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Gary Hunt

Gary Hunt

Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a…

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Inconvenient Truths Not Spoken About at Doha

Inconvenient Truths Not Spoken About at Doha

The Doha climate change conference concluded this week with what has become a familiar ring.  Nothing much of import happened and increasingly fewer people noticed.  Oh, the issues at the surface are still the same as they have been since they first flamed out in 2009 at Copenhagen.  These events have become a global debate over wealth redistribution with the poorer countries trying to guilt the richer ones into paying them not to pollute their own backyards—-and if that is not silly enough trying to get the first world nations to pay reparations to the third world for their economic success.

This year the crisis was the looming expiration of the Kyoto Protocol at the end of 2012.  That event officially removed the rationale for these annual charades since the obligations the first world made to support the climate issues of the third world officially expire.  Since the expiration of Kyoto would end the necessity of further conferences, of course, the delegates decided to extend the expiration date to 2020.  This is the great achievement of this conference—an agreement to continue the debate and meet annually in exotic locations spending other people’s money.

Yes, I know, I am making fun of this event.  But you must admit there are some inconvenient truths that are not spoken in polite climate change company such as:

•    The global economic situation is not good and few nations feel rich enough to take on the burden of subsidizing the rest.  The EU has Greece, Spain, Italy, Portugal and Ireland and a few other piglets to worry about.
•    The first world stepped up and pledged support for climate improvements but many of the fastest growing emerging economies refused to participate—so China, India and others were worried about climate change when they thought the first world would pay them to fix their own problems, but not worried enough about it to fix them on their own?  Please!
•    The US is spending money like a drunken sailor on shore leave with debt and deficits beyond imagination.  Our own fiscal cliff approaches and climate change subsidies to third world countries likely will not be our highest priority.

Related Article: The Doha Climate Joke

And then there is the matter of results.  Japan faced a terrible earthquake and tsunami that damaged its nuclear fleet so it turned away from nuclear to natural gas in the form of LNG at least as a bridge fuel.  The Germans over-reacted and began shutting down their nukes and decided to build more coal fired power plants.  Does this sound like an unwavering commitment to emissions reduction to you?

In the US, the shale revolution is increasing supply and driving down prices in a market that is rapidly being transformed from an import energy economy to an export economy.  Low energy prices are a cardinal sin in the environmental community because they encourage more use of fossil fuels and undermine the economics of most favored renewable energy which cannot yet stand on its own without subsidies.   So imagine the shock and awe to discover that the part of the world with the fastest decline in greenhouse gas emissions is none other than the United States of America!

EGADS!  Markets actually work! A command and control economy is not necessary to produce emissions reduction!

EGADS!!!  How will we enforce our political correctness if markets rationalize capital investment and make changes so fast we cannot build a coalition against them?

EGADS!!!  We didn’t need a cap and trade system of carbon taxes to get this result either!

Markets abhor vacuums even while they profit from uncertainty.  Markets seek equilibrium and will not be denied.  The market forces of self-interest and survival are more powerful and more constructive than any on earth and in today’s anxious global economy rational behavior is working to find its way back to equilibrium and then growth.

Related Article: Climate Change and the Fiscal Cliff Both Lead to the Same Outcome

The dirty little ‘inconvenient truth’ secret from Doha is the global economy is finding its own way back to balance. That market equilibrium will return us to growth and reduce greenhouse gas emissions at one in the same time because the markets have decided to take matters into their own hands and deprive the politicians in every nation of an excuse to spend other people’s money until the entire world goes over a fiscal cliff.

High energy prices may be good for traders and speculators but they are cancer for economic growth.  The markets have decided that the shale revolution is real and it is going to be used to create an era of low energy prices from adequate supply sufficient to get the global economy growing again.

And for Americans in a funk over the fiscal cliff, government spending excess and huge debt and deficits, the government has largely been a bystander as the markets took charge and the shale revolution scaled on private lands, with private investment, and private initiative.  It is so powerful even a president running for re-election who opposed it took credit for the energy production growth.

The low priced shale energy resolution is here and now!  It may not last forever.  It may not be as powerful in other parts of the world where private property rights are weak or geology less favorable.

Who would have thunk it!  Low price energy is leading us to reduced greenhouse gas emissions, a stronger growth-driven economy, and a more secure energy future.  That is an inconvenient truth worth savoring.

By. Gary Hunt

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Leave a comment
  • Mel Tisdale on December 16 2012 said:
    The World Bank, The World Wildlife Fund, The International Energy Agency, the Inter-government Panel on Climate Change and even financial institutions such as Price Waterhouse Cooper are all alarmed by where climate change is headed. Gary Hunt from a company that rejoices in the title 'Snap, Crackle Pop isn't. You decide who to believe, it is, after all, your and your family's future.

    For those undecided, can I suggest watching on YouTube the annual Cabot Lecture given by Professor Kevin Anderson of the Tyndall Centre, hosted by Bristol University (U.K.). The take home message is that we are headed for a four degree Celsius average rise in global temperature by mid-century (five degrees over-land), which is what alarms the World Bank etc. Small wonder when 30,000 people died in the European heat wave of 2003. Imagine what conditions will be like when those heat-wave temperatures are the summer norm and are global. Imagine what life will be like when food production is curtailed by almost half. Professor Anderson’s lecture concludes that four degrees Celsius will be unbearable and is already unavoidable.

    It is highly unlikely that society will continue to function in such elevated temperatures, especially considering just how people will be fed, or rather not fed. We have already experienced food riots in parts of the globe during heatwaves. Would you drive a fuel tanker in times of riot? Would you be allowed to? What value a pension then? How will you drive without fuel?

    If I did not have a family, the nasty side of my nature would get some amusement from the fact that unless Mr Garry Hunt of Snap, Crackle Pop fame is well above middle age, he is in for a very dire old-age, and a much deserved one, too!

    (And I haven’t even touched on the one meter sea-level rise this century predicted by Professor Rahmstorf. This will automatically change a whole heap of sea-front – and nearby – property from freehold into effectively leasehold. Not to mention just what that will mean when their owners catch on to what that will do for the value of their investment and thus try to move out before the rush.)

    No amount of legislation is going to have any effect on Old Mother Nature. All we can do is somewhat belatedly actually pay attention to what she has been trying to tell us since the Industrial Revolution took hold.
  • Ian McPherson on December 17 2012 said:
    Hi Mel,

    Couldn't agree more. Here's a link to Kevin Anderson's Cabot Institute YouTube video:

    Cabot Institute Annual Lecture 2012

    A real life horror movie, compliments of the fossil fuel industry...

Leave a comment

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