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Why the next financial crisis could be green

November 3, 2020

By Paul Homewood

 

A very good analysis in Spiked:

 

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Green finance. Climate finance. Sustainable finance. These phrases no doubt fill most people with a kind of existential dread, but I fear we will all have to learn a lot more about green finance in the years to come.

For one reason why, take a look at Elon Musk’s electric-car venture, Tesla. In just the first nine months of 2020, it received a whopping $1.2 billion in regulatory credits – from California and other states in America, from the US federal government and even from the European Union.

That’s $1.2 billion without making a single extra car – just for making cars that aren’t based on fossil fuels. Mr Musk sells his credits to Honda, General Motors and Fiat Chrysler (FCA) – car giants that haven’t got out of gasoline and into electric fast enough, as far as the US authorities are concerned.

Full story here.

 

It is little wonder that big finance is being attracted to green ventures, given all of the subsidies thrown at them. But what happens when the subsidies stop?

We have talked before about the increasing unsustainability of offshore wind projects, which have signed up to clearly uneconomic deals here in the UK. Huge losses are going to hit them down the line, unless they get government bailouts.

You can multiply those losses many times, to cover all the rest of the green finance at risk, which is based on nothing more substantial than political whim.

As the writer concludes:

Led by the stock market hubs of Amsterdam, Zurich and London, green finance shows what one expert calls a marked ‘dependence on public policy and regulation’. Too right. The byzantine world of green finance is just the ticket for underwriting obscure, ‘build back greener’ state policies, which have become all the rage in the wake of Covid-19, despite repeated failures in the past, like Green New Deals, Green Recovery Plans, green jobs and all the rest.

As we enter the first recession since the crash of 2007 / 2008, which was in the first instance a financial crisis, what could possibly go wrong?

13 Comments
  1. JimW permalink
    November 3, 2020 10:57 am

    And we can thank our last departed BoE Chairman for spending most of his time organising this across the world, using his chairmanship of a key BIS committee to force all CBs , commercial banks and insurance companies to hard wire this in their operations.
    I don’t think its any coincidence his wife is a green nutter, just like Johnson’s current squeeze.

  2. Geoff B permalink
    November 3, 2020 10:59 am

    Lets hope Farage’s new Reform party switches to opposing green policies, I am not sure anti lockdown is a sustainable subject, relatively short term. Anyway I am watching what happens in the next month, before I make my mind up.

    • ianprsy permalink
      November 3, 2020 1:01 pm

      He’s got plenty to be going on with!

      https://lockdownsceptics.org/

      • Gerry, England permalink
        November 3, 2020 1:53 pm

        The problem with Farage will be the same one he had before, and shares with the idiot Johnson – he doesn’t do detail. And doesn’t like having competent people around him that are knowledgeable – just like Johnson again. The media will love it as not only do they no longer do detail they are just about personalities.

      • November 3, 2020 2:23 pm

        It’s the “knowledgable people” who have got us into this mess.

        It needs someone like Farage to cut through the rubbish fed to us by the “experts”

      • Gas Geezer permalink
        November 4, 2020 12:27 am

        Being a shrewd political operator I doubt Farage would risk stepping too far outside the Overton window .Put it this way, if he had gone short on Tesla stock he would have lost everything.

    • Adam Gallon permalink
      November 3, 2020 3:09 pm

      Yet another bandwagon for him to leap on.
      A quick & cheap make-over, of his moribund “Brexit Party”.
      Doubtless the suckers that funded his little commercial venture under that name, will cough up some more.

  3. In the Real World permalink
    November 3, 2020 11:49 am

    The heads of the UN IPCC admitted a long time ago that the aim of the “Global warming / Climate change ” scam was nothing to do with the climate , but all about bringing in a Socialist One World Government . This was to be done by taking control of much of the Western worlds money as they could get .

    So all of the “Carbon Taxes ” , renewable energy costs & everything else designed to take money from the public are only for political reasons because the world is not getting hotter & CO2 has almost no effect on the climate .

  4. cajwbroomhill permalink
    November 3, 2020 12:04 pm

    There is no logic in our continuing any “green” spending at all pending acceptance of the need by the non-compliant Eastern nations who must then curb greenhouse gases output before hand. There must be complete verification of their policy changes.
    Once these countries have adopted such a green practice, we could reconsider policies but only based on verifiable impacts on climate benefits.
    The UK, whose CO2 output is negligible, need never readopt such green habits.

    • Sobaken permalink
      November 3, 2020 2:37 pm

      I believe the idea is to force it upon Eastern nations through trade. Eastern economies are highly dependent upon exporting raw resources and manufactured goods to the West. The EU has already once threatened a trade war against those who won’t abide by their green standards with their border adjustment carbon tax, so we can probably expect more such measures to come in the future. That’s why every Eastern corporation, even those trading in oil and gas, already abide by the Western ESG standards and signal their virtue in their dealings with the West, at least they do on paper. They’d have no problem say shifting from exporting natural gas to exporting “blue” hydrogen or trading in carbon credits to offset their production emissions, the costs are going to be borne by the energy buyers anyway.
      There also seems to be a sentiment that Eastern nations, having been the main producers of “green” technology (and the minerals required to make it) for the West, would eventually adopt all those wondrous solar panels, batteries, electrolysers, EVs and the rest of it for their own use due to available supply chains and low local costs. China is usually pointed out as an example of massive adoption of electric cars (even though it was mostly driven by other reasons, and on second thought wasn’t really that massive). Whether that is an accurate prediction remains to be seen, but I’d bet that it isn’t.

  5. Broadlands permalink
    November 3, 2020 3:19 pm

    There is nothing renewable about a broken solar panel or a rusted out wind turbine. They will have to be replaced, and on a massive scale. The same will be true for all ICE vehicles as PV vehicles with batteries take over. There will be no place to put all of this junk. A green crisis turning brown?

  6. Jackington permalink
    November 3, 2020 8:39 pm

    The climate change crisis is a scam is all – follow the money as explained above.

  7. It doesn't add up... permalink
    November 3, 2020 11:26 pm

    All malinvestment incurs real costs to the economy. Wherever they strike first, they get transmitted to others through higher prices, bankruptcies and lowered standards of living.

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