Weekly clippings #17 - flooding, antarctic, value investing, worthless credits, ESG, EV subsidies

 This week in Science I’ve touched on the recent flood in Libya and linked to two articles about Antarctic ice changes that clash with the alarmist narrative currently dominating pop culture.

For Investment/Economics, the first article is a remarkable synthesis of scientific knowledge and investment wisdom that I would have loved to write myself. If you read nothing else from today’s clippings, read this one. I’m including our friend Paul Musson on this week’s list because I know how he emphasizes the importance of independent thinking on investment and economic questions.

In the Absurdity category I’ve circled back to electric vehicles to highlight how immense subsidies forced onto the backs of taxpayers will result in a rise in CO2 emissions. As is usually the case, adopting irrational ideas is very expensive in all ways.

Trends in Flooding in Africa  With the recent deadly flood in Libya, the media has, of course, instantly attributed it to man-made climate change. The IPCC says: On a continental scale, a decrease seems to dominate in Africa (Tremblay et al. 2020). Neither detection nor attribution of changes in flooding has been achieved.

Antarctic ice shelves experienced only minor changes in surface melt since 1980 The results show Antarctic ice shelves overall have seen only minor changes in surface melt rates over the past 40 years, and the modeling results even show a small but significant decrease in melt rates during the study period.

Antarctic ice shelves gained 661 Gt of ice mass over the past decade, whereas the steady-state approach would estimate substantial ice loss over the same period, demonstrating the importance of using time-variable calving flux observations to measure change. 

Why value investors should doubt “climate science” The implications are huge: the “energy transition,” “Net Zero” and all the rest are immensely destructive, ruinously expensive and thus colossally wasteful irrelevancies that enrich an anointed few but impoverish the benighted many. They therefore provide rotten foundations for trillions of dollars of actual and envisaged investments. As the unsound basis of “climate science” becomes more obvious, these investments will disappoint – or worse.

Carbon-credit traders find their CO2 offsets may be worth nothing  Since the first carbon credit was traded roughly 35 years ago, the market has been hit by a steady stream of scandals that have led to wild price swings and even collapsing valuations. What could possibly go wrong when you are paying for potentially imaginary assets?

How Investors Feel About ESG Initiatives  Fund managers need to acknowledge that there is likely to be some trade-off between ESG and financial returns, and that trade-off may matter to individual investors. Notably, younger investors are the biggest ESG supporters but also have wildly unrealistically high long term return expectations (16%), so their judgment is suspect.

A Progressive’s Case for Getting Rid of ‘ESG’  The ESG movement had its time and place. It usefully drew companies’ and investors’ attention to the fact that nonfinancial factors can be financially material. But we’ve now known this for decades and its time is past. Just as painting by numbers is useful for a child learning to paint but limiting thereafter, the current ESG-by-numbers approach has long outlived its purpose.

 

In keeping with the old joke about losing money on every sale but making it up on volume, the latest Canadian government subsidy to that dynamo of innovation the Ford Motor Company to make products no one wants means the total from Ottawa for EV components has reached $32 billion. Which Blacklock’s Reporter notes is “twice the annual output of the entire Canadian auto sector.” Industry Minister François-Philippe Communism gushed that “It’s pretty remarkable what we have achieved in just a few months.”

Electric Vehicles Emit More CO2, Not Less  A transition to efficient ICE vehicles would yield higher CO2 emissions savings than a transition to EVs. As the energy density of batteries remains low, about 100 times lower than for fossil fuels, and the batteries require considerable mineral, energy and other resources for their manufacturing, at the current technological level, EVs remain incapable of competing with quality high efficiency ICE vehicles, including diesel cars and hybrids.