If carbon dioxide emissions from human activities are causing dangerous climate change, China is the straw that stirs the drink. China emits more carbon dioxide than all the developed countries on Earth combined.
There is the rub. In his speech kicking off the annual weeklong Communist Party Congress, President Xi Jinping announced fossil fuels have a strong future in China as energy security will be among the country’s top priorities in attempting to advance economic growth. At the end of the conference, in a historic but not unexpected event, Xi was elected to an unprecedented third five-year term as general secretary of the Chinese Communist Party.
Xi said aspirational goals to peak and eventually zero out carbon emissions would be tempered with prudence given the recent power shortages following from a limited amount of renewable power sources replacing fossil fuels for electric power generation over the past few years.
Despite China’s commitment to peak carbon emissions between 2030 and 2035, in 2021 the communist state significantly expanded coal mining and use in response to power shortages that idled factories and slowed economic growth.
Xi’s speech restated China’s position that it will not end the use of fossil fuels until enough sufficient, reliable non-emitting energy sources are available to replace them.
“We will work actively and prudently toward the goals of reaching peak carbon emissions and carbon neutrality,” Xi said in his address. “Based on China’s energy and resource endowments, we will advance initiatives to reach peak carbon emissions in a well-planned and phased way, in line with the principle of getting the new before discarding the old.”
In addition to increasing coal use, Xi’s spokespersons also made it clear China will expand its exploration and development of oil and gas resources to ensure energy security.
China is not the only country placing shoring up energy security ahead of fighting climate change. The New York Times and National Public Radio both reported on Germany’s race to reopen and expand coal mines and restart previously shuttered coal-fueled power plants in the face of a severe power shortfall entering the fall and winter. Germany previously shut coal power and nuclear power plants and replaced them with huge investments in wind and solar, with Russian natural gas as the backstop. Germans currently pay the highest prices for electricity in all of Europe. As wind and solar have failed to supply reliable power and Russian gas has been cut off during the Ukraine war, Germans face a chilly winter if sufficient coal power plants can’t be brought online quickly.
Italy’s new leader has announced her party and its governing partners want to pull back on the carbon commitments Italy made to reach the EU’s climate goals. The AP reports Giorgia Meloni, Italy’s new prime minister, “contended that the European Union had failed to craft policies that would ensure available, affordable energy supplies. Sky-high energy prices ‘have forced businesses and families down to their knees,’ Meloni said.”
Meloni’s Brothers of Italy Party, unlike other parties that contended to control parliament and install the prime minister, has proposed no specific emission reduction targets, and Meloni has indicated her government will relax Italy’s emission reduction targets. Meloni has also indicated she and her parliamentary partners support reopening previously closed nuclear plants and developing domestic gas resources in the Adriatic Sea instead of just importing gas from foreign countries.
Real Clear Energy reports Vietnam has decided not to end coal to meet climate goals it set when it signed the Paris climate agreements. Vietnam now intends to increase coal use and imports for at least the next 13 years because more coal, natural gas, and oil are necessary to meet the country’s growing energy demands.
In Latin America, support for fossil fuels is breaking out all over. The Offshore Engineer reports Argentina, Brazil, Ecuador, Guyana, and Mexico are leading the way in new offshore oil and gas development, securing financing and granting leases for new production projects. State-owned and private companies are also purchasing tankers and equipment and developing refineries to advance energy independence while increasing exports of fuels for which they foresee growing global demand.
While leaders of countries across Asia, Europe, and South America still talk about the need to reduce carbon dioxide emissions to fight climate change, they are moving forward with policies guaranteed to increase emissions—not for emissions’ sake, of course, but to secure the reliable energy supplies necessary to ensure economic growth and their respective governments’ ability to remain in power.
Actions speak louder than words.
SOURCES: The New York Times; NPR; BBC; CNBC; Euronews; Associated Press; Real Clear Energy; Time; Offshore Engineer
IN THIS ISSUE …
ESG PROMOTERS OVERSELL ITS VIRTUE, PROFITABILITY … SOUTH CAROLINA, MISSOURI JOIN ESG COUNTERREVOLUTION
ESG PROMOTERS OVERSELL ITS VIRTUE, PROFITABILITY
An article published by Bloomberg confirms environment, social, and governance (ESG) initiatives often support activities and programs that harm the environment and violate human rights, as previous research has shown. In addition, companies and stock funds committed to ESG goals are often unprofitable or at least produce lower returns than competitors and funds not committed to putting amorphous, often ill-defined, environment and social goals above profits.
ESG and DEI (“diversity, equity and inclusion”) “taken together … constitute the ruling business ideology of our age,” writes Bloomberg Global Business Columnist Adrian Wooldridge. “Both ESG and DEI have generated massive industries. Investment giants, notably BlackRock Inc., State Street Corp., and Vanguard Group Inc., claim that more than a third of their assets, or $35 trillion, are monitored through one ESG lens or other. Every Fortune 100 company and most Fortune 500 companies have adopted DEI programs.”
Despite all the hype, experience shows the various goals pursued under the banner of ESG and DEI conflict with each other. In pursuing environmental goals, for example, equity or human rights goals are undermined, writes Wooldridge. In addition, research shows the pursuit of these often-amorphous goals can lower investment returns, Wooldridge writes:
The apostles of ESG are as guilty of overselling their product as they are of intellectual sloppiness. The ghastly phrase “win-win” that is endemic in the industry obscures the huge costs of adjusting to climate change. But is it “win-win” for investors when, according to an analysis by Morningstar, “sustainable” funds charge on average annual fees that are almost 50% higher [than] those of traditional funds? And is it win-win for the planet when companies can game the system by selling a polluting plant to another company that is happy to be judged as a “sin” stock?
[A] 2021 literature review of more than 1,100 peer reviewed studies and 27 published meta-analyses determined that the risk-adjusted financial performance of ESG investing was indistinguishable from conventional investing. Another study of American mutual funds between 2010 and 2018 found that companies in ESG investment portfolios violated more labor laws, paid more fines and had higher carbon emissions than those in non-ESG portfolios sold by the same institution.
As to DEI goals, Wooldridge finds the pursuit of equity is often just warmed-over envy and socialism, which regularly leads to absurd corporate policies that offend many workers, customers, and the public while damaging the corporate bottom line:
When it comes to equality, liberal capitalism is built on two great principles: procedural justice (equality of treatment before the law) and equality of opportunity. Liberal capitalists celebrate the fact that Jeff Bezos is filthy rich for a mixture of first principles (people should be free to exercise their talents) and utilitarianism (Amazon.com Inc. improves the general welfare by providing better services at better prices). But “equity” tries to substitute “fairness” for “equality of opportunity.” … “In order to truly be antiracist,” says Ibram X. Kendi, a leading guru of the social justice movement, “you also have to truly be anti-capitalist.”
This emphasis on “equity” drives the DEI formula in an increasingly radical direction. The Coca-Cola Co. had to apologize for including on its company training platform an external LinkedIn presentation on confronting racism that urged viewers, “Try to be less white.” … Bank of America Corp. supported a “Racial Equity 21-Day Challenge” for its employees which argued that the United States is a system of “white supremacy.” Walmart Inc. has told workers that they are guilty of “internalized racial superiority.”
The result of this combination of social justice radicalism and overpromising is that DEI programs are ineffective, or worse. Anti-bias training frequently activates stereotypes. …. Diversity training that vilifies whites produces resentment among whites, particularly when compared with diversity training that celebrates color blindness. The clunking machinery of DEI—the training videos, workshops and roleplaying exercises—also offends workers’ sense of autonomy and self-respect.
The push for ESG and DEI is producing a backlash among politicians, with numerous states passing or considering legislation to block “woke” banks and investment funds from managing state pension funds or doing business with the state.
“If the GOP retakes the majority in the upcoming midterm elections, it reportedly plans to investigate the U.S. Chamber of Commerce for its increasing ESG advocacy,” notes Wooldridge.
SOURCES: Bloomberg; Newsbusters
SOUTH CAROLINA, MISSOURI JOIN ESG COUNTERREVOLUTION
On October 18, Missouri became the latest state to make investment giant BlackRock pay for its woke ESG investment policies. Missouri State Treasurer Scott Fitzpatrick announced the state had pulled $500 million in state pension funds from management by the company.
Fitzpatrick told FOX Business the Missouri State Employees’ Retirement System (MOSERS) sold all public equities managed by BlackRock.
BlackRock is one of 273 signatories on the Net Zero Asset Managers initiative, “a group that has committed to support the goal of the Paris Agreement to limit global temperature rises to 1.5 degrees Celsius and to support investing aligned with achieving net-zero emissions by 2050 or sooner,” reports Pensions & Investments.
“This is the right thing to do for Missouri state employees who rely on the assets managed by MOSERS for their retirement,” Fitzpatrick told FOX Business when he announced Missouri’s decision.
Missouri joins a growing number of states that have removed their pension funds from BlackRock, other fund management firms, and banks in response to their environmental, social, and governance (ESG) initiatives—primarily over their attempts to force the companies and pensions whose stocks they manage or hold to end support for fossil fuels and firearms and to promote elements of the leftist agenda such as critical race theory and LBGTQ indoctrination in schools.
On October 5, Louisiana’s Department of Treasury announced it had divested $794 million from BlackRock in response to the company’s net-zero commitments. Most recently, South Carolina Treasurer Curtis M. Loftis Jr. announced the state would divest an additional $200 million from BlackRock funds by the end of 2022.
“For the past five years, I have worked systematically to remove BlackRock managed funds from our state’s various investment portfolios,” Loftis said in an email announcing the move. “I realized early on that ESG … had the potential to seriously undermine our state’s economic model from one that values fiduciary responsibility and sound financial judgment to one that pushes the left-wing political agenda of ‘stakeholder capitalism.'”
Fitzpatrick noted he is obligated by law to ensure the state’s retirement funds and other assets are managed in a way that prioritizes maximizing returns for retirees and taxpayers, not advancing progressive political policies.
“Fiduciary duty must remain the top priority for investment managers—a duty some of them have abdicated in favor of forcing a left wing social and political agenda that has failed to succeed legislatively, on publicly traded companies,” said Fitzpatrick. “We should not allow asset managers such as BlackRock, who have demonstrated that they will prioritize advancing a woke political agenda above the financial interests of their customers, to continue speaking on behalf of the state of Missouri.”
Derek Kreifels, CEO of the State Financial Officers Foundation, praised the Missouri decision. The foundation has worked with state treasurers in Arizona, Arkansas, Idaho, Florida, Kentucky, Louisiana, Oklahoma, North Dakota, South Carolina, Texas, Utah, and West Virginia over past year to stop their pension funds from being used for leftist political causes.
“Fitzpatrick is taking decisive action to protect the people of Missouri by divesting pension funds from BlackRock, who has weaponized ESG by pushing radical climate and social policies under the guise of an investment strategy,” Kreifels said when Fitzpatrick announced Missouri’s action. “BlackRock’s reckless agenda is robbing Americans of their retirement dollars and driving up costs from the gas pump to the grocery store.”
SOURCES: Pensions & Investments; Fox News
H. Sterling Burnett, Ph.D., is the Director of the Arthur B. Robinson Center on Climate and Environmental Policy and the managing editor of Environment & Climate News.
