The media reports on COP27 suggest we are all doomed as it is unlikely that we will keep to the target of 1.5 degrees of global warming. This is an unduly pessimistic outcome. A rise in temperature can actually be beneficial in many parts of the world, if damaging in others.
It is certainly sensible to try and reduce carbon emissions in the long-term but there needs to be a cost/benefit justification and a focus on countries that are the biggest carbon emitters – namely China, India, USA, and Russia. For the UK to aim for net zero makes no economic sense.
Meanwhile the UK Government has committed £11.6 billion to a “climate fund” to support a mix of energy transition, climate financing and forest and nature preservation measures. Some of these may be worthy objects but can the country really afford many billions on such projects when our own population is suffering from shortages of food and heating?
There is also a demand for “reparations” for the damage that has been caused by high carbon emissions that has resulted in floods and droughts. That is debateable to begin with and it ignores the benefits brought to the world by the cheap energy available from oil and gas. That has increased food production and enabled the world population to increase to a level that would otherwise have starved. See the book “How the World Really Works” by Prof. Vaclav Smil for the evidence on this subject. Reparations should certainly therefore be rejected.
I am certainly not supportive of the Just Stop Oil campaigners who are simply irrational and I will continue to invest in oil/gas companies but not in coal mining companies while I have been investing in alternative energy funds. Burning coal is a bad option in comparison with generating electricity from wind farms, hydro-electric schemes, solar arrays and other projects.
But we do need to reduce the world’s population if we are to improve the environment which is an objective most of the climate campaigners simply ignore.
Companies are of course jumping on the bandwagon of “green-washing” by issuing policy statements that support ESG policies. The latest example in my stock market portfolio is from Up Global Sourcing (UPGS) who announced today their ESG strategy. This includes a commitment to net zero Scope 1 and 2 and emissions by 2040 and net zero Scope 3 emissions by 2050. Other commitments are:
- 50% less plastic packaging by 2025 (compared to a 2019 baseline), with the remaining plastic packaging to contain an average of 30% recycled content and be 100% recyclable or reusable.
- Gender balance in leadership roles by 2030.
- 40% of Board representation to be female by 2025.
- 20% of UK workforce to be made up of ethnic minorities by 2030.
- 60% of UK workforce to be recruited from the local community by 2030, versus 47.2% % today.
Simon Showman, Chief Executive of the company commented: “Striving to do the right thing has always been core to everything that Ultimate Products does”. Surely we can do without such platitudes. As regards the stated objectives it’s worth bearing in mind that the directors making such commitments will likely be long gone by the dates promised. Am I a cynic or just a realist?
Meanwhile the company is part of the global economy with production of the products it sells in the Far East (87% from China) and being shipped thousands of miles via polluting ocean-going vessels burning oil.
If that makes economic sense then I am happy for them to carry on but we could do without the “holier than thou” commitments.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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