that carbon taxation is probably the best resolution to pursue - bringing all those long ignored factors into the actual costs of goods forces the market to respond them - however other approaches to speed this process along (and bridge areas of the world where taxation is politically difficult) seems wise as well.
People try to buy love all the time, and if they could purchase the real thing they would likely pay a lot for it. Just because something isn’t for sale doesn’t mean it’s value can’t be compared relative to other things.
How much would you personally be willing to pay to limit the warming of the Earth to 1.5C?
Nearly all of my money, if I thought it would actually work, but that's not even half a million canadian. If Jeff Bezos felt the same as me, he could effect significantly more change than I could. Money doesn't represent what "people" value, it represents what the very richest people value.
[1] https://www.iigcc.org/download/investor-position-statement-v...
The whole idea that people will divest from profitable industries is foolish. Some will virtue signal and cash in, some will divest, and where there is money to be made, others will profit. The demand for oil will be satisfied regardless.
The real solution is to capture the externalized costs properly with a global carbon tax enforced via trade agreements and let the market sort it out.
As you say though, the problem with this logic is that divesting does not change the demand for oil. By definition, anyone who divests cares about the issue. Which begs the question: if these companies are divesting then who are they selling to?
Unfortunately, there is not a lot of careful thought going on here. Fund managers have been invaded, somehow, by people who believe that corporations are responsible for polluting...and if we somehow just punish/shame them enough, then pollution will stop (and I would say this is driven almost entirely by the psychology of individual managers and how they want other people to perceive them). This is not the case. And there is a real risk of things going very, very wrong.
Btw, I don't think the question of virtue signalling is very relevant either. Societies operate through shame. Whether that is shaming someone for being a homosexual or shaming them for polluting. It is effective, and it is a huge incentive (bigger than profit). But the point is not to get confused between the joy that humans get from shaming others/elevating themselves, and actual progress. Climate change is the issue, demand for oil is the cause.
On this issue specifically though, I would say that it makes no sense to engage with oil companies. They aren't big polluters (even companies with large downstream chemical operations aren't particularly big polluters, not zero but not huge either). I understand why investors aren't engaging with China or Iran but one of the biggest coal-fired power plants in the world is owned by a publicly-listed Polish company. South Korea, India, Germany, Indonesia, even Russia...very little engagement. What about airlines? Fund managers, and the executives that are ferried in for meetings, are voracious users of intercontinental air travel...nothing? What about the pollution in electric battery production? What about US coal miners? It just seems, so far, that fund managers are going straight for the least important part of the system. I believe that investors should engage with these issues but there is relatively little careful thought (there are exceptions, Chris Hohn is one).
1816 was The Year Without A Summer. At the time people in Europe didn't know why it didn't heat up that summer, but it was a catastrophe for humans who lived in the northern hemisphere, in every sense of the word.
Catastrophe: an event causing great and often sudden damage or suffering; a disaster. "a national economic catastrophe"
> The year 1816 is known as the Year Without a Summer because of severe climate abnormalities that caused average global temperatures to decrease by 0.4–0.7 °C (0.7–1 °F).[1] Summer temperatures in Europe were the coldest on record between the years of 1766–2000.[2] This resulted in major food shortages across the Northern Hemisphere.[3] > > Evidence suggests that the anomaly was predominantly a volcanic winter event caused by the massive 1815 eruption of Mount Tambora in April in the Dutch East Indies (known today as Indonesia). This eruption was the largest in at least 1,300 years (after the hypothesized eruption causing the extreme weather events of 535–536), and perhaps exacerbated by the 1814 eruption of Mayon in the Philippines.
- https://en.wikipedia.org/wiki/Year_Without_a_Summer
1816 Summer in France was 3 degrees celcius cooler than average: https://en.wikipedia.org/wiki/Year_Without_a_Summer#/media/F...
How do you prepare for both a certain "volcanic winter"-type events (losing growing seasons in the northern latitudes) and the possibility of anthropogenic climate change?
How many people would die if we had two volcanoes go off, in 2022 and 2023, like what happened in 1814 and 1815?
Volcanic Winter: https://en.wikipedia.org/wiki/Volcanic_winter
My understanding is the 1814 and 1815 volcanic eruptions reduced the amount of heat absorbed by the oceans [0]. By 1816 the oceans were super-chilly, and didn't have enough heat to give off for Europe to have a normal summer.
https://news.ycombinator.com/item?id=20013166
Climate is variable. Deal with it. Volcanoes are much more of a threat to humans than slow moving disasters.
for one, volcanic induced winters don't seem to have the long-term ability to change the climate trajectory.
The other is that the existence of additional risks does not absolve us of the responsibility to plan for the eventuality of climate change. there are billions of people on the planet and we as a species do have the capacity to think about and plan for both kinds of risk.
Like we did for the past few hundred years - fill up a grain elevator. You store 2 years worth of grain, you get through any such event.
https://en.wikipedia.org/wiki/Grain_elevator
Also we have greenhouses.
I expect a lot lower than when yearly famines were a frequent occurrence.
Recycling everything is unlikely to do much to avert climate change, and could even make it worse if recycling is more energy intensive, but almost every day I see a discussion on climate and many “well, I recycle what I can” comments. Is there a common perception that recycling is a solution to the climate crisis or is it just that people feel it’s the only loosely-related option they have?
I’m not saying recycling isn’t important — it is — but it’s much less important than our rapidly collapsing climate.
So yes, you won't take them seriously, and they'll just not care. There's a sort of symmetry, with the exception that they're doing the other thing to some effect and you are not.