I like to sail. Many do, especially here in Great Britain: it’s a large, windy island, with craggy coastline, currents, tides – just about any challenge desired by a keen sailor. But regardless of what conditions the sailor seeks, he/she needs wind. Fortunately, as the saying goes, the wind is free.
However, when you ask a sailor whether his/her hobby is free, you will hear a laugh. While the wind might indeed be free, “green”, “renewable” and “zero-carbon” for that matter, everything else about sailing costs money and has questionable “green” credentials.
Back in the day, the Cutty Sark and other large tea clippers were just as fast as their steamship rivals. But they weren’t as reliable. Were the wind always to do the right thing, blowing strongly, steadily and predictably, there would have been no need to replace the mighty, wind-powered clippers with steamships. But the vagaries of wind and sea being as they are, the Cutty Sark now resides permanently parked in Greenwich, rather than majestically plying the high seas.
I find sailing a useful analogy for the purported benefits of supposedly “green”, “renewable”, or “zero-carbon” energy. Sure, the wind itself might be free, but it is also expensive and unreliable as a source of energy.
Wind power might even be a source of fraud.
So-called “greenwashing” – the false presentation of a company or organisation as having far better green credentials than it really does – is a very real phenomenon that has been going on for years: this is something that several high-profile documentaries have recently made plain. Attempts are now being made to draw up standards for evaluating and certifying green claims. However, one wonders how effective they will be in practice, or whether they will ever be earnestly enforced by regulators who might have financial or other incentives to turn a blind eye from time to time.
In any case, we don’t know how the green energy revolution will play out, or perhaps peter out. Who knows?
Perhaps a new, green, renewable, miraculous source of power lies undiscovered, right around the corner. Clean, cold nuclear fusion, perhaps? A means by which to scale the experimental tidal turbines recently submerged in the Firth of Forth, up in Scotland? A breakthrough in geothermal steam extraction?
Technology is a miraculous thing, something to which the rich history of human ingenuity clearly attests.
Any one of a number of technologies might provide a means whereby a wholesale shift away from fossil fuels could occur. That shift would be one without the potentially horrific economic implications of simply going “cold turkey” to zero-carbon emissions – as so many politicians promise, admonish and outright threaten these days.
That’s right: The one thing we absolutely do know is that, if by 2030 or 2050, or whatever arbitrary date is chosen, those in charge decide to pull the carbon plug, the world is going to go dark. REALLY dark. And not only at night: black markets in fossil fuels – coal, petrol, etc – will become as if not more widespread than they were in the former Soviet Union, subject as they were to strict rationing and price controls.
No, the fact is that, humans being human, we need and want to consume energy. We will take it in whatever cheap and available form it presents itself. Today, that means primarily coal, gas, or nuclear. Sure, in our cities, we might increasingly use stored coal, gas or nuclear energy in the form of batteries. But we should be under no illusions from where battery energy really originates.
It is well-known that the developed world imports the bulk of its manufactured intermediate or final consumption goods from China, India and various other emerging markets that run primarily on coal and nuclear base power. That is not going to change anytime soon.
Essentially unaccountable virtue-signalling on the part of Western politicians does not change reality, nor will it. Yes, they can make absurd promises all they like – they are politicians after all – but the idea that diesel-powered tractors are going to stop ploughing the fields by 2050 or whenever is just complete nonsense. OK, a growing portion of those tractors might be battery-powered, although I doubt it.
But even if the tractors are battery powered, what is going to power battery production? What is going to charge them? What is going to dispose of them, given that batteries are highly toxic substances that can’t just be chucked into landfill without severe consequences for local ecosystems (i.e. on the agricultural health of the land they were created to till in the first place)?
Coal, gas or nuclear. Take your pick. There isn’t currently another choice. And for all we know, during the remainder of our investing lifetimes, there might not be. Prudent, forward-thinking investors should be involved in all three.
However, for all the above disparagement, by all means also consider selective, targeted investments in “green”, “renewable” and “zero-carbon” energy. They’re a great way to hoover up government subsidies – your taxes.
This is while we are all waiting for politicians to eventually backpedal on their frequently ridiculous, entirely unscientific claims that somehow we’re going to be able to feed, clothe and warm ourselves with batteries charged by some as-yet undiscovered source of cheap base power. And who knows? Some of them might, just might, actually work.
But I’m not holding my CO2.
Author, The Golden Revolution, Revisited