For this writer, kissing last year goodbye was less a buss on the cheek than it was a kick in Old Man 2015’s behind. The previous year was chock-full of banalities and trivialities regarding religious shareholder activists and their opposition to fossil fuels and the companies that bring them to market – all while hypocritically traversing the globe in their luxe tour buses and big jet airliners to lend supposed Divine authority to the religion of Gaia.
Let’s tick off some of the most egregious anti-fossil fuel activities of the nuns, priests, clergy and other religious affiliated with such groups as As You Sow and the Interfaith Center on Corporate Responsibility. First, of course, was the proxy resolutions they filed with oil, gas, coal and utility companies. Second was the veritable River Dance of interminable jigging conducted for the better part of the summer and fall subsequent to release of Pope Francis’ Laudato Si encyclical. Third was the preening and posing coordinated during the United Nations Sustainable Innovation Forum (COP21) held in Paris this past month.
The above comprise the three legs of the religious left’s 2015 anti-fossil fuel stool. For example, As You Sow boasts on its website:
• Carbon Asset Risk: We are filing shareholder resolutions with companies asking for scenarios and mitigation plans to address the potential stranding of fossil fuel reserves. If fossil fuel reserves cannot be burned, companies holding these reserves will be overvalued, and the resulting “carbon bubble” created by overvalued reserves puts investors at risk.
• Carbon Divestment: The risk implied by the carbon bubble creates an imperative for shareholder engagement and/or fossil fuel asset divestment. As a result of the carbon bubble, fossil fuel investments, especially those that are most carbon intensive, represent significant unappreciated risk that has not been priced by the market. We support the movement in academia, cities, states and corporations to redirect fossil fuel investments into investments in low-carbon or carbon free assets.
• Fossil-Free Investment: We provide resources and education to the investment community about carbon-free portfolio options and responsible clean energy re-investment opportunities to shift capital into infrastructure and technology needed to build a clean energy future.
Conveniently forgotten in all the above folderol is the tremendous benefits wrought from fossil fuels since the Industrial Revolution. Since we’re making lists, let’s begin with Benefit One: Fossil fuels replaced whale oil and the burning of dung for light, heat and cooking, which isn’t an insignificant achievement. Benefit Two: Fossil fuels are plentiful and relatively inexpensive. Benefit Three: Fossil fuels have assisted in reducing world poverty substantially.
Coincidentally, perhaps with a bit of providence, 2015 also marks the year economist Angus Deaton was recognized by the Royal Swedish Academy of Sciences with a Nobel Memorial Prize in Economic Sciences. Since most of the press coverage of Deaton’s award focused on his work on income inequality, it’s doubtful our faithful shareholder activists haven’t dug any deeper lest they challenge their respective confirmation biases. As noted by Stanford University’s Hoover Institution Research Fellow David R. Henderson in the Wall Street Journal:
World poverty is falling, life expectancy is increasing and higher wealth makes you somewhat happier. If you want to understand Mr. Deaton’s thinking, read his 2013 book, The Great Escape: Health, Wealth, and the Origins of Inequality….
“Life is better now than at almost any time in history,” writes Mr. Deaton in the book’s opening. “More people are richer and fewer people live in dire poverty. Lives are longer and parents no longer routinely watch a quarter of their children die. Yet millions still experience the horrors of destitution and of premature death. The world is hugely unequal.”
What is behind this explosion in wealth and health? In the 19th century, an important factor in economic growth and the decline of poverty was the Industrial Revolution. In the early 20th century, Mr. Deaton notes, cleaning up water supplies, extending vaccinations, and applying germ theory to disease prevention were crucial for improving health. He worries, though, that the very wealthy are having and will have a disproportionate influence on the political system….
Countries with the highest per capita income have, by and large, the highest life expectancy. The “hinge point” beyond which that relationship flattens is at about $8,000 per capita in 2005 U.S. dollars. Below that income, Mr. Deaton writes, “infectious diseases are important causes of deaths, and many of the deaths are among children, so that in the poorest countries, about half of all deaths are of children under the age of 5.” At higher incomes, deaths of children are fairly rare, and “most deaths are of old people who die not from infectious disease but from chronic diseases.”
The answer, writes Henderson following Deaton, isn’t decreasing wealth in the developed world to assist the poorest nations. The answer – yes, dear readers who already are ahead of me – is to assist the poorest nations become wealthier through good governance. Concludes Henderson:
Mr. Deaton is a strong critic of foreign aid. He believes that the approximately $5 trillion given by governments of rich countries to poor countries over the past 50 years has undercut good governance by making poor countries’ leaders less accountable to their own citizens.
And, it should go without saying, access to cheap and plentiful energy to fuel developing economies. The WSJ commented this past month as COP21 was wrapping up:
The other big item on the Paris agenda is the one that these confabs always come down to—cash. Most developing-world INDCs [Intended Nationally Determined Contributions] are conditioned on an enormous wealth transfer. To try to resuscitate talks in 2009, Hillary Clinton as Secretary of State pledged a $100 billion public-private fund that would flow to poorer nations for climate mitigation. But the poor countries have wised up and are now demanding much more for “climate justice.”…
The best insurance is not to force-feed windmills on India, or hand more power to government mandarins who will parcel out how much carbon each country can emit. The remedy is faster economic growth so richer societies are better able to adapt to whatever happens.
Yup, and in the meantime the necessary growth will derive mainly from the same substances swishing about in the tanks of those jet airliners and buses carting nuns and other religious from one photo opportunity to another.