I'm not a denier or an activist when it comes to the subject of climate change, but five years of blogging about investing in the energy storage and electric vehicle sectors has convinced me that self-serving activists and promoters, mathematically challenged politicians and an irresponsible media are cynically selling snake-oil climate change solutions to a gullible public.
The observed CO2 data is unassailable. Atmospheric concentrations have climbed at increasing rates for over a century and show no signs of abating, or for that matter flattening. We've all seen the hockey stick graphs and read countless stories about the computer modeling by activists who stridently insist that their statistical correlations are proof of causation. We've also read equally strident arguments that the activist's models are contrived and their data has been massaged to a point that the statistical correlations are meaningless.
I couldn't care less whether global warming theory is right or wrong because the critical question we should be asking is, "What is causing the increases in global CO2 emissions?"
Activists love to blame the CO2 emissions on the industrialized west and big oil, but the simpler reality is the population of the planet quadrupled over the last century and the sheer mass of humanity is generating more CO2 than the planet can process.
In 2009, a climate change activist who teaches computer science at the University of Toronto created this graph to show that population growth and CO2 emissions are NOT correlated.
He argued, "emissions grew much more sharply than population from 1950 onwards, with the only exceptions being during the economic recessions of the early 1980′s, early 1990′s, and around 2000. Since 2000, emissions have been growing at something close to double the population growth rate."
Give me a break!
I can accept the premise that population growth alone is not enough to account for fine variations in CO2 emissions; but when you factor industrialization trends in North America, Europe, Asia and the rest of the world into the equation, the root cause is undeniable. The culprits are:
- 1 billion humans in industrialized economies where per capita CO2 emissions have been flat or falling for decades; and
- 6 billion humans in developing economies that (a) want to be richer, (b) know a better life is possible because we gave them Internet access, and (c) are working hard to build a brighter future for themselves and their children and grandchildren.
- Per capita CO2 emissions from coal peaked at 7.64 metric tons in 2000 and have fallen by 31% over the last 12 years;
- Per capita CO2 emissions from natural gas peaked at 5.56 metric tons in 1973 and have fallen by 22% over the last 40 years;
- Per capita CO2 emissions from petroleum peaked at 11.46 metric tons in 1978 and have fallen by 37% over the last 35 years; and
- Per capita CO2 emissions from all sources peaked at 22.35 metric tons in 1973 and have fallen by 25% over the last 40 years.
While few dare to speak the truth above a whisper, CO2 emissions aren't climbing because of activities in the industrialized west. They're climbing because billions of humans in developing economies are increasing their carbon footprints as they try to catch up.
The unpleasant but indisputable reality is that every barrel of avoided oil use and every ton of avoided coal use in rich countries will simply increase supplies in poorer countries where another human who has a choice between freezing in the dark or increasing his carbon footprint will pick his comfort and convenience over our climate change worries.
Another unpleasant but equally indisputable reality is that EVs are a little less carbon intensive in the hands of a consumer, but they're extremely carbon intensive to manufacture and recycle. As a result every EV starts out with a massive carbon debt that will take years to amortize through clean driving. When you include the incremental carbon footprint of manufacturing and recycling EVs, they're not significantly cleaner than conventional cars. It's a zero sum game.
If the dire warnings of climate change activists are correct, a topic where I scrupulously avoid expressing an opinion, then humanity is in for a tough time and we'll all have ringside seats to the ultimate tragedy of the commons. Nature will do as it's always done when populations in a species grow beyond sustainable limits. It will ruthlessly cull the herd until balance is restored. While most will find the cull distinctly unpleasant, humanity will either have to evolve or face extinction like every other apex species in the history of the planet.
The First Great Fraud is the idea that individuals in wealthy countries can change anything by putting an electric car in their garage, with or without solar panels on the roof. These are vanity purchases, cute ego boosting symbols that make no meaningful contribution to the common good, the environment or the overall health of the planet. Buyers can make themselves feel virtuous, but senseless symbolism can't make a difference on a planetary scale. It's like trying to fight a hurricane with Depends.
A Second and Greater Fraud is that humanity can produce enough metals to transition even an insignificant fraction its transportation fleet away from oil without diverting technology metals from other critical uses. We may be able to build thousands or even tens of thousands of EVs per year without destroying supply chains. But we can't build millions or tens of millions of EVs per year without a couple extra planets to provide the required raw metals.
The common thread in every alternative energy scheme is manufacturing machines that replace a superior energy resource with an inferior resource. Since alternatives are always more costly, the promoter's playbook never changes - demonize the superior energy resource with half-truths and pseudo-science to justify higher costs. All time favorites include:
- Protecting the planet's oil resources from imminent and catastrophic depletion;
- Protecting the planet's atmosphere by reducing CO2 emissions in wealthy countries;
- Promoting energy independence through natural resource diversity; and
- Rationalizing the massive front-end natural resource costs with the magic incantation, "recycling," which is far easier to say than it is to do.
The claims are inspiring and they fire the imagination, but they're utterly devoid of technical and economic merit.
Last year the planet produced 14,000 million tons of hydrocarbons; 2,600 million tons of iron and steel; and 140 million tons of all other metals combined. For critical technology metals including rare earths, cobalt, tungsten, vanadium, lithium and cadmium, annual production rates of less than 100,000 tons are the rule. While the oil industry has a long history of developing new resources in godforsaken places like the arctic and deep water, commercial mining activities can only be conducted on dry land and in relatively temperate climates. The billions of dollars in infrastructure costs to develop a new mine in the middle of nowhere are beyond imagining.
In a world where one billion people want to keep consuming at current rates and six billion more want to increase their consumption, supplies of ALL natural resources are constrained. We pay attention to oil because most of us buy processed petroleum products several times a month, but the greatest challenge of our age will be overcoming persistent global shortages of water, food, energy and every commodity you can imagine. Humanity is long past the point where we can find and develop enough new natural resources to solve the supply problem.
Whether we like it or not, humanity's only remaining option is to eliminate waste in all its pernicious forms.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.