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Bank Of England Banging The Climate Change Drum Again!

April 16, 2019

By Paul Homewood

 

 

The Bank of England must be fed up with Brexit!

 

 

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https://www.telegraph.co.uk/business/2019/04/15/climate-change-could-wipe-20-trillion-assets-bank-england-warns/

 

 

Sarah Breeden, the Bank’s Executive Director, International Banks Supervision has just given a speech warning us that the world’s economy will collapse if institutions and companies fail to prepare now for climate change.

She identifies two areas of risk:

1) Physical risks arise from damage to property, land and infrastructure from catastrophic weather-related events and broader climate trends such as heatwaves, hurricanes, droughts, floods and rising sea levels.

2) Transition risks arise from changes in climate policy, technology and market sentiment as we adjust to a lower-carbon economy. The need to transition is widespread, affecting not only energy companies but also transportation, infrastructure, agriculture, real estate to name just a few. The implied change in energy costs from the transition will have a significant effect on many businesses. And so banks that have provided loans to those companies and investors that own their securities may find themselves with unexpected losses.

https://www.bankofengland.co.uk/speech/2019/sarah-breeden-omfif

 

The first one, as we know, is pure bunkum. There is no evidence that extreme weather has got worse, or will do in future.

In fact, the cost of weather related insurance has losses has been falling as a proportion of global GDP:

image_thumb33_thumb_thumb_thumb_thumb

https://twitter.com/RogerPielkeJr/status/684740869707071488

 

 

And although Lloyd’s profits have taken a hit in the last two years, they are still showing a healthy profit in the long run:

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https://en.wikipedia.org/wiki/Lloyd%27s_of_London#Recent_results

 

 

As for transition risks, the obvious exposure is for oil companies and talk of stranded assets.

However, Ms Breeden seems to be missing one very basic fact. The market valuation of any company depends largely on projections of discounted income in the near to medium term, and not the asset values currently shown on the balance sheet.

Royal Dutch Shell, for instance, currently offer a return of 5.8%, a much higher rate than any “safe” investment. Whether Shell is still solvent in 30 years time is not relevant to today’s investors, who clearly know more about the value of investment’s than she does.

In any event, the official BEIS projections forecast that the price of oil will continue to steadily rise up to 2035. This is hardly consistent with a market which has turned its back on fossil fuels.

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https://www.gov.uk/government/publications/fossil-fuel-price-assumptions-2018

Significantly though, she does talk about the risk from higher energy costs on the economy as a whole – a significant effect on many businesses she says.

Perhaps she should be complaining about this to the government!

According to her, climate change also presents vast opportunities:

My natural focus as a central banker is on the risks. But let me spend a brief moment on the opportunities.
The investment needs to finance this transition are significant – an estimated $90tn (almost five times US GDP) by 2030. This presents substantial opportunities for the financial sector to develop new products and services to mainstream green finance

https://www.bankofengland.co.uk/speech/2019/sarah-breeden-omfif

Back in the real world, normal people would not call this an “opportunity”, but a “cost”.

$90tn to finance the transition in the next decade alone is clearly unaffordable in any sense of the word, and it is a pity that central bankers are not leaping up and down, warning us about the very real risks to the global economy that this obsession with climate change is bringing about.

But, of course, all she really cares about are the nice, fat profits that banks can make out of the green finance scam.

23 Comments
  1. Mack permalink
    April 16, 2019 7:31 pm

    So, ‘climate change’ could wipe out $29 trillion in investors’ assets if the Ouija forecasts are proved correct and they do nothing to ‘transition to a state of grace, but will cost them $90 trillion to transit to such a state in a future world run on pixie dust and unicorn farts. Em, pass the abacus please. Think, I’d stick to what they know pays a guaranteed return if I were them, namely fossil fuels. Of course, if you’re a fully paid up member of the Green scamster collective, the transition to fairyland can prove very lucrative, until that day when the whole edifice comes crashing down. As it surely will.They’ll still be pumping oil out of the ground when school children of the future are taken on trips to visit the rusting hulks of useless.windmills left standing as a testament to the insanity of mankind in the late 20th/early 21st centuries.

    • Robert Jones permalink
      April 16, 2019 8:35 pm

      You got it!

  2. April 16, 2019 7:32 pm

    It is definitely climate change week. The propaganda is everywhere (even Farming Today is covering it every day this week). Does anybody know why the propaganda has been ramped up? Is it all to do with Attenborough’s latest propaganda film?

    • April 16, 2019 7:44 pm

      Maybe cherchez la EU femme, as in everything is now done at the behest of the EU, but of course the UK deep state doesn’t want anybody to know about it. Avoiding fines and “meeting targets” explains a lot of what goes on, such as the sickening “smart meter” radio ads featuring brainwashed children.

    • Gerry, England permalink
      April 17, 2019 1:49 pm

      I can’t help but think they are getting scared that their scam might be coming to an end and want to get as much damage done while they can. As The Great Donald moves closer to having his Presidential Science Committee in action, they fear the outcome of the review of climate science by some of the pre-eminent people in their fields.

  3. Thomas permalink
    April 16, 2019 8:22 pm

    Are not a lot of people just shouting in an empty room or are people like Sarah Breedon , D. Attenborough et al being made aware of the facts — by you or others you know?

    • Gerry, England permalink
      April 17, 2019 1:54 pm

      It would probably be a pointless operation as they either wish to remain willfully ignorant or are in broadcast mode so not open to receiving information. There is also the issue of ‘prestige’. Without it they won’t listen to you or the facts. Exactly the same with Brexit. In three years MPs, the media, think tanks and many so called ‘experts’ have learnt nothing about have the EU works and how our relationship with it functions. But you can’t tell them anything if you are not in their bubble world.

  4. MrGrimNasty permalink
    April 16, 2019 8:50 pm

    TOTAL oil and gas co. has pledged 100 million euro to help rebuild Notre-Dame.

    Obviously Catholics and the Pope will be protesting against this and all climate change believers will be boycotting Paris in the future. Or maybe not.

  5. HotScot permalink
    April 16, 2019 9:21 pm

    Climate change could wipe out $20 trillion of assets, Bank of England warns

  6. HotScot permalink
    April 16, 2019 9:25 pm

    “Climate change could wipe out $20 trillion of assets, Bank of England warns”

    Is that collectively or individually?

    If it’s individually, so effing what? I barely have £20 to rub together at the end of the month, will $20 trillion make any difference to me?

    If it’s collectively, then an apple that cost a universal dollar will cost a universal cent, and wages will drop from a universal dollar to a universal cent. So the frigging apple still costs the same!

    This is just political and financial chicanery, Project Fear on stilts!

  7. John F. Hultquist permalink
    April 16, 2019 10:49 pm

    Sarah Breeden {SB} is full of __ __ {BS}.

  8. I_am_not_a_robot permalink
    April 16, 2019 11:37 pm

    The losses due to “heatwaves, hurricanes, droughts floods and rising sea levels” appear to be based on ‘a 4 degree world by 2050’ and the footnote refers to a closed report by ClimateWise.
    Why stop at 4, 8 degrees would be as plausible.
    ClimateWise is ‘a global network of leading insurers, reinsurers, brokers and industry service providers’ who apparently follow the Anglo-Bengalee Disinterested Loan and Life Assurance Company philosophy of finance viz. think of a number and add ‘as many noughts after it as the printer can get into the same line — ha, ha!’.

  9. April 17, 2019 12:31 am

    We all know this is bunkum but how do we persuade the Bank of England and all the rest?

    • April 17, 2019 8:30 am

      We don’t. We’re supposed to just stop arguing and hand over our wallets :/

  10. M E permalink
    April 17, 2019 1:46 am

    Banks in New Zealand also seem to want to curb sites on the internet which do not have the approved viewpoint. The excuse is anti -terrorism and therefore they want internet providers to determine what the viewpoints of posts to blogs and Facebook are before they can be displayed.

  11. JimW permalink
    April 17, 2019 8:04 am

    This the hub of the problem. $90trillion. The world has a savings glut. The money created to save the banks after 2008 has to go somewhere. New opportunities have to be created. Climate change is ramped up to create the risk free opportunity. Governments ( ie taxpayers) will back stop the risk while investors make risk returns from stuff that may be useless but is ‘necessary’ to meet targets set by the Governments. The global elite make millions, the poor suckers ( taxpayers) pay for it. Wealth transfer on a massive scale, while the ‘useful idiots’ think they are helping the advance of socialism etc ( in a way they are, by making everyone poor).

    • Derek Buxton permalink
      April 18, 2019 10:43 am

      But then Fraud raises its ugly head, because all this boils down to a Global Fraud by the UNCCC. And all our governments just buy it for the gifts it brings them, with jusy one exception The Savior of the USA.

  12. April 17, 2019 9:16 am

    Sarah Breeden is a Cambridge academic: “Since graduating in economics from Newnham [College] over 25 years ago, I have been happily ensconced in The Bank of England…”

    A lady happily devoid of any business experience or even a modicum of commonsense, it appears. She lectures happily on BOE policy on climate change, a subject she plainly knows zero about. Happily advising of the opportunities for spending $90 Trn to save assets of $20 Trn?

    Sometimes I don’t know whether to shake my head in despair or bust out laughing at the insanities we are surrounded by.

    John Doran.

    • JimW permalink
      April 17, 2019 10:45 am

      John, its not insanity if you are one of the very rich disrupters. The $20trn is sunk costs, it matters little if it has no value if you are one of those making risk free returns on the $90trn backed by the tax payers of the western world. Good heavens man its only right that one should look to best make a bob or two on all those billions I have knocking around.

      • April 18, 2019 7:40 am

        @JimW,

        I’d need accountancy training to see that, Jim, I suppose.

        Climatologist Dr. Tim Ball identifies big money as the main driver of the CAGW/CC fraud. Bravely he names the Bankster Rockefellers & multi-billionaire cronies, Soros, Ted Turner, Maurice Strong etc etc.
        He names also the bent politicians & “scientists”
        All the science & scandals, all the politics & profiteers.
        Only 121 pages, a must read:
        Human Caused Global Warming The Biggest Deception In History.
        http://www.drtimball.ca

        JD.

  13. Kes Heffer permalink
    April 17, 2019 11:54 am

    Ms Breeden’s Canute-like toil in “…enhancing the financial system’s resilience to climate change.” (https://www.bankofengland.co.uk/about/people/sarah-breeden/biography) might well be guided by genuine credo, but it also cannot but help ingratiate her with her Governor, Mark Carney, apparently of similar persuasion. He, in turn, may not be completely immune to influence from his wife Diana Fox Carney, whose “edgy” views on, inter alia, the environment lead her to happily declare “Having more stuff does not make us happy.”; she doubtless wrestles with the enormous handicap of the £624,000 pa. that her husband apparently earns; that on top of a £250,000 pa housing allowance which contributes towards the rent for their £3 million home – complete with 5 bathrooms (happily devoid of “stuff” we hope). The Guardian, not atypically, found her opinions “refreshing” (https://www.theguardian.com/business/shortcuts/2012/nov/27/diana-fox-carney-bank-governors-wife).
    I do not subscribe to the politics of envy, but do wish that the opinions and speculative predictions of these luminaries were not such an important influence on the rest of the nation.

  14. George Lawson permalink
    April 17, 2019 1:47 pm

    It’s a pity climate change doesn’t wipe out species like Sarah Breedon, then it really would have some purpose in life!

  15. Sylvia permalink
    April 18, 2019 10:19 am

    We need our own President Trump so as to cut off the tap of billions ! It will be the only way anything will change. Our useless government probably does not even know what CO2 is, or us vital for, or even how much is in the atmosphere. We are governed by pygmies.

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