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Presidents Xi and Putin (and the Hedge Funds!) are laughing at us

November 8, 2021

By Paul Homewood



Cop26 has been a gift to our geostrategic rivals — and to hedge funds
The gap between rhetoric and fact is a perennial feature of politics. But seldom can the chasm between claim and reality have been as wide as that displayed by Alok Sharma at the
Cop26 conference in Glasgow. The British president of the latest intergovernmental climate change gathering told the delegates (and the world’s media) that “the end of coal is in sight”, as a result of the agreement he had negotiated.

That was the rhetoric. Now the fact. Not only was the declaration to phase out coal by the 2040s not signed by the world’s top three consumers (China, India and America, which account for more than 70 per cent of the global CO2 emissions from burning the stuff); the pledge itself was neutered by the addition of the get-out “or as soon as possible thereafter”.

The head of the International Energy Agency, Fatih Birol, observed that the absence of the biggest coal producers as well as consumers (Australia also refused to sign) meant the chances of meeting the proclaimed and mysteriously precise target of keeping global temperatures at no more than 1.5C above pre-industrial levels were “close to zero”. By then, however, all the heads of government who actually bothered to show up in Glasgow had already left in their private jets.
The fact that the leaders of Russia and China
did not attend gave President Biden (who did, and was awake for much of the time) the opportunity to castigate them for their lack of involvement.
But Presidents Xi and Putin can at least be absolved of the charge of hypocrisy. Offstage in Glasgow the US secretary of state, Antony Blinken, held talks with the foreign minister of the United Arab Emirates, in which he urged Sheikh Abdullah bin Zayed Al Nahyan to “further increase production” of oil — this from the official state department account of the meeting. Before flying in to Glasgow, Biden himself had even mooted the idea of punishing Russia and Saudi Arabia if they didn’t increase oil output soon (“What we’re considering doing on that, I’m reluctant to say before I have to do it”).
In its inarticulate way, this captures the confusion of the West’s official policy (of which the British government claims to be an exemplar). On the one hand our leaders want to make oil and gas production a thing of the past. On the other hand they know that their own voters can’t get enough of the stuff (not least for heating their homes) and in particular hugely resent any steep increase in its price. As BP’s chief executive, Bernard Looney, explained last week: “If you take away supply, but demand does not change, the only thing that happens is that prices go up.”
That has been happening in recent months — and it has been a boon for oil exploration and production companies. Their asset values have rocketed up in line with the price of crude. So you might think, if you have a mind for the value of your pension fund: I may be paying more at the pump, but at least my share portfolio will benefit.
Think again, perhaps. The big institutional investors, at the urging of their ESG (environmental, social and governance) committees, have been divesting from industries defined as polluting. And who have been the buyers? Hedge funds, mostly, such as that managed by Crispin Odey, whose European fund has risen in value by more than 100 per cent so far this year. Last month Odey told the Financial Times: “They [the big institutional investors] are all so keen to get rid of oil assets, they’re leaving fantastic returns on the table.” Another hedge fund manager, Josh Young of Bison Interests, observed: “People don’t understand how much money you can make in things that people hate.”
A friend of mine who is a fund manager said it reminded him of the situation some years ago with the tobacco companies: “A number of pension funds felt squeamish about holding their shares, but their clients, whose interests they were meant to serve above all, lost out, because the flow of dividends from the likes of British American Tobacco has continued to be stupendous.”
At least BAT is still a FTSE-listed company, so pension funds can invest in it if they wish. But Thérèse Coffey, the secretary of state for work and pensions, has announced plans to “name and shame” pension funds that prove unwilling to divest from polluting industries.
Two consequences flow from this. The first is that unquoted companies — which the “hedgies” can invest in without the restrictions that apply to big pension funds — will acquire “polluting businesses” at knockdown prices, making potentially vast returns for the people who already have the considerable sums required by such firms of their clients.
The head of the world’s biggest fund manager, BlackRock, made this clear at a panel discussion in Glasgow last week. Larry Fink observed that the disparity of obligation between public and private companies was creating the opportunity for “the biggest capital market arbitrage in my lifetime. We are seeing more hydrocarbons moving away from public entities to private entities.”
And the second consequence of Coffey’s proposals? If BP, Shell and the like are discouraged from investing in more oil and gas developments, then there will be even more dependence (as Biden has already unhappily noted) on countries such as Russia and Saudi Arabia. Leave aside the economics; this is a form of geostrategic self-harm by the West. Or, at least, it will be unless the transition to a post-oil and gas era is far smoother than seems feasible.
It’s true that renewable energy sources such as wind and solar have become more competitive with fossil fuels. But not only is their intermittency a feature rather than a bug; the bizarre paradox is that the world’s biggest supplier of solar panels and wind turbines is China, whose cost advantage in producing them is achieved partly by its continued mass usage of coal energy — which it has no intention of checking in the foreseeable future, as Sharma has discovered, though not admitted.
Instead the Cop26 president chose to praise the corporation bosses who showed up in Glasgow by saying that, when he started his career in finance, “there was a guy called Swampy. He spent his time occupying trees and tunnels and he was the main face of climate action in the United Kingdom. But today the Swampys of the world are all around us, in boardrooms, in government departments and trading floors all around the world. You, my friends, are the new Swampys, so be proud.”
Perhaps they are proud. But I think of the laughter in the dark, from President Xi in Beijing and President Putin in Moscow. And I am worried.

  1. Colin MacDonald permalink
    November 8, 2021 6:43 pm

    Divestment is sort of hypocritical, if you’re selling your fossil fuel shares you are indeed hoping to get the maximum amount for them, the market value. Unless the entire planet goes woke you’ll likely get the same price as if divestment weren’t a thing. You’re hoping that someone else lacks your “scruples” and will buy your shares. If you think shutting down the FF is so vital, you and your Green mates need to buy BP, get control of the board and shut the lot down, and take the hit.

    • Phoenix44 permalink
      November 9, 2021 8:02 am

      Not just hypocritical but stupid. You can only divest if somebody buys them from you. And these companies are not getting their capital from the equity markets. They are using cashflow and debt.

      It’s Carney’s unpleasant, undemocratic attempt to close debt markets to fossil fuel companies that are the real threat.

  2. Charles Wardrop permalink
    November 8, 2021 6:54 pm

    Western nations’ madness founded on ignorance and also hypocrisiy.contrasted with good sense without any “sin” from out East.

    A Western folly indeed because CO2 is not the culprit. The main variables controlling the atmospheric and terrestrial temperatures are the sun, and water vapour influenced by cosmic rays to form clouds.

    So all the investments in taming AGW are going to waste, possibly suicidally.

  3. November 8, 2021 6:54 pm

    Re coal, Poland declared itself a developing nation to fit in with its own deadline of 2049.

  4. avro607 permalink
    November 8, 2021 7:02 pm

    Just a quick intervention -the Mail today has an 8 page advert full of Green nonsense-question,do I complain to the Mail or the Advertising Authority?

  5. MrGrimNasty permalink
    November 8, 2021 7:03 pm

    Swampy wasn’t protesting climate change/CO2, he was just an anti-establishment/anarchist hiding behind environmental protection (i.e. preventing actual physical destruction by construction projects.)

    True, he cropped up again relatively recently and has now latched on to the climate/extinction rebellion nutcakes, but XR leaders are merely anti-establishment/anarchists/occupy movement types hiding behind CO2 .

    The climate movement keeps rewriting history and the motivation of famous ‘environmentalists’ to pretend that they were protesting CO2 all along.

  6. Harry Davidson permalink
    November 8, 2021 9:24 pm

    I hear that Obama was lecturing us all at Glasgow today. Does anyone know how he got there?

    • Ian PRSY permalink
      November 8, 2021 11:22 pm

      Obama featured in the news in the usual apocalyptic terms, immediately followed by an enthusiastic announcement of resumption of trans-Atlantic commercial flights, all without a trace of irony.

      • Vernon E permalink
        November 9, 2021 10:35 am

        Obama and his family have built a multi-million dlollar home on the beach at Martha’s Vineyard on the Atlantic coast. Anyone for sea level rise? Oh, and, the Maldives are massively expeanding their airport capacity.

      • Ian PRSY permalink
        November 9, 2021 10:40 am

        It’s OK, VE. So long as the development of ammonia-based aircraft fuel is complete before they sink beneath the waves, they’ll be useful. Mind you, there’ll have to be a bit spent on floating airports to cater for the limited range of so-powered aircraft. More green jobs!

  7. Barrie Emmett permalink
    November 8, 2021 9:48 pm

    No doubt in a jet provided by John Kerry, who I saw giving Obama a standing ovation.

  8. Graeme No.3 permalink
    November 8, 2021 11:24 pm

    The local newspaper in Adelaide is the well named The Advertiser, but in-between the adds are lots of Green articles and some coverage of the COP that would please the BBC.
    The letters to the Editor section was full of praises for the coming “saving of the World from catastrophe” etc. but I feel for one writer who sang the praises of Boris and The UK’s transition to renewables, but the same day some ‘sceptic’ noted that the UK’s electricity was coming 70% from fossil burning sources along with another 16% from nuclear.
    I am not sure if that is correct but I think it might have caused some to think.

    • Douglas Dragonfly permalink
      November 9, 2021 2:33 am

      That sounds about right.
      Bare in mind that not of the UK’s energy comes from within its own boarders.
      Inter connectors enable enough supply today.
      Tomorrow does not so comfortable.

      • November 9, 2021 9:07 am

        UK electricity imports are showing negative on Gridwatch this week, i.e. as net exports.

      • ThinkingScientist permalink
        November 9, 2021 5:29 pm

        oldbrew – I noticed that too. Its not something I previously recall and seems unusual, particularly as it seemed not to matter whether wind output was high or low.

  9. November 9, 2021 5:15 am

    There’s a new Simon Webb video
    unfortunately he makes factual errors
    Wind turbine blades are carbon fibre not metal
    Drax wood doesn’t come from the Baltic etc.

  10. Phoenix44 permalink
    November 9, 2021 8:18 am

    Government pressure on private individuals in this way is shameful. Either make these businesses illegal or allow people to invest in them without all this nonsense. It is utterly wrong to allow them to continue to operate – indeed depend on them continuing to operate – whilst simultaneously trying to prevent us investing in them. The results are, as Lawson correctly points out, a double-whammy: higher prices for us all whilst missing out on the returns from those higher prices.

    Once again our immoral government punishes the poor and the ordinary citizen whilst enriching a small group of the already wealthy. And the Left cheers them on and yells “more and quicker”.

  11. richard permalink
    November 9, 2021 8:48 am

    and for all the lecturing from the champagne quaffers at Glasgow most people think about holidaying in some far off warm place, hopefully flying there in business class if they could afford it, driving a bigger car, eating at restaurants, buying the best clothes they can afford, living in a swanky house…….

  12. November 9, 2021 9:42 am

    The Daily Telegraph gives regular space to the reprint of a news item from 100 years ago. Today they print the dramatic story from 9-10 November 1921 reporting ‘Country swept by snowstorms’ and ‘Further gales at sea’ after an earler heatwave – an excellent reminder that there’s nothing new under the sun and that extremes have been always with us. No-one then screamed carbon dioxide or global worming. Boris should read it.

  13. Athelstan. permalink
    November 9, 2021 11:00 am

    I’ve totally shut off the telly, I don’t read newspapers. The flop26 could be on the dark side of the Loonie land for all that I am concerned. I’d also posit it that, among friends and business colleagues alike, in the pub and restaurants the annual gathering of the luvvie and political jet set is, has not made any impression on ordinary folk except a background of gripes and growing stronger in output about the costs of going eco mental.

  14. Mad Mike permalink
    November 9, 2021 12:53 pm

    Whats pretty clear to skeptics and alarmists alike is that the targets for the required levels of CO2 that would stop CC will fail to be obtained in the timescale we are told are necessary.

    We’ve been told time and time again that we have only a limited number of years, pick your own number, before there is an uncontrollable runaway of global temperatures and it is crystal clear that, if the alarmists are right, that runaway it now a done deal. It would therefore make more sense now on concentrating on mitigation measures rather than concentrating on CO2 reduction. The logic is that, if we set a maximum target for CO2 levels in the atmosphere and they are not going to be met, it doesn’t matter whether that target fails to be met in 5, 20, 50 or a 100 years, and at some point we need to adopt a strategy to cope with the situation so why not now.

    This is not going to happen of course as it would mean the end of the Alarmist’s job of bringing in a world authority and inflicting great damage on the West’s economy to help achieve it.

    The “science may be done” but the war is lost.

    • Tim Leeney permalink
      November 9, 2021 3:41 pm

      The war is certainly not lost, and we should all keep on fighting it. Don’t give up so easily.

      • Mad Mike permalink
        November 9, 2021 4:51 pm

        Perhaps I didn’t phrase it clearly. As COP26 didn’t bring the CO2 emissions to an abrupt halt, the Alarmists’ war is lost because now we are headed fo planetary destruction. The net zero targets won’t be met, that is clear, so essentially they have lost the argument. It will be no use trying to get governments to implement the Alarmists’ demands so we are all doomed. That sounds like losing the war to me but that won’t obvious to these guys for a few years so we can still expect the BBC etc. to carry on as before even though we were told COP26 was the planet’s last chance. Do they want more last chances?

        These guys need to ask themselves “Where to now?”

    • ThinkingScientist permalink
      November 9, 2021 5:33 pm

      Perhaps we should all just suggest to the greenies as there is no hope left that they should adopt the end of days strategy in the Nevil Shute novel “On The Beach”?

      That might reduce their numbers a bit.

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