Friday Haymaker
Climate Conundrum
“We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert.” -Robert Oppenheimer.
“Bad religion is arrogant, self-righteous, dogmatic and intolerant. And so is bad science. But unlike religious fundamentalists, scientific fundamentalists do not realize that their opinions are based on faith. They think they know the truth.” -Rupert Sheldrake, Author of The Science Delusion
(Note: We have included pull-out quotes, in bold font between key paragraphs, for those preferring the ultimate speed-read.)
Questions That Trouble Me So
Western policymakers have faced two immense challenges in recent years. One was, of course, the pandemic which came out of the blue... or, perhaps, the red, as in China. The second was, and is, climate change, which has been a much more slowly evolving perceived threat to humanity. (The wars in Ukraine and Gaza are, of course, also extremely fraught.)
It’s not being harsh to say when it came to the first, the powers-that-be did not cover themselves in glory. Rather than listening to a wide range of experts — and, in some cases, their own early advice — they instituted almost instantaneous and full lockdowns. Countries like Sweden and American states like Florida, which adopted a less draconian set of responses, were ridiculed. Dissenting views, such as the Great Barrington Declaration — signed by thousands of doctors, scientists and epidemiologists — were either vilified or ignored, if not both.
Yet, those advocating a natural immunity response, for the lower-risk populace, have been vindicated with the passage of time. (Please see the link at the end of this note.) As a result, those in the halls of power throughout the West are viewed with varying levels of distrust by a large percentage of their citizens. Perhaps it’s just me, though I doubt it, but the echoes of that episode are reverberating louder and louder these days. As was the case with the pandemic, even experts who disagree with the official climate change/global warming narrative (frankly, I’m not sure which it is), are quickly debunked and ridiculed. To be labeled a Climate Change Denier is the modern-day equivalent of The Scarlet Letter.
… those in the halls of power throughout the West are viewed with varying levels of distrust by a large percentage of their citizens.
Despite reading thousands of articles and several excellent books on the topic, I am the furthest thing from a climate expert. As many of you recall, I’ve admitted that in the past. Yet, my extensive readings have led me to feel informed enough to ask some pressing questions. Frankly, I don’t think those, and others of a similar nature, are getting nearly the attention they deserve.
To stop burying the lede, as I’m often accused of doing, here are the questions that I think we all have a right to ask:
Is it true that CO2 levels have rarely been as low over the last 500 million years as they are today?
Similarly, is it accurate that the earth has been much colder in the past even with far higher CO2 levels?
Chart of Global Temperatures Going Back a Long, Long Time
Is it accurate that CO2 levels follow temperatures rather than the other way around?
Is it possible that much of the warming seen over the last century is a result of emerging from the Little Ice Age that began in the 1500s?
How much of the temperature rises seen in the last 44 years (since the end of the cooling phase that ran from 1940 to 1980) have been a function of urban encroachment near to temperature measurement stations?
How was it that during a time of extremely rapid CO2 increases, the same 1940 to 1980 period, temperatures fell?
What will be the impact of restricting internal combustion engines, as well as natural gas furnaces and stoves, on CO2 emissions when both India and China (representing about 1/3 of the world’s population) are furiously building new coal plants?
Because this is a financial newsletter, my main focus is on markets and those who invest in them. Yet, increasingly, what’s happening in the world of politics impacts asset prices. Not only have Western governments (note the “Western”) funneled trillions into renewable energy, they have also increasingly sought to block — or, least inhibit — investment in fossil fuels. Moreover, until recently, they have been extremely hostile toward nuclear energy. Some, such as policymakers in Germany, remain resolutely anti-nuke.
It's fair to say that both Russia and China relish a West that is being ripped apart by internal dissension over racial inequalities, antisemitism, inequitable wealth distribution, and sexual orientation, among other divisive issues. However, it is also nearly certain that Moscow and Beijing are ecstatic to see the West embracing the most extreme reactions to climate change, as well. With increasing frequency, Western governments seem to be in alignment with the preferences of our geopolitical rivals.
… it is also nearly certain that Moscow and Beijing are ecstatic to see the West embracing the most extreme reactions to climate change…
To that point, opinion suppression tactics are proliferating, at least toward individuals, including experts, who raise any questions about the existential threats of a warming planet. This includes those who inquire as to the cause of what is inarguably a trend of higher temperatures. What is arguable is the rate of those increases and the urgency of the need to abate them.
In case you think I’m exaggerating the move toward squelching dissent among Western populaces on climate change, please consider the legislation pending in Canada. Our neighbor to the North is believed to be a rational bastion of democratic ideals. Nevertheless, one of its most prominent politicians, Charlie Angus, earlier this year introduced a bill that includes this verbiage: “It is prohibited for a person to promote a fossil fuel, a fossil-fuel related brand element or the production of a fossil fuel.” Per National Post’s reporting on the legislation: “Violate this as a regular citizen, and the act prescribes summary conviction and a fine up to $500,000”.
In case you think I’m exaggerating the move toward squelching dissent among Western populaces on climate change, please consider the legislation pending in Canada.
Regular Haymaker readers are aware of my two-part series politely disagreeing with my friend) the enigmatic, but thoroughly readable, Doomberg. (He also advised the Haymaker Team on launching a financial newsletter; therefore, you have him to at least partially blame for what hits your inbox twice a week!) My pushback was in regard to his thesis that there is little risk of the world running out of cheap oil. One of the many reasons for my opinion exchange with him related to exactly the aforementioned governmental hostility to new investments in traditional energy production.
Thankfully, though, Doomberg brought his readers’ attention, including mine, to this alarming proposed Canadian legislation. In his same note, published on March 4th, he warned, with considerable cause: “Soon, critiquing society’s response to climate change will be labeled another form of climate denialism, and efforts to de-platform those expressing such views will accelerate.”
As I have written, and admitted, before, climate change is a fiendishly complex subject. Further, as I’ve conceded, I’m not remotely qualified to analyze the related massive quantities of scientific research and data. Of course, that’s also true of most who write the torrent of articles constantly telling us that the world is virtually on fire.
… climate change is a fiendishly complex subject.
Before I touch on that incendiary topic, there are some realities of which I think we should all be aware. These include the emerging world’s eroding support for eliminating fossil fuels (you really can’t blame them after what Germany has done in terms of resorting to burning coal and wood); the connected fact that there are over 1000 new coal plants in various stages of development around the planet; that China has a vise-grip on many critical green energy in-puts; that it’s in China’s and Russia’s best interest to encourage the West to use more intermittent energy sources and demonize fossil fuels; that America’s air quality has improved 75% over the last 50 years (per the EPA) primarily due to increasingly switching from coal to natural gas; that EVs are not pollution- or carbon-free (their tires are particularly problematic, a topic for another day); that it’s virtually impossible to run a modern industrial economy largely, much less fully, on renewables; that there are 60 new large-scale nuclear plants under construction globally but none in the U.S.; that many of the most dire forecasts about glacier and sea ice melt, as well as snow becoming a rare event, have not come true; to name just a few inconvenient realities. (I’ve done my best to limit the above itemization to hard facts.)
… America’s air quality has improved 75% over the last 50 years (per the EPA) primarily due to increasingly switching from coal to natural gas…
(Note the original publication date: March 20th 2000)
But to repeat, this is not to say the Planet Earth is not warming. It clearly is, but the rate of change is where the debate truly rages… or at least it should. (There is also the issue of how much of that is human-driven, but I’m not sure anyone can opine on that with reasonable accuracy.) It’s the topic of temperatures that is at the core of this Haymaker and another recent article from Doomberg focused on one of my main criticisms with the popular narrative on climate change: the Urban Heat Island Effect.
As I’ve written before, drawing on the temperature records as reported by climate expert Steven Koonin, there has been virtually no warming observed at West Point, New York, over the last century. This is despite being only about 40 miles west of New York City. Conversely, temperatures have risen by about 1¾ degrees centigrade over that timeframe in the city itself. Why would that be?
Back in the 1920s, much of Long Island was rural. Today, it is a concrete jungle. It is both logical and inarguable that cities are much warmer than the countryside. Thus, a century ago, the temperature stations at those outlying locations were not impacted by the Urban Heat Island Effect (UHIE).
Similarly, temperature readings in NYC’s bucolic Central Park are roughly flat since 1940. Another attention-grabber in this regard is that the highest reading in California’s Death Valley was not last summer’s 130 degrees but 134 degrees… set in 1913! By the way, that reading seems to be harder to find on Google than it was a few months ago which leads me to another Doomberg gem.
On April 19th, he once again ventured into dangerous territory when he wrote (Emphasis added):
A hushed secret of the scientific community is that many of the world's top scientists have serious and legitimate questions about the entire construct (my note: of the climate change narrative). They believe much of the experimental modeling work in the field to be shabby at best and the efforts to censor alternative views abhorrent and anti-scientific.
Before you dismiss those explosive words, I’d suggest you click on the link to a new documentary Doomberg highlighted in his recent missive, Climate: The Article. As you will soon see, this is a play on the title of the film in question which is a compendium of opinions from more than a dozen scientists and climate experts. You might also note that where Doomberg presents in his piece a helpful summary of the film’s major points, we’ve similarly asked a series of questions (above) geared towards the same end: a better understanding of the subject at hand.
The experts in the film include the aforementioned Steven Koonin, as well as the Nobel-prize winning John Clauser. (Similar to the factoid on Death Valley, where there manifestly is no UHIE, this film might be getting shadow-banned.)
If you do watch this, you will notice a common trait among most of these individuals: they are mostly old enough to be retired. As at least one of them admits, he could never have been this candid if he was still employed in positions reliant on government funding. Several others say pretty much the same thing. Terms like “career suicide” and “taboo” are used to convey the pressure these men and women have been under to roll with the consensus narrative. Again, this is very similar to what happened to the authors of the Great Barrington Declaration. (As another aside, there was a comparable document on climate, the Oregon Petition, which was signed by over 31,000 scientists back in 1998.)
Terms like “career suicide” and “taboo” are used to convey the pressure these men and women have been under to roll with the consensus narrative.
One of those who has dared question the dominant thesis, Roy Spencer, was the former senior scientist for climate at NASA’s Mashall Space Flight Center. Dr. Spencer and his colleague John Christy won NASA’s medal for exceptional scientific achievement due to the pioneering work they did on satellite climate monitoring. Their system launched in 1979, ironically, at the end of a 40-year cooling phase. (By the way, the 1930s remain the hottest decade the U.S. has experienced.) Despite starting at a time of low temperatures, their data indicate a minor amount of warming. Importantly, this syncs with the studies of other scientists from this film who have sought to isolate temperature readings from rural-only locations.
On the topic of supposedly record-breaking temperatures and a rapidly rising series of hurricanes, wildfires and droughts, we’ve also included a link to a document from the Global Warming Policy Foundation. It is comprised of myriad articles going back as far as 1900. As you’ll see, most of these are from the scorching 1930s.
Frankly, I was reluctant to write this Haymaker, but I was emboldened by Doomberg’s courage. Actually, it shouldn’t take bravery to merely ask important questions and cite the work of qualified experts. But, sadly, that’s the world in which we live. Challenging the official narrative has become dangerous to one’s career. But, like most of the scientists in Climate: The Movie, I’m too old to worry about that risk.
Challenging the official narrative has become dangerous to one’s career.
Now, could the experts in that film be wrong and the majority of the scientific community be correct? Absolutely! But I do think it’s important to recognize the potential for opinion and data corruption due to the trillions of dollars involved. Most of all, it’s crucial to consider observable facts, comparing those to climate models and the plethora of doomsday predictions made long ago that have clearly not aged well.
Video: Fox Business
Torepeat, this is not to say the Earth isn’t warming. It is, even using temperature readings that are not impacted by human development. But it’s not nearly as much as we are constantly led to believe. The obsession about CO2 may be, as I’ve written before, not just shooting behind the duck but shooting at the wrong duck. To ask another similar question, would it be a better use of the trillions the West is now spending on trying to eliminate CO2, a non-pollutant, versus attempting to reduce truly noxious emissions such as those that are generated by burning coal and wood? Or to fund efforts to reduce plastic being dumped into rivers and, eventually, oceans?
It is, even using temperature readings that are not impacted by human development, just not nearly as much as we are constantly led to believe.
Additionally, even a small fraction of those massive expenditures directed toward accelerating the development of next generation nuclear reactors, with greatly improved safety characteristics, strikes me as a much better use of capital. It’s even possible that these, like Molten Salt Reactors, can run on spent nuclear fuel, currently stored around the country, mostly at nuke sites, and a source of great consternation to nuclear energy opponents. At this point, spent fuel is more expensive but the societal cost/benefit analysis is attractive, particularly should uranium prices continue soaring. If it doesn’t make such a pivot, the West is at great risk of being left way behind in nuclear energy development, particularly by China and Russia. (Luckily, certain of our allies, like South Korea, are doing much better in that regard.)
Will there ever be a thorough and balanced debate about the impacts of CO2, as well as if temperatures are truly rising at a dangerous rate? At this point, that seems unlikely. However, unless dissenting voices can be totally suppressed — which, fortunately, is equally improbable — a growing percentage of the Western populace is likely to become increasingly restive.
Hopefully, their anger will manifest itself through the voting process, which is currently happening in a number of European countries where “energy poverty” has become a much more existential threat than it is in America. (However, some states are doing their best to create similar conditions, in addition to rendering the electricity grid unreliable). This is creating a shift to more populist European parties which, typically, are far less inclined to eliminate fossil fuels. Candidly, the extreme rightward shift worries me as much as the leftward lurch that has been in place for at least the last decade.
Ending this Haymaker on an investment note, all of the above has mammoth implications for financial markets. This is particularly true with inflation where the Great Green Energy Transition (GGET) creates a powerful upward push on consumer prices. The related “greenflation” is a result of, as an example, requiring natural gas back-up for intermittent renewables (for when the wind doesn’t blow or the sun doesn’t shine). As a result, two power sources are needed instead of one. The increasing restrictions on oil and gas production, as well as on the pipelines to transport them, is nearly certain to dramatically increase energy costs over time. The surge in AI-driven electricity demand, which may go exponential, is another upward pressure on energy prices. That’s a good thing in the eyes of the global warming coalition but consumers tend to view this much less favorably. In my mind, what looms as the most likely catalyst of a violent fracturing of America is the continuing assault on affordable energy.
If I’m right, it’s essential for investors to generally avoid long-term bonds (there will be some trading opportunities, however). Scarce resources that are critical for the GGET, like copper and silver, should be well represented in portfolios, because the momentum behind that shift is so powerful. Unfortunately, most investors have precious little of those, as well as other precious metals like gold, platinum and palladium.
Oil and gas demand is likely to continue increasing in the developing world. With supply being politically restrained in the U.S., that’s long-term bullish for energy pricing. Soaring production costs are another buoyant factor for oil prices. Last month, the Dallas Fed raised their estimate of marginal production costs in the mighty Permian Basin to $70/barrel, not far below where crude is presently trading.
Despite all of these supporting factors, investor apathy, bordering on antipathy, toward commodities, especially fossil fuels, remains the dominant mindset. With the energy sector having outperformed even technology since the Covid lows, this has been a costly attitude. In my view, the performance penalty of avoiding this essential sector is likely to increase going forward… much to the chagrin of those who have been greatly desiring — and exaggerating — its demise.
Climate: The Movie
Haymaker Note: We’re trying to drive more attention to this film and to the more balanced version of the climate debate it offers — consider forwarding the link and this article to others.
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Earth is in the Holocene, an interglacial..glaciers retreat, ocean levels rise and the planet warms. Its been 12k years and at some point glaciation will begin again and glaciers will return. The sun mostly drive these cycles and yes CO2 levels at 440ppm are quite low based on past history. At 180ppm everything on the planet starts to die.
Great piece, and I appreciate you devoting time to this subject. People far less informed than you have stronger (and wrong-er) opinions about climate. Even if the climate is warming, it's not clear why that's bad for us other than the models say it is. One big volcanic eruption could have a greater effect than thousands of years of civilization.
Yet our governments and government cut-outs (all those "experts" that depend on funding from our tax dollars) continue to fund the least effective solutions to whatever they think is coming, and the markets just follow the money. There will be a reckoning and a sudden shift back to those old reliable sources. In fact, it is happening now, just not in the West.