https://www.nationalreview.com/2021/02/the-green-bubble/
"Like many of the asset-price bubbles of our current moment, this (green bubble) one is not entirely irrational.
Not only are green assets being “revalued” (to use a term that implies rather more calculation than is really the case) in the light of the general mis-pricing of risk that is the product of today’s artificially low interest rates, but, as I have noted before, buying green is supported by some arguments that have little to do with value, but a great deal to do with price.
There are, of course, those investors who believe that the climate “crisis” is sufficiently imminent that companies focused on staving off this apocalypse must be on to a winner.
Clearer-eyed buyers ... have noticed the immense emphasis that numerous governments are putting on climate change, emphasis that is creating a flow of money, much of it from taxpayers or extorted consumers, that will benefit businesses in the sector.
Other asset managers are busy greening their portfolios in an attempt to attract investment from “socially responsible” investors, who, for good or bad (spoiler: mostly bad) now represent an increasingly important segment of the market.
Funds that invest according to environmental, social and governance principles (ESG) ... growing public awareness of the climate crisis is turbocharging sales of ESG funds.
... Some comparisons (inevitably) are being made with the dot-com bubble. Say what you will about that era, which featured way too much investment in absurdity, its defining feature was the appeal of the uses that could be made of a technology that represented a net step forward.
Bjorn Lomborg, writing in the New York Post:
" ... The UN Climate Panel finds that if we do nothing, the total impact of climate in the 2070s will be equivalent to reducing incomes by 0.2-2 percent.
Given that by then, each person is expected to be 363 percent as rich as today, climate change means we will “only” be 356 percent as rich.
Not the end of the world.
And a richer world will be much better equipped to deal with the effects of climate change than the world that those steering climate policy now seem set on creating — a grim, poorer, supervised place."
... Most voters aren’t willing to pay for these extravagant climate policies.
While Biden proposes spending the equivalent of $1,500 per American per year, a recent Washington Post survey showed that more than half the population was unwilling to pay even $24.
And for what?
If all the rich countries in the world were to cut their carbon emissions to zero tomorrow and for the rest of the century, the effort would make an almost unnoticeable reduction in temperatures by 2100.
And this (from the Financial Times) is not a particularly reassuring development for investors either:
" Move over earnings per share. Board directors are now under greater pressure to consider issues from climate change to diversity when deciding on the size of bonuses for company chiefs."
... The “green” policy in Germany has doubled bills for households while the price of wholesale generation fell, and in 2017 it still had over 52% of its electricity mix and 88% of primary energy consumption from fossil fuels.
The German “energiewende” has already cost more than 243 billion euro between taxes and “renewable subsidies” since 2000, and greenhouse gas emissions are almost flat since 2009.
Even worse, the impact of net job creation in the energy sector has been negative.
The best technological tool to improve the environment is a combination of natural gas, nuclear, hydro, and renewable energy.
But renewables are intermittent, while consumption is continuous.
We cannot forget the billions required in grid connections and support to maintain an intermittent and volatile mix.
... Energy is the cornerstone of the future of any nation.
... As for examples of how the green bubble is manifesting itself, just open the financial press and take your pick.
Electric vehicles!
SPACs that are going to invest in electric vehicles!
Electric air taxis!
And there are plenty more to choose from, including this doubly enlightening example, “doubly” because many climate warriors, at least those in government, like to claim that market-based solutions will provide many of the answers to the solution.
... Decarbonization on the scale and at the pace planned by the EU, U.K., and, doubtless, Biden’s U.S., cannot be achieved within a conventional free-market framework.
What lies ahead is a high degree of central planning and the regulatory onslaught that will inevitably come with it.
That will certainly represent rich pickings for the more skillful or well-connected rent-seekers, but it is not, to put it mildly, an ideal environment for investors.
... I am sure the future belongs to clean energy.
But then so, too, in the late 1990s did the future belong to the internet.
That didn’t, however, mean there was much of a future for the many dotcom companies whose shares were being bought up willy-nilly by eager investors.
A few of those companies survived and thrived and have become the giants of today.
Most went bust.
I don’t doubt the same will be true of clean energy companies.
A few of those whose shares have been booming in recent months will become the big players; most will go under.
And it will be anyone’s guess which will be which."