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« I have a computer model | Main | Paterson urges pause for thought »
Sunday
Oct122014

The Old Lady of Eco Street

The Governor of the Bank of England, Mark Carney first came to the attention of BH readers when, at the time of his appointment, it was noted that his wife Diana was (and is) a fervent supporter of the green movement (and redistribution as well as being against conspicuous consumption).

It's therefore interesting to read today that Mr Carney has told a World Bank seminar that fossil fuels must remain unused:

Mark Carney has re-emphasised his support for the idea that oil companies’ reserves could be stranded assets – still valued by investors, but ultimately going to embody losses.

“The vast majority of reserves are unburnable,” the Bank of England governor said – if the world is to avoid catastrophic climate change.

Thinking of hydrocarbon deposits as stranded assets has gained prominence in recent years, helped by movements like the US student drive to persuade university endowments to disinvest from fossil fuel companies.

Apparently Mr Carney wants companies to report more holistically on their business strategy and "how it relates to stakeholders of all kinds, now and in the future...[so that] all groups can express their view, and influence the allocation of capital and credit today".

Given Mrs Carney's views on equality, and Mr Carney's views on outsiders giving their opinions on allocation of private assets, could the Carney family please allocate some of their (considerable) capital to mine?

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Reader Comments (44)

Good luck with that. Hello* will suffer extreme negative warming before that will happen.
[Hell? BH]

Oct 12, 2014 at 9:36 PM | Unregistered CommenterWJohn

For nearly two decades the CO2 in the atmosphere has skyrocketed while temperatures have remained flat or even declined. Yet this politician thinks that we must make energy costs skyrocket by not burning oil. One wonders how they become so delusional.

Since the escalation in energy prices always hurts the poor the most, perhaps they just hate the underclass?

Oct 12, 2014 at 9:42 PM | Unregistered CommenterMark Stoval

Let future stakeholders express their views. As time travelers they may have some good tips.
============

Oct 12, 2014 at 9:44 PM | Unregistered Commenterkim

And this bloke's in charge of the BoE?

Oct 12, 2014 at 9:45 PM | Unregistered CommenterAdam Gallon

The irony of the richest in our society deciding everyone else should remain poor is not subject to the Carney family alone. The Goldsmiths are among the richest families on earth, with money made from minerals and even the PM's millionnaire wife is very green. The outgoing Governor was annoyed that such a key post had gone to a Canadian,but he was Osborne's choice and he is supposed to be the clever one! This is very much a case of keeping everyone in their place.

Oct 12, 2014 at 9:48 PM | Unregistered Commentertrefjon

"Climate science indicates that if the world is to cut CO2 emissions enough to avoid disastrous global warming, all the world’s already discovered oil reserves cannot be burnt."

Ah, "climate science indicates..."

http://youtu.be/V2AYpGmSfyQ

Oct 12, 2014 at 9:52 PM | Unregistered Commenternot banned yet

Husbands doing what their wives tell them ?
Next you'll be telling us that Samantha Sheffield and Miriam Gonzalez Durantez are able to exert undue influence.
Heaven forfend !

Oct 12, 2014 at 9:54 PM | Unregistered Commentertoad

The link is well worth a read between the lines. What I read was; Oil profits are illusory because of "costs companies are exposed to as policy responds...." that is to say governments tax and rig markets! "the vast majority of reserves are unburnable.... * - well they certainly are at $50 pb but that is going to take quite an intervention.
A like the idea of six kinds of capital -only two of which produce returns.
Considering also the recent announcement by Rockefeller Bros.the message I hear is Sell profitable oil & gas at any price and buy renewables whose returns depends on subsidies the treasuries can no longer afford - and this from the Bank of England.
Sorry bit skint at the moment - last time I was in NYC I bought a bridge over the East River.

Oct 12, 2014 at 10:16 PM | Unregistered Commenterdiogenese2

see, there will be a peak oil....!

Oct 12, 2014 at 10:20 PM | Unregistered Commenterlemiere

diogenese2 - yes, I thought the linked article well worth a read too. This struck me:

"Carney became interested in integrated reporting partly because of an initiative called the Enhanced Disclosure Task Force. This private sector venture, begun in 2011 by the Financial Stability Board, was a collaboration between banks, investors and rating agencies to “do the right thing”, in the words of Russell Picot, group chief accounting officer at HSBC – by providing higher quality and more relevant information about banks, in a bid to restore trust in them."

Especially in the context of another recent news story on financial reporting:

http://www.dailymail.co.uk/news/article-2765912/Bank-England-delays-releasing-expenses-1m-year-governor-second-time-despite-pledge-improve-transparency.html

Oct 12, 2014 at 10:29 PM | Unregistered Commenternot banned yet

Future stakeholders expressing their views today?

Oct 12, 2014 at 10:39 PM | Registered Commenteromnologos

Toad, it is strange that, wives in the green camp parties follow green agenda - I wonder who wears the trousers?

Oct 12, 2014 at 10:43 PM | Unregistered Commenterivan

Is he merely another weak-minded victim of the scaremongering? There seems to be plenty of them around in high places.
Or is he gearing up to be an active promoter of 'the cause'?
Or does he merely sense a political or financial wind that he can exploit for some purpose?
Or can he really just be looking for a quieter life at home?
Or is he getting interested in the occult, and wants to hear voices from the future to tell him what to do today?
Perhaps in this foolish stepping over the mark, he reveals boredom with his current job?

I'm inclined to a mix of all of these. His next place of employment will be informative about this.

Oct 12, 2014 at 10:47 PM | Registered CommenterJohn Shade

Plastics, Mr Carney,Plastics. Oil does an awful lot more than just get burned for energy.

For the foreseeable future, that oil is coming out of the ground. Even if we have to suck it out with a straw. Time to get out of the bank-yourself-richer bubble.

Oct 12, 2014 at 11:00 PM | Unregistered Commentermichael hart

If this is the calibre of type they think is capable of running the Bank of England it's no wonder they've stoked up a debt of £1.4 trillion already and rapidly rising. This is the madhouse. I want out, there is literally no hope.

Oct 12, 2014 at 11:38 PM | Unregistered CommenterMartin Reed

What business is it of a governor of the BoE to go public with his personal opinion on a matter wholly unrelated to his job?

It's also worth repeating that the opinion which this (extremely able) man has expressed flies full in the face of all observations of the most recent 20 years. No warming worth a fig despite record CO2 emissions and concrete, real-world proof that currently available renewable technology simply cannot power our developed nation. For renewable energy and so-called catastrophic global warming theory, such observations should amount to 'checkmate'.

It's a quite astonishingly flawed intervention by him.

Oct 12, 2014 at 11:49 PM | Unregistered CommenterCheshirered

Sorry Cheshirered - nothing astonishing flawed about his intervention at all. It is completely par for the course.

Oct 13, 2014 at 12:55 AM | Unregistered Commenternot banned yet

It is evident that this lot is not following their own advice in any manner whatsoever. I even wonder when was the last time they flew commercial rather than on a private jets (if ever in their entire lives). Anyway, when they yap, who is their real audience? The waiters at these events? Their domestic help? One thing is for sure, they are certainly not talking to each other.

Oct 13, 2014 at 1:12 AM | Unregistered CommenterBrute

Oct 12, 2014 at 9:42 PM | Mark Stoval

Why do so many people believe this whole CAGW thing with hardly any evidence to support it and what there is full of inconsistencies. Is it just the whole oil companies are evil thing.

Science tries to explain all the contradictory evidence that exists while religion will try to handwave it away. Why do so many so called 'scientists' fall into the 2nd camp.

Oct 13, 2014 at 1:23 AM | Unregistered CommenterRob Burton

Fanatical idealism is very common amongst bankers. Socialist Worker sells more copies in the City than anywhere else.

Carbon trading could be worth twice that of oil in next decade

The carbon market could become double the size of the vast oil market, according to the new breed of City players who trade greenhouse gas emissions through the EU's emissions trading scheme.

The ETS market may see $3tn (£1.8tn) worth of transactions a year in the next decade or two, according to Andrew Ager, head of emissions trading at Bache Commodities in London, with it even being used as a hedge against falling equities or rising inflation. "It is still a relatively new industry with annual trades of around €300bn every year. But this could grow to around $3tn compared to the $1.5tn market there is for oil," says Ager, who used to be a foreign currencies trader.

The speed of that growth will depend on whether the Copenhagen summit gives a go-ahead for a low-carbon economy, but Ager says whatever happens schemes such as the ETS will expand around the globe.


http://www.guardian.co.uk/environment/2009/nov/29/carbon-trading-market-copenhagen-summit

Oct 13, 2014 at 5:51 AM | Unregistered Commenteresmiff

Great, another eco loon in a position of great power.

No doubt his wife is a friend of SamCam, which is how he got the job.

Oct 13, 2014 at 7:24 AM | Unregistered CommenterSwiss Bob

From the front lines ..


How the People’s Climate March Became a Corporate PR Campaign

The best account I could find is by Canadian journalist Nick Fillmore. He claims the main point will be a carbon pricing scheme. This is one of those corporate-designed scams that in the past has rewarded the worst polluters with the most credits to sell and creates perverse incentives to pollute, because then they can earn money to cut those emissions.


http://www.counterpunch.org/2014/09/19/how-the-peoples-climate-march-became-a-corporate-pr-campaign/

Carbon trading, what a surprise !

Oct 13, 2014 at 7:36 AM | Unregistered Commenteresmiff

Toad

"Husbands doing what their wives tell them ?
Next you'll be telling us that Samantha Sheffield and Miriam Gonzalez Durantez are able to exert undue influence.
Heaven forfend !"

Ever heard the US expression "pussy whipped"?

This might get censored though

Oct 13, 2014 at 8:45 AM | Unregistered CommenterAnother Ian

"Given Mrs Carney's views on equality, and Mr Carney's views on outsiders giving their opinions on allocation of private assets, could the Carney family please allocate some of their (considerable) capital to mine?"

.
No.

Oct 13, 2014 at 9:08 AM | Unregistered Commenterjones

I'm wondering how Mr Carney will get to the G20 summit in Brisbane without oil to fuel his plane.
Or how he's going to print all those plastic banknotes the UK is supposedly about to start using.
Such disconnect in the mind of the governor of the Central Bank of a country with one of the biggest financial centres on earth worries me not a little.

Oct 13, 2014 at 9:15 AM | Registered CommenterMike Jackson

"When the facts change, I change my mind. What do you do, sir?"

Mark Carney will be familiar with the quote above which is commonly attributed to John Maynard Keynes. Has Carney head about "the Pause"? If so, shouldn't he change his mind?

Oct 13, 2014 at 9:28 AM | Unregistered CommenterRoy

It is incredibly dumb of him not to realise that until cars run on something other than petrol then as that becomes scarcer then the oil companies make more money from their assets, not less. Regardless of the environment, and whether cooling or warming is around the corner, the force behind oil consumption is that people want to move around. In the hypothetical case that people can't or are not allowed to move around then investors would have many more worries than their oil stocks because entire economies would be collapsing around their ears.

Oct 13, 2014 at 9:30 AM | Unregistered CommenterJamesG

When someone says they are "thinking holistically," my question is: How can you think holistically about something when you don't even begin to understand >99% of it? (or have the information)

Oct 13, 2014 at 9:54 AM | Unregistered CommenterAllan M

"When the facts change, I change my mind. What do you do, sir?"
A slight flaw in that argument: facts do not change. However, our perceptions or interpretations of the facts might, so the rest of the quote holds good.

What Mr Carney should be reminded of is that it is highly unlikely that, when looking around his office or his living room, he will see anything that is not there either directly or indirectly because of crude oil (i.e. it is made from an oil-based product, or oil-based fuels were used in its creation and transportation). Crude oil is a naturally occurring product, freely available to anyone who wishes to retrieve it; it is as “free” as the wind.

Oct 13, 2014 at 10:22 AM | Registered CommenterRadical Rodent

Truly, we are surrounded by madmen. Just like those past episodes of group madness, everyone will eventually admit to knowing that as well as telling us that they didn't know how to escape from it.
Carney has had clues about Mrs. Carney's perceptions of "value for money"; buying their children's school pencils in bulk to save fourpence, but complaining that their housing allowance of £XX,000 per month is quite inadequate. Of course, the two aren't directly comparable, the housing allowance being paid in that almost infinitely discounted currency of OPMs - "other people's money".

Oct 13, 2014 at 10:57 AM | Unregistered Commentermikespilligan

Should the Governor of the Bank of England be recommending people disinvest in the first and third highest capitalised companies on the stock market? I wonder what Shell and BP think about his interference.

And for this wonderful piece of advice, which can only help further to destroy our economy, we have had to pay him over £1m in his first year.

Oct 13, 2014 at 11:00 AM | Unregistered CommenterColin Porter

It is not his own opinion, it is what he has been fed by people like Stern, a former World Bank Chief Economist. There is of course, lots of money in it for the financial institutions still pushing for a global carbon tax via the UN, thus guaranteeing the profitability of "carbon trading"

It has been promoted for some time by Schellnhuber at Potsdam and harks back to the 2 degree meme, which actually started life in 1975 and appeared in a discussion paper in 1977-9 by economist W.D. Nordhaus. It was picked up by Schellnhuber in 1995 and became the EU "scientific" assessment in 1996, that warming must be limited to 2 deg C to avoid CAGW. (In 1989, the United Nations Advisory Group on Greenhouse Gases was pushing for a one degree limit).

Richard Tol found the science wanting in "Europe’s long-term climate target: A critical evaluation", R.S.J. Tol / Energy Policy 35 (2007) 424–432 425

In order to achieve the two degree meme, there has to be a carbon budget as outlined by Myles Allen and friends in 2009: Vol 458|30 April 2009| doi:10.1038/nature08019, "Towards the Trillionth Tonne"

"....policy targets based on limiting cumulative emissions of carbon dioxide are likely to be more robust to scientific uncertainty than emission-rate or concentration targets. Total anthropogenic emissions of one trillion tonnes of carbon (3.67 trillion tonnes of CO2), about half of which has already been emitted since industrialization began, results in a most likely peak carbon-dioxide induced warming of 2 deg C above pre-industrial temperatures, with a 5–95% confidence interval of 1.3–3.9 deg C."

It is something that people like Kevin Anderson and Richard Betts have also promoted in the series of papers here: http://rsta.royalsocietypublishing.org/content/369/1934.toc, 'Four degrees and beyond: the potential for a global temperature increase of four degrees and its implications' compiled and edited by Mark G. New, Diana M. Liverman, Richard A. Betts, Kevin L. Anderson and Chris C. West, January 13, 2011; 369 (1934)

In 2013, Stern's Grantham Institute teamed up with Jeremy Legget's Carbon Tracker and produced this: carbontracker.live.kiln.it/Unburnable-Carbon-2-Web-Version.pdf

"Unburnable Carbon 2013: Wasted capital and stranded assets"

"The contributors to this report were James Leaton, Nicola Ranger, Bob Ward, Luke Sussams, and Meg Brown. We would like to thank Mark Campanale, Nick Robins, Alice Chapple, Jemma Green, Chris Duffy, Alex Hartridge, and Jeremy Leggett for reviewing the report, PIK Potsdam for assistance in using live.magicc.org"

(Leggett is one -time "Chief Scientist" at Geenpeace and has made a fortune out of Solar Panel subsidies, via his Solar Century company, http://www.theguardian.com/profile/jeremyleggett )

There is a disclaimer,

"Carbon Tracker and the Grantham Research Institute, LSE, are not investment advisers, and make no representation regarding the advisability of investing in any particular company or investment fund or other vehicle. A decision to invest in any such investment fund or other entity should not be made in reliance on any of the statements set forth in this publication. While the organisations have obtained information believed to be reliable, they shall not be liable for any claims or losses of any nature in connection with information contained in this document, including but not limited to, lost profits or punitive or consequential damages."

Stern did some PR for it in this Guardian article: http://www.theguardian.com/environment/2013/apr/19/carbon-bubble-financial-crash-crisis:

"Carbon bubble will plunge the world into another financial crisis – report"

"Trillions of dollars at risk as stock markets inflate value of fossil fuels that may have to remain buried forever, experts warn"

Notice that contributions come from representatives of HSBC, who Stern has been advising on carbon trading since 2008 and Price Waterhouse Cooper, http://www.pwc.co.uk/sustainability-climate-change/publications/

"Jeremy Grantham, a billionaire fund manager who oversees $106bn of assets, said his company was on the verge of pulling out of all coal and unconventional fossil fuels, such as oil from tar sands. "The probability of them running into trouble is too high for me to take that risk as an investor."

No mention for the casual reader of course, that Grantham funds the institute producing the report and could possibly be viewed in some quarters as potentially influencing markets.

Strange that the idea should make another appearance, this time from the mouth of the Governor of the Bank of England, formerly of Goldman Sachs.

Oct 13, 2014 at 11:33 AM | Registered Commenterdennisa

Marginally off-topic but sort of relevant:
I just wonder how Alex Salmond's sums would have worked out now, with Brent Crude at $88/barrel and dropping like a stone, as opposed to the $120/barrel he was working on pre-Scottish-referendum..?

Oct 13, 2014 at 12:37 PM | Unregistered Commentersherlock1

@ Radical Rodent

Facts do change. In the 1980s the statement "the climate is getting warmer" was true. It is not true now. The same argument applies to facts in economics, which is what Keynes had in mind and what Mark Carney is mainly concerned with.

Oct 13, 2014 at 1:53 PM | Unregistered CommenterRoy

I'm sure the Islamic State would be willing to sell us the oil from their captured oil fields in Iraq and Syria in that case.

Oct 13, 2014 at 2:09 PM | Unregistered CommenterJamspid

No, Roy, the facts have not changed: in the 1980s, the climate may have been getting warmer. The fact that the climate might not be getting warmer now does not mean that the fact that the climate was getting warmer in the 1980s is now incorrect. It is your interpretation of the facts that might not be correct – you have transferred a fact from the present and applied it to the 1980s, irrespective of the facts of then. The simple fact is that climates change; in one decade, it might get warmer, in another it might not. The fact of the latter does not negate the fact of the former. A variable might change, but, in changing, the fact of its new condition does not negate the fact of its previous condition.

Oct 13, 2014 at 2:15 PM | Registered CommenterRadical Rodent

Don't worry everyone, Richard Drake told us all that Carney was a great choice to be Governor of the BoE

Oct 13, 2014 at 5:44 PM | Unregistered Commenterdiogenes

Canadians thank the Brits for taking Carney off of our hands.

Oct 13, 2014 at 6:20 PM | Unregistered CommenterRobert Austin

It's a shame Lord Monckton isn't here to accuse Goldman Sachs of fronting a global communist takeover.

Oct 13, 2014 at 10:25 PM | Unregistered Commenteresmiff

Reminds me of Wiliam Ruckelshaus , the first administrator of the US EPA, when faced with the decision about what to do about DDT. The science, as developed by an administrative law judge, said that it did not cause any demonstrable harm. However, Ruckelshaus made his decision to ban it. His wife was a big supporter of the Environmental Defense Fund, which was suing the govt at that time to get it banned.

Women drive civilization. Not always in directions that are logical, rational, or in their own best interests, but they drive civilization.

Oct 14, 2014 at 3:09 AM | Unregistered Commenterrxc

Ms. Carney is not a very bright climate scientist. Nor is she demonstrating any understanding of the energy industry. Or basic economics. Is there any evidence she is better at banking?

Oct 14, 2014 at 11:59 AM | Unregistered Commenterhunter

who started this meme about not burning fossil fuel reserves?

Carney has said it.

and so has Christiana Figueres

are there any others?

Oct 14, 2014 at 4:01 PM | Unregistered Commenterdiogenes

"who started this meme about not burning fossil fuel reserves?"

Not sure, but as dennisa above observes, The Grantham Institute have been pushing the "stranded assets" line for a while:

http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2014/02/PB-unburnable-carbon-2013-wasted-capital-stranded-assets.pdf

Check dennisa's comment for other refs.

Oct 14, 2014 at 4:26 PM | Unregistered Commenternot banned yet

Carney is right in what he said.
If Governments regulate in order to keep CO2 levels low and thus stop fossil fuels being burnt.. then the assets of Oil Companies are greatly marked down. It could happen after Paris.

That is an economic threat. And a threat to all our pensions.

But it isn't a Climate threat. It is a Green Activist threat.

Oct 14, 2014 at 4:59 PM | Unregistered CommenterMCourtney

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