In Defence of the Climate Change Sceptic (Part 2)

In the 18 July 2019 issue of The Rum Rebellion there was this promise…

What I’ve shared with you today is only some of the climate change ‘claims and counter claims’ I’ve read.

If the IPCC and NASA models are seriously flawed, then the hysteria over climate change has — ironically — been a great waste of energy.

On the other hand, if the models do actually provide ‘true and correct’ readings, then what’s the solution to the problem?

The answer to that question will be the subject of tomorrow’s The Rum Rebellion.

And, for anyone wondering “what’s climate change go to do with economics?”, that question will also be answered.

Unfortunately, a family tragedy prevented me from addressing those questions the following day.

Today we resume the defence of the climate change sceptic.

Is it possible NASA and IPCC are skewing the data to suit an agenda?

Well, officials feeding us false data is hardly a new concept.

The GDP numbers are complete nonsense.

Before falling into severe recession — Japan, Ireland and Spain — were all feted as miracle or booming economies…with year-on-year GDP growth well above the average.

The GDP numbers for these countries were all inflated by excessive levels of private debt…which in the end caused severe economic contraction.

The same holds true for Australia’s record-breaking recession-free run.

Greg Canavan’s Top Two ASX Gold Stocks for 2019

Our nation’s GDP data has been inflated by this very sad and embarrassing fact…

Australia’s household debt is now one of the highest in the world

Business Insider

We’re told positive GDP numbers are a sign of a strong economy. What rubbish. It’s a sign of an economy that’s created a ‘debt rod for its own back’…one that is destined to be a lot weaker.

Unemployment data. Now there’s a joke that’s nearly as laughable as the GDP numbers.

This is straight from the Australian Bureau of Statistics site…

What is the definition of employed?

Employed persons are defined as all persons aged 15 years and over who, during the reference week:

worked for one hour or more for pay, profit, commission or payment in kind, in a job or business or on a farm (comprising employees and owner managers of incorporated or unincorporated enterprises)…

worked for one hour or more without pay in a family business or on a farm (i.e. contributing family workers)

No wonder the official unemployed number is only 5.2%.

Who in their right mind believes this definition constitutes genuine employment?

Yet when the employment numbers come out, the economists pour over the entrails as if these numbers are worthy of dissection. What a waste of time.

Whereas, independent researcher, Roy Morgan — using an ‘employed’ definition that would at least pass the ‘pub test’ — reckons that Australia’s ‘un and under’ employment is over 18%.

The GDP and unemployment models are seriously and deliberately flawed…for political purposes.

The models tell us there’s strength, when in reality there’s weakness. It’s pure propaganda.

And misleading data is not isolated to government agencies.

On 21 July 2019, Fox Sports reported (emphasis is mine)…

A bombshell report has accused Cricket Australia of purposely spruiking inflated participation figures over several years.

Fairfax Media conducted an investigation into CA’s claim that 1.65 million people play cricket annually. A census published by Cricket Australia on June 30 claims one in 15 Australians played the sport last year.

The census reported there were 684,356 registered club cricketers in 2018-18, but Fairfax Media found only 247,060 individual entrants on the MyCricket database.

The governing body’s community cricket chief, Kieran McMillan, admitted the figures were “a guessing game”.

“That’s a danger in all the data,” Mr McMillan said.’

What possible advantage would there be in ‘guessing’ a much higher participation rate? Could it be to bump up sponsorship dollars and/or ad revenue?

But that too is only a guess on my part.

It’s that last line we should all remember…a danger in all the data.

And you wonder why I’m a bona fide sceptic?

Back to the topic of the day. Climate change.

For the purpose of this exercise, I’ll put my scepticism on the NASA and IPCC models to one side.

What if Climate Change Data is Accurate?

Let’s believe/pretend/kid ourselves that the climate change models are 100% accurate…human activity is the greatest contributor to global warming.

What’s the solution?

Reduce CO2 emissions from fossil fuels.

How?

Increase use of renewables.

This is where today’s Rum Rebellion runs a little longer than usual due to the use of several charts.

Around 90% of global energy consumption comes from fossil fuels — coal, crude oil, natural gas.

Global Energy Consumption Climate Change Sceptic

Source: Our World in Data

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Whether we like it or not, renewables are not yet a viable, cost efficient alternative for reliable base load power.

No doubt that as technology improves and costs are lowered, renewables will play a greater role in energy generation…but not in the near term.

Fossil fuels emit over 37 billion tonnes of CO2. It’s this level of emissions we’re being ‘encouraged’ to reduce.

CO2 Emissions by fuel chart

Source: Our World in Data

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Which parts of the globe are consuming the most energy…and emit the most CO2?

Energy Consumption by World Region chart

Source: Our World in Data

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No surprises who the major emitters are.

The prosperous and those with a driving ambition to be prosperous. North America. Europe. Asia Pacific (dominated by China).

And there’s no sign of a reduction in CO2 from two of the biggest emitters.

On 5 December 2018, the Sydney Morning Herald (SMH) reported (emphasis mine):

Carbon emissions from fossil fuel combustion have accelerated, driven higher by a resumption of growth in China and the US, dimming the prospects that climate goals agreed in Paris can be met.

Projected growth of CO2 emissions from fuels and industry will be about 2.7 per cent in 2018, up from 1.6 per cent a year, according to the Global Carbon Project backed by science groups around the world.

And it’s China that pumps out the most CO2 of any nation…

This is from the SMH article…

China, which accounts for about a quarter of the 2018 forecast total of 37 billion tonnes, had relatively stable emissions since 2013. However, revived growth in heavy industry – including steel output rising 6.1 per cent — will propel its overall CO2 emissions 4.7 per cent higher this year to 10.3 billion tonnes.

The resumption of growth in 2018 resulted in China increasing its CO2 emission by around 500 million tonnes.

What’s Australia’s contribution to the CO2 emissions?

On 13 December 2018, The Guardian (a media outlet that leans far more left than right) reported…

Australia’s carbon emissions are again the highest on record, according to new data from the emissions-tracking organisation Ndevr Environmental.

When excluding unreliable land use data, Australia’s emissions for the year to September reached 558.3m tonnes of carbon dioxide equivalent, an all-time high.

Even if we went back to the Stone Age, our nation’s supreme sacrifice would be in vain.

Within the space of 12 months, China’s increased CO2 output fills the void we’d leave behind.

Ok, the story so far.

If we believe the climate models, then the world is heating up due to our (human) need for fuel and energy.

Whether we like it or not, we’re heavily reliant on fossil fuels to power up our modern world. Renewables are not yet up to the task.

Energy consumption — CO2 emissions — has risen dramatically since the 1950’s.

The Reason for an Increase in CO2 Emissions

The reasons for this are many.

The main ones are…

  • Rising global population.
  • Increased industrial production to meet the consumption demands from more people with access to more credit.
  • More households with more appliances needing more power.
  • And, the need for more transportation — cars, trains, buses, trucks, ships (freight and leisure) and planes.

But not all of the world has shared equally in the benefits that come from having a ‘ready and steady’ supply of energy.

If you look back to the chart of ‘Energy Consumption by World Region’, that little sliver of blue at the top is…Africa.

Africa’s energy usage is hugely disproportionate with its current population footprint…and I stress ‘current’.

The Western World (excluding Asia) with less than 1/3rd of the global population consumes more than half the world’s energy output.

The global population (according to UN projections) is expected to increase by nearly 4 billion people by 2100…almost all that population growth is coming from Africa.

World Population by Region

Source: Our World in Data

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What happens to CO2 emissions when Africa eventually joins the global grid?

Perhaps, renewables will be more cost efficient and reliable by then and the question becomes moot. But what about in the coming decade or two?

If we bring our focus back from 2100 to the near term, the following chart is a sobering one.

At present, around 1 billion people in the world do not enjoy what the rest of us take for granted…access to electricity.

Imagine living in a world without our mod cons…fridges, computers, running water, sewage, TVs, electric lighting, washing machines, coffee machine, oven…all the things we take for granted?

World population without electricity

Source: Our World in Data

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No prizes for guessing where the majority of the billion people live…Africa, India and parts of China.

The combination of a steady decrease in the people without access to electricity and the steady increase in global population has contributed to the near vertical increase in co2 emissions.

The cheapest and most reliable source of power for poorer nations comes from coal.

Who are we to be all ‘high and mighty’ and deny our fellow human beings the same basic rights we expect…access to cheap and reliable power?

Those advocating for a reduction in global CO2 emissions are knowingly or unknowingly saying to a billion people ‘I’m alright Jack, bugger you’.

Until renewables become a viable economic alternative, then we’re going to have to learn to live in a world with rising CO2 emissions…especially if Africa ramps up its capacity to generate and supply energy sourced from fossil fuels.

Then again, if the models are flawed and the world is not heating up due to CO2 emissions, all this becomes somewhat academic.

Tomorrow, in the final part of the ‘defence of the sceptic’, we’ll look at how the Western world and China can significantly reduce CO2 emissions…not sure there’ll be too many in favour of this solution.

Stay tuned…

Regards

Vern Gowdie

PS: Which is better – Gold or Bitcoin? In Selva Freigedo’s latest special investor report, you’ll discover which is the better investment for 2019. Download now. 


Vern has been involved in financial planning since 1986. In 1999, Personal Investor magazine ranked Vern as one of Australia’s Top 50 financial planners. His previous firm, Gowdie Financial Planning, was recognised in 2004, 2005, 2006 & 2007, by Independent Financial Adviser magazine as one of the top five financial planning firms in Australia. In 2005, Vern commenced his writing career with the ‘Big Picture’ column for regional newspapers and was a commentator on financial matters for Prime Radio talkback. In 2008, he sold his financial planning firm due to concerns about an impending economic downturn and the impact this would have on the investment industry. In 2013, he joined Port Phillip Publishing as editor of Gowdie Family Wealth. In 2015, his book The End of Australia sold over 20,000 copies and launched his second premium newsletter, The Gowdie Letter. Vern has since published two other books, A Parents Gift of Knowledge, all about the passing of investing intelligence from father to daughter, and How Much Bull can Investors Bear, an expose on the investment industry’s smoke and mirrors. His contrarian views often place him at odds with the financial planning profession today, but Vern’s sole motivation is to help investors like you to protect their own and their family’s wealth.


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