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Climate capitalists have serious money in climate-friendly investments (economist.com)
73 points by ryan_j_naughton 25 days ago | hide | past | web | favorite | 76 comments



Good.

Look, ultimately, beyond a certain point, this stuff is point scoring.

After you have some amount - say a few hundred grand, a million - the actual number doesn't really matter - you're waving your metaphorical dick around.

And that's fine. If we can convert that dick waving into serious change - if we can get the metric by which intelligent beings compete to be something good, like carbon captured or species saved or ICE cars avoided or _whatever_ - we are well on the way to winning.

You built an enormous solar farm? Adonis DNA.

If we hack it so that it just slots in to the Natural Way of Things - e.g. with a carbon tax or similar - such that investing and buying and doing good things is simply logical - even better.


If you want all of our productivity and competition to go towards something good you have to decide what good means. Is is it the total sum of all the wants and needs of society being matched up with our resources as efficiently as possible? Or is good something chosen by a small group of people using their superior knowledge and wisdom?


That's a false dichotomy. We don't need your technocratic oligarchy.

Most people already do agree on what's "good" and what isn't, and yet they (rationally) choose to put their money elsewhere, because they have no guarantee that everyone else won't freeload off of their contribution. If I invest $100 in protecting a public good (like the climate), I only get one seven-billionth of the benefit; the rest goes to all of the other people on the planet. So I'll only invest if everyone else chips in, too.

The easiest solution to force cooperation like that is called ... taxation. The more difficult, but perhaps closer-to-ideal solution involves more math, see e.g. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3243656


> If I invest $100 in protecting a public good (like the climate), I only get one seven-billionth of the benefit; the rest goes to all of the other people on the planet. So I'll only invest if everyone else chips in, too.

I used to think like this, but I'm fed up of taking "economic maxims" that I read on the Internet as being actually true.

I don't believe this to be the case. I think that taking action, being public about taking action, and ultimately standing behind what you think is right, taxes and others be damned, is the way to go.

Yes, there will be free riders. That's inevitable in anything you do. People "free ride" on software I write all the time. I can shoulder it.


Oh I agree, it absolutely is the way to go! If you haven't heard of it, take a look at the Giving What We Can pledge [0].

But most people aren't like you and me. I've had conversations about this with many others, and the most prevalent attitude is the one I described: ask them to buy the more expensive, environmentally friendly product, and they'll decline; ask them whether they would support a law that would require all products to be environmentally friendly, and they'll enthusiastically agree.

If that's how people work, then that's how we have to make policy.


My.....technocratic oligarchy? Sure, yeah.

Notice you have to assume that most people agree on what's good and that you know what that is. It's a solved problem, it's just a matter of implementing it.

> If I invest $100 in protecting a public good....So I'll only invest if everyone else chips in, too.

Public goods are non-rivalrous, another person consuming the good has no effect on you. So out of spite you're going to go against your own best interest because you think it's better to punish other people than to purchase a good that you would purchase if you could just figure out how to exclude them from using it. That's valuing the suffering of others over your own well-being. Going back to how hard it is to figure out what people think is "good".....


This is a false assumption as well.

If people decide to not invest to clean energy/climate-neutrality/reducing waste, it might be fear of freeloading, but it can be billions of other reasons. But most reasons will have something in common.

And it is not fear of freeloading.

It is a list of priorities. When something is really important for people, they do it, they invest time and money into it.

If people don't invest their time nor money, it is in fact not important for them.

So why tax something that isn't important for people (because if it was important, they everybody would buy clean energy, would stop using plastic & other things)?


It wasn’t important for people in medieval cities to have a working sewer. Nobody would invest in such a thing. But the benefits are obvious.

It wasn’t clear to people that putting on a seatbelt saves their lives. Maybe, because there was no seatbelt in the first place.

What’s important to people is sometimes a matter of marketing.

What’s important to people requires that "the right stuff" is offered.

People want to save the environment, but also want to save money. Only way this can work is if products get the damage they cause taxed in. Because right now, the environmentally friendly products are more expensive. It should be the other way around.


> Look, ultimately, beyond a certain point, this stuff is point scoring.

Larger amounts of capital means you can do larger things with it. Like SpaceX. If I had $zillions, I'd probably finance a probe to every object in the solar system that's moon size or larger, and landers to the ones that can be landed on.


Why would you do this before tackling the climate crisis?


The "why work on X before y is solved" approach has no legs.

Why work on climate change while poverty, cancer or illiteracy still exists?

By that logic, we should have never have had space exploration at all (and never should). I seriously doubt this would have improved our progress on the "bigger issues "


Well in this case to a certain extent, it certainly does have legs. Because the way climate change is going it looks like we won’t be around to capture the results of those probes landing.

Or at least not in a worthwhile sense (+5c and up).


what models are you using to make these guesses?


In my view for humanity to exist long term we need to become a interplanetary species. An impact like the one that killed the dinosaurs can certainly happen again and the sun has a expiration date.

Ultimately what is purposed isn't even a solution to the problem. Small reductions here and there that in total only manage to delay the inevitable. The only solution is mass scale terraforming projects and genetic modification of existing species to increase resiliency. If the coral reefs are dying we need to build reefs that are more resilient. If polar bears are overheating we need to breed ones who are more temperature tolerant. If the fish of the sea do not breed quickly enough for us to consume them at the rate that we currently do, we need to increase yields.


We probably won’t tackle the climate crisis. The time to act was 25 years ago and we’ve done virtually nothing that’s had an impact.


Even if we completely mess up the climate then Earth is still more inhabitable than some other planet in the Solar system.


Arguably we’re staving off an ice age which would make things _more_ habitable for humans.


Check your sources on that claim: it’s been widely circulated by fossil fuel lobbyists as a way to discourage action.


Surely I shouldn’t be discouraged from saying scientific facts?


Can you cite those alleged facts with something based on peer-reviewed research?

https://skepticalscience.com/heading-into-new-little-ice-age...


I don’t think I ever meant “there will be an imminent ice age” rather “normal ice age cycles will stop with current CO2 levels.”

https://theconversation.com/climate-explained-why-we-wont-be...


Because studying the planetology of the various other bodies in our solar system may spark novel ideas about how to successfully manage our own planet.


We don’t need novel ideas — the problems are well recognized and the solutions are ready to go at lower cost than inaction. The problem is that a few specific companies need to become much less profitable after decades of being able to avoid paying for externalities.

Talking about terraforming Earth is a common way of distracting from the real problem — and I say that as someone who loves the idea of exporting the solar system.


Some solutions are ready to go on a technical level but are struggling to gain enough social traction to be implemented; We should absolutely be pressuring the political sphere to move those projects forward.

There’s no guarantee that they’re even in the catchment area of the ideal solution, however, so we should be continuing to look for better ideas in parallel with implementing the best ones we have at the moment— there’s always the possibility that a Norman Borlaug will come along with a better solution than the common wisdom.


Spreading into the solar system is a long term solution.


A slightly shorter term solution: going underground.

Earth is huge, we have barely scratched the surface. There is a lot of space and resources underground. And we don't have to go anywhere, we are already here.


Exactly, seasteading and 'terraforming' deserts are other short term solutions, but for any of that to get more investment we need growing population in rich parts of the world, that would need this and would have money for this. But unfortunately we do not have that.


I think we need better marketing and just a handful of very wealthy and highly visible people to invest in those alternatives instead of going into space.

In any case, what really makes space exploration possible today, is military spending. Which means that for the alternatives to become viable, they need to have strategic military applications. Unfortunately.


Only for the select few that were allowed to leave the planet.


Except that's not what happens. What happens is people line up at the trough of government directed funding and distort the market, often negatively for a long period of time.

For example, people who are against meat consumption for climate purposes are linked through various entities to companies like BYND. So they begin to work on legislation that will profit BYND.

For another example, the solar funding debacle under Obama.

Otherwise I have no qualms with what you're saying.


> solar funding debacle

Sometimes you have to crack a few eggs. What % of startups do you expect to succeed, 100%?


The issue (as I understand it) was not that any one company failed, but that people lied about or ignored warning signs that failure was imminent for specific companies (edit: and that this may have been done due to conflict of interests). The actual policy issues and implication are hidden behind the partisan wrangling and spin that surrounded this topic.

There are legitimate concerns about conflicts on interest for people who have large investments in green companies while also lobbying strongly for particular "green" public policies. The risk is that if we uncritically accept these people at their word, we may end up with policies that do less to protect the environment and climate and more to line the pockets of the advocates.

Of course, these issues are endemic to our current political/economic systems and don't just apply to investment in climate friendly companies.

I would be much more inclined to trust the motivations of environment advocates with large investments in environmental companies if those investments were purchased and administered through some sort of blind trust to alleviate conflict on interest concerns.


What about all the coal-funded coal lobbyists?


Hence why I called it "endemic".


That solar "debacle" was ONE company failing out of over a dozen. The program itself turned a profit for Uncle Sam.


Link?

Doesn't look like that program accomplished its objectives: https://fred.stlouisfed.org/graph/fredgraph.png?g=lMDT


My neighbor is convinced that climate change isn’t real and has been pushed by the left to make activists feel important. As there’s an economic slant to this, my cynical view is that there’s a chance that climate change agenda is being pushed by AstroTurfing groups to drive government handouts to the Green industry. I’m 99.9% convinced that climate change is happening and will follow the models.... but maybe I’m being scammed.


It's very healthy of you to be skeptical of government handouts to the Green industry – not because climate change is fake (it's not), but because government rarely knows how to pick the right tech to invest in. (Note that the government also hands out lots of subsidies to the fossil fuel industry, though.)

The more economically rational way of solving the problem is to implement a carbon fee and dividend [0]. You simply put a tax on fossil fuels as they come out of the ground. This makes everything downstream a bit more expensive. You then return 100% of the tax revenue back to citizens – so government doesn't grow and consumers don't suffer, but companies suddenly feel intense competitive pressure to get more fuel efficient so they can lower prices. The market takes care of the rest.

It makes so much sense, even many of the big corporations are onboard [1].

The best thing you can do today is to contact your local representative about this policy [2].

[0] https://citizensclimatelobby.org/why-we-support-a-price-on-p...

[1] https://www.clcouncil.org/

[2] https://citizensclimatelobby.org/write-your-representative/#...


> You then return 100% of the tax revenue back to citizens – so government doesn't grow and consumers don't suffer

Supposedly HRC almost ran on universal basic income based on a carbon tax, but the math didn't quite work out in 2016.

But regardless of what happens to the money, economic incentives work.


At least the subsidies to fossil fuel companies are designed to spur production, and lower importation - remember the oil embargo? From a macro economic policy, it reduces money leaving the US to pay for oil. Had we not provided the handouts to spur production, would the US have had more money flowing out than the cost of the subsidies? (Global warming aside) The subsidies seem like smart macro economic policy, smart geo political policy, smart military policy. That being said, as long as the US is a net importer of oil, the subsidies make sense. The US is no longer a net importer and the fossil fuel subsidies should be re-evaluated. Notice that if the US were still a net importer of fossil fuels, then the same macro economic policy justifying fossil fuel subsidies could be applied to electric cars (a car is expected to have a service life of 200,000 miles, on average getting 25mpg, requiring 8000 gallons of fuel. Those 8000 gallons required importation of 190 barrels of oil (yes I know you don’t get perfect conversion of crude oil to gasoline - I’m just too lazy to look it up), at $60/barrel = $11,400). Using this logic, a subsidy of <$11,400 per electric car made sense even if the cars were made in Japan or Korea. Each electric car resulted in US not importing $11,400 of oil from a country we were previously extorted by. But now that the US is a net oil producer, the equation isn’t as strong. Yes, an electric car prevents the US from consuming those 190 barrels domestically and provides for greater exports, but we are no longer economically dependent upon the other oil producers. The macro economic policy that should result in lower fossil fuel subsidies should also result in lower electric car subsidies. Of course Hubbert’s Peak does still apply to individual wells (and it will again even after fracking) and the US could slip into a net importer again. Electric cars shelter the US from the shock of a future oil embargoes and subsidies should remain (even above the 200,000 limit per auto manufacturer) until Electric cars are competitive without subsidies (I’m taking Carolla class, not BMW 7-Series).

Now, how does wind and solar have the same geo political benefit? We can always burn coal or build nukes. Subsidies to those industries are dependent upon the assumption of investing to prevent climate change. It doesn’t have an immediate economic benefit to me. As much as I believe in climate change, I expect the worst impact in my lifetime is a higher AC bill. Without children, why would I care?


I think both are true. Climate change is happening, and it’s also being promoted to make money for various green causes.


That’s because he reads different media:

https://www.breitbart.com/environment/2019/09/20/nolte-clima...


Ding ding ding. That’s exactly what he was quoting. So, how does one counter this?


With more effort than it's probably reasonable to expect, and they probably wouldn't keep listening anyway.

To pick one as I happen to remember it. 500 days before climate chaos. IIRC that was some French minister, or delegate 500 and something days before the Paris 2015 climate summit. It got a fair bit of press, and was making a reasonable point. 500 days to make adequate agreement in the summit or lock in the train to chaos as the plan to reduce won't work. Not that chaos arrives on day 501.

All those Arctic ice free probably miss the second half of the sentence that's "in summer", or in the coming fifty years etc.

If they're going to cherry pick that disingenuously they can "prove" black is white.


Spend a few days reading the scientific reports at ipcc.ch and see if you are still skeptic.


I hope they have serious money in nuclear, because nuclear is the straightest path away from carbon-heavy energy. It works well, and it works for a very long time (like 50-60 years or more - we will have fusion by the time those power plants are decommissioned). And now we can build power plants which physically can't blow up because they are unpressurized (sodium coolant) and there's no water in the system to produce hydrogen.


10 billion and 10 years a nuclear reactor, if that doesn't turn into 30 billion and 20 years before abandoning it. Which has already happened.


Related: Warren Buffett is investing $30B into wind farms. Not to help his conscience ;) https://www.betterworldsolutions.eu/warren-buffett-spends-bi...


Caution: spammy website, and this was back in 2014: https://www.utilitydive.com/news/warren-buffett-to-keep-bett...


Capitalism is not going to fix climate change.

This has to be a government-driven manhattan-project/moon-shot/new deal-project where no profit motive is involved at all.


I think that we should take what we can get. I'm not opposed to what you're saying working, but it's almost certainly not going to work. You have to align incentives.


A new book asserts that rich countries grow with lighter environmental impacts

https://news.ycombinator.com/item?id=20669465


By relocation all the most devastating envirnmental impacts of their unsustainable consumption feeding industry to poorer countries?


I haven't read the book, but on a more microeconomic scale, businesses that produce more trash have lower profit margins.

This is a very well known phenomenon and gets used to make a business case for doing the right thing out of enlightened self interest: Don't do it for some nebulous sense of virtue. Do it to fatten your bottom line.

In restaurants and catering businesses, profit margins are so slim that upgrading to lightbulbs and appliances that use less energy can put a business in the black that has been struggling.


Reference needed. This is 100% contrary to my experiences in contacts with businesses, as most (not all, typical exceptions are those that either are semi-charities or some that have made ecology the focus of their brand identity, although the latter contain a group that strongly depends on greenwashing vs actual environmental action) will cut every corner on regulation that tries to price in some of the negative externalities and then some.


How Your Business Can Cut Costs by Reducing Waste

https://content.ces.ncsu.edu/how-your-business-can-cut-costs...

Does Corporate Social Responsibility Increase Profits?

https://business-ethics.com/2015/05/05/does-corporate-social...

Good business: Why placing ethics over profits pays off

https://www.philips.com/a-w/about/news/archive/blogs/innovat...

5 Simple Ways to Improve Your Profit Margins

https://www.inc.com/david-finkel/5-simple-ways-to-improve-yo...

Top 10 Energy Conservation Tips for Restaurants

https://www.webstaurantstore.com/article/141/energy-conserva...

Of all commercial buildings, restaurants use the highest amount of energy per square metre. In fact, UK Power and the Family Hospitality Group estimate that anywhere between 5 to 15% of a restaurant’s total expenditure can be taken up by energy alone!

Considering that the average profit margin of a full-service restaurant is usually less than 10% of gross revenue – energy consumption suddenly becomes a BIG financial concern.

https://www.dexma.com/energy-efficiency-in-restaurants-pubs/


We had an article just yesterday titled "Solar and Wind Power So Cheap They’re Outgrowing Subsidies" and there is no reason to believe they are going to reach parity with fossil fuels then stop improving.

Why don't you think capitalism is going to fix climate change? If clean is cheaper, the capitalists will be using it. With gusto.

If prices reach parity, then the whole economic system will basically go into autopilot using & improving the technology, let alone the influence all the private interest groups who want research into clean tech.


"There's no competitive advantage in saving the planet." Capitalists will always externalize costs if they can. Sometimes that means bribing politicians to change the rules or look the other way.

It's very nice that solar panels are getting cheap, but electricity production is only one of many problems that we're facing. Like overfishing, for example. There's profit to be made by dragging that last fish out of the ocean, y'know.


> Like overfishing, for example. There's profit to be made by dragging that last fish out of the ocean, y'know.

Of course not, markets don't work without property rights. But there is money on banning high-sea fishing so you can sell more of your farmed fish (and help the environment as a side-effect), and some companies are pushing for that.


"Capitalism is not going to fix climate change" is the same as "(any other favorite ideology of your choice) is not going to fix climate change".

No ideology cannot fix anything.

Only people can fix things. People fix things they really care about enough to want to fix them. If people don't care about global warming enough to do real steps, no ideology will fix it.

And honestly, we have so many other problems, like obesity explosion, need for retirement reform, need for education reform, potential end of antibiotics, etc. that I am glad that people do care about other things too.


Except that the instrument of abstinence is not a possible solution under capitalism.


Why not both?


Capitalism is a tool/system. If you give it the right incentives eg. carbon pricing it does good stuff. If not it can do bad stuff.


Either way massive projects like the Manhattan and Apollo projects were made possible by capitalism.


If i were feeling glib, i might say something like:

> File under: "duh"

However, I think it's important to recognize that just because this shocking headline might be true, doesn't mean that capitalism is necessarily incompatible with conservation & environmental stewardship.


I think conservation and stewardship is only very loosely coupled with economic system. No form of economics that I know has been inherently better for conservation. In all economic systems taking shortcuts is the easy way.


As someone who is actively looking for things in this space to invest in and to determine whether it makes sense at all, I can only say that so far it doesn't look good.

There are a bunch of problems with the fundamental analysis of the problem, but even if we all magically agreed that climate change was the biggest threat to humanity then the real problem is in the solutions.

Energy is a physics not a technology problem.

And the reality is that we haven't had any major scientific breakthroughs in this space since fossil fuels and nuclear.

Almost all of modern society is depending on them and there is no new fundamental scientific discoveries to replace them anytime soon.

I have sat in on countless plastic alternative presentations only to discover that while it might work in a lab it won't scale and it's only for a fraction of the things you can use plastic for. Plastic gives us everything from as hard as diamond to as soft as spiderweb. No other materical does that.

When it comes to energy there are currently three potential solutions worth following with the ability to solve our energy needs and still be green.

Fusion, thorium and fuell cells.

If you want to solve fusion you have to at least try and taggle plasma which means tagging magnets or something similar. In other words you have to make discoveries in completely different fields than the field of fusion itself.

Fuell cells is equally far off and we don't really have a realistic model for how to create them and apply them to ex wind and solar which will be needed to make them even remotely competitive in the bigger game otherwise the realities of their capacity factor is just not going to cut it.

Thorium is the one that seams most feasible but still require a lot of progress to be anywhere close to ready.

In other words I think we will be stuck with fossil fuels for a very very long time and if these climate capitalists were really serious about this they would put the money towards fundamental science instead, the will have a slightly smaller chance of succeeding but if successful their investment will dwarf whatever they can do in the startup space.


Can you clarify what do you mean by "replace"? Are you talking about full replacement for all uses of plastic/fossil fuels (so that we don't have to use them ever again), or are you saying there is no way to replace a significant part of the used plastic/fossil fuel even by selecting specific alternatives for specific uses (like packaging)?


There is no way to replace a significant part of the used plastic/fossil fuel.

We underappreciate how many things fossil fuel can be used for. It's not just fuel and plastic which in itself is extremely valuable. But it's also pesticides, machinery, medicin, chewing gum, sports equipment, textiles, toothpaste, guitar strings, contact lenses, fishing lures and I could go on.

It's so ever present in our daily life that living without it would kill most of us.

Sure there are alternatives to some of this, but we are not even close to having solutions for 99.9% of the uses of plastic today.

With regards to energy then also here it's hard to see the alternatives without fuell cells, thorium or fusion being a reality anytime soon.

I've looked at a lot of different alternative energy forms and while there are some interesting concepts in between I have yet to see something that can compete properly. A lot of Rube Goldberg solutions out there or solutinos that require a complete redevelopment of the very infrastructure we spent 200 years building.

So I am very skeptical but still looking. I am not saying you can't make a good investment on some of them, but whether you can save the world by investing in some of the things I have seen at least is very unrealistic.


> But it's also pesticides, machinery, medicin, chewing gum, sports equipment, textiles, toothpaste, guitar strings, contact lenses, fishing lures and I could go on.

How about adding concrete (coal) and asphalt [0] to that list? A world without fossil fuels would indeed look dramatically different.

[0]: https://en.wikipedia.org/wiki/Asphalt


I doubt many, if any, of those advocating for a move to renewable energy and EVs are calling for a blanket ban on oil for non-combustive uses.

We have alternatives for far, far more than 0.1% of the world's plastic though. We could probably get rid of most of it without a change in our quality of life, or effectiveness of products. Keep the oil for the few uses that can't be easily replaced by other more sustainable sources. Which almost certainly means contact lenses, and assorted medical uses, specialised equipment, some chemicals etc.


We don't have alternatives and those we have are simply not good enough and extremely expensive.

Even if you could replace 10% it wouldn't mean anything.


> Energy is a physics not a technology problem.

There's plenty of energy out there, delivered by the Sun. You just need cheap tech to harvest and store it. Energy is most decidedly a tech problem.

What has moved PV and wind turbines from niche tech to the real deal is production scale. Once production is scaling up, there's plenty of money for research in practical problems.


The energy is spread thin which makes it great for powering a watch or a house but not for actual serial industrial usage which is where our primary energy usage would be.

Energy is not a tech problem, optimizing subpar energy to deliver 5% better when the capacity factor is down at around 20-30 isn't actually solving anything fundamental and our energy usage is a fundamental problem.

The future will need more energy much much more. Wind and solar are linear solutions to an exponential problem.


Wind, solar and batteries can do a lot. Wind and solar are pretty much good enough now, batteries less so but they are improving quite quickly.


I love how people just claim things without the shred of evidence of their claims. Again less than 1% of worlds energy, if thats your definition of a lot well...




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