I’m More Worried About Helena Morrissey Than Climate Change
By Paul Homewood
Another long and rambling piece in the Telegraph from Helena Morrissey , who usually spends most of her time complaining about gender gaps. This time, however, she offers up her expertise on climate change, repeating the same nonsense which Mark Carney came up with a couple of weeks ago.
Bank of England Governor Mark Carney’s recent speech to the insurance industry on climate change sharply divided opinion – a clue perhaps as to its importance.
Central bank governors generally give rather conventional speeches on monetary policy, financial risks, the economy and markets – so why the focus on climate change, a topic more typically associated with the green lobby?
The Governor linked climate change with risks to financial stability and, since he was speaking at insurance broker Lloyd’s of London, specifically to the increasing risks borne by the insurance industry. As he put it, while others have been debating the theory of climate change, insurers have been dealing with the reality.
Since the 1980s, the number of weather-related loss events has tripled, and the value of these losses has increased from about $10bn (£6.5bn) to $50bn each year over the past decade.
There are many financial risks associated with climate change – and investors are significantly exposed. The numbers are stark: known fossil fuel reserves of energy and mining companies around the world total over 1,500 gigatonnes of carbon. Yet only 225 gigatonnes can be emitted between now and 2050 if we are to have an 80pc chance of meeting the global goal of restricting temperature rises to two degrees above pre-industrial levels.
This gives rise to the very obvious risks of “stranded” assets that simply cannot be used for economic benefit.
To give a sense of the scale of the financial risks, 19pc of FTSE 100 companies are in natural resource and extraction sectors, with a further 11pc by value in power utilities, chemicals, construction and industrial goods sectors. The pattern is similar across the globe: these two groups account for around a third of both equity and fixed income assets worldwide.
It’s not all bad news, of course. If the analysis of climate change risks is correct, there will be significant investment opportunities in clean energy and associated companies – the Volkswagen debacle is expected to accelerate the adoption of hybrid and ultimately full electric cars, for example.
So why the controversy over the Governor’s speech? Much debate rages over the timing of the financial risks. Many argue that the worries are premature.
Mark Carney was careful to address this, although his words were not to everyone’s taste. He described the mismatch between low immediate risks and the apparent inevitability of eventful catastrophe as “the tragedy of the horizon”. The really problematic impacts of climate change are likely to impose a cost on future generations that the current generation has no direct incentive to fix.
I think this speech and its warnings are both insightful and a motif for the difficulties in coming to terms with the multiple transformations of our time.
It is really rather scary that someone in charge of savers’ funds has such a poor understanding of the financial issues involved here.
Let’s start with her comments about insurance.
Since the 1980s, the number of weather-related loss events has tripled, and the value of these losses has increased from about $10bn (£6.5bn) to $50bn each year over the past decade.
Is she not aware that the increase in weather related losses in recent decades has absolutely nothing to do with climate, and everything to do with economic and population growth, along with migration and urbanisation? Does not she know that as people get richer, they start insuring things – it is called insurance penetration. Perhaps she needs to read the latest Red Cross report on the matter.
Perhaps she is not aware that Lloyd’s of London continues to make large profits, clocking up £3.2bn last year, its best since 2009, on the back of “a drop in catastrophes”. If she did not know, I would advise her to read the Telegraph. Or that, according to their accounts, the biggest pressure on their profitability is downward pressure on premiums in an intensely competitive environment. Hardly the sort of thing you would expect if weather losses were rapidly increasing.
I do not expect her to know that there has been no increase in tropical cyclone activity since the 1970’s, or that US tornadoes have been close to record lows in the last four years. But I would expect her to know something about the insurance industry.
Then, of course, she repeats Carney’s nonsense about stranded assets.
Surely she knows that renewables only supply 2% of global energy. Or that energy demand from the rapidly growing economies in Asia and Africa will increase in leaps and bounds in years to come, an increase that in large part cannot come from anywhere other than fossil fuels.
Does she seriously think that the world’s economy can function normally without fossil fuels?
Surely, as an investment fund manager, she must know that China has been busy spending $73 billion in the last three years buying up oil and gas assets around the world. They now operate in as many as 40 countries around the world, and control 7% of global crude output. According to the IEA, this has raised alarms in some quarters about supply security and price.
Even if the apocalyptic climate models are correct, there is absolutely no way that China, India or the rest of the developing world will sign up in Paris to cut their emissions. Indeed, I am surprised one of her army of highly paid analysts has not told her that India’s climate plan, recently submitted, involves a tripling of emissions by 2030.
The real threat to investors is not some imaginary problem with the climate. It is instead the damage being done to western economies by blind, slavish obeisance to the religion of climate change.
Only today, the Telegraph report that another chunk of Britain’s steel industry may go to the wall, partly because of high energy costs.
It is highly irresponsible of people like Ms Newton to accept this sacrifice of western industry on the altar of global warming.
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
“Is she not aware that the increase in weather related losses in recent decades has absolutely nothing to do with climate, and everything to do with economic and population growth, along with migration and urbanisation?”
She’s not stooopid, so she is corrupt. Perhaps not as bohemian as taking bribes, but let’s start with intellectually corrupt. If she’s not personally embarrassed by being intellectually corrupt, take a full page ad out in the newspaper and embarrass her.
Reblogged this on Wolsten and commented:
As Paul Homewood says “I do not expect her to know that there has been no increase in tropical cyclone activity since the 1970’s, or that US tornadoes have been close to record lows in the last four years. But I would expect her to know something about the insurance industry.”
Quite.
There is an annual report on the statistics from Aon, the biggest players in the game:
‘2014 Annual Global Climate and Catastrophe Report’ which notes that:
“Global natural disasters in 2014 combined to cause economic losses of USD132 billion, 37 percent below the ten-year average of USD211 billion. The losses were attributed to 258 separate events, compared to the ten-year average of 260. The disasters caused insured losses of USD39 billion, 38 percent below the ten-year average of USD63 billion and was the lowest insured loss total since 2009. This was the second consecutive year with below normal catastrophe losses… Despite 75 percent of catastrophe losses occurring outside of the United States, it still accounted for 53 percent of global insured losses, driven by a higher insurance penetration.”
Thanks BB
You can add not only intellectually corrupt to that full page add, but professionally incompetent since she obviously either isn’t aware of her own top tier industry research or intentionally obfuscates it.
Quite tawdry.
Here’s another example of what we are up against.
http://nofrakkingconsensus.com/2015/10/18/the-preposterous-green-institute-and-the-ipcc/
AB
Excellent reading.
Excellent webpage.
Spill your excellence over the border and dig into the incestuous nature of your neighbor’s ngos and their government.
Paul when the global warming meme was but a tiny thought in the minds of a few they looked at key phases and words to get the message across. Two of those phrases were “fossil fuels” and “Peak oil”. What they have sort to do is reinforce a theory that we are using up a finite resource that is almost gone as a fact, just as they have sort to associate CO2 as an agent (the main agent at that) that plays a part in warming the earth, and in the case of Obama he calls it “Carbon pollution”, a ridiculous assertion if ever there was one. In both cases they are wrong. Whilst many like yourself have done wonders brings to the attention of everyone the fact that the data does not support any of the assertions, I have concentrated (just for myself) on looking into the mechanisms of what these alarmists assert. I have looked to peel back the gobbledegook science and get back to some sort of rational thinking. There are many out there far better qualified than myself who feel exactly the same, and are starting to write about it. It often makes for a very dry read so they tend not to attract a wide audience.
Why I bring this up is there is no such thing as a fossil fuel. Anyone that tries to explain away all the anomalies just around were we find all the various forms of coal, let alone oil and gas, gets tired up in knots. Coal, oil and natural gas are all forms of hydrocarbons, but with differing levels of Carbon, and often very different structures for their carbon chains. It becomes increasingly obvious that these compounds are not from dead animals plants and fish, albeit wood may be an ingredient in coal, it is highly unlikely that wood turns to coal of its own volition just by being buried and compressed. A more likely scenario is the wood becomes infused with methane or light oils. Fossilised wood does not burn and is often found within coal seams of a certain type. Some brown coal deposits have been found on top of manmade structures attributed to the Romans. This takes some explaining, as does much of the historical time line if truth be told.
In your articles I believe you should start to use “hydrocarbon fuels” rather than “fossil fuels” to disassociate from the notions these are finite in the way being portrayed. It is true that everything is finite, but our hydrocarbon resources are only finite in so much as we can support the cost of recovery.
Some commentators, who are for want of a better term “sceptics” of alarmism, still don’t grasp why the alarmists are wrong. They consider that the science is basically right but that alarmists are just exaggerating. I believe that the science is fundamentally wrong (and I could be wrong and accept I could be wrong) and that we need to get back to basics to progress in science. Whilst our technology has progressed our understanding has stagnated and disappeared into a world of make-believe backed by unreal mathematics. Ironically it is this technological progress that allows us to measure things more accurately that is undermining much of what we are being brainwashed with.
This is why I think we need to change key words and phrases so that the message we are all trying to get across is not sullied by the past. Just a rambling though.