Author Topic: Addressing climate change  (Read 1748 times)

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Online Granny

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Addressing climate change
« on: May 18, 2019, 02:42:22 am »
First, it's going to cost us.
https://www.nationalobserver.com/2019/05/16/news/bank-canada-warns-fire-sales-carbon-intensive-assets-could-destabilize-financial
The central bank listed climate change as one of six vulnerabilities in the Canadian financial system in a report released May 16. The report, called the Financial System Review, marks the first time the Bank of Canada has explored the issue in depth as part of its examination of risks to the nation's financial stability.

In its report, the central bank recognized that investors are only getting a partial picture of what kind of impact climate change will have on Canadian businesses, because "few firms disclose the financial impact of climate change on their assets and operations."

It said climate-related risks faced by the financial system "can be managed most effectively when investors and authorities know what exposures firms face and how they are being managed."
...
"Transition costs will be felt most in carbon-intensive sectors, such as the oil and gas sector. If some fossil fuel reserves remain unexploited, assets in this sector may become stranded, losing much of their value. At the same time, other sectors such as green technology and alternative energy will likely benefit."
...
The banking regulator in Canada, the Office of the Superintendent of Financial Institutions (OSFI), has said it "expects all financial institutions to quantify their climate risk exposures" as well as develop strategies to manage their transition to lower-carbon assets.


It reaĺly seems that the tide is turning.

« Last Edit: May 18, 2019, 03:30:29 am by Granny »

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Offline TimG

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Re: Addressing climate change
« Reply #1 on: May 18, 2019, 07:16:42 am »
It reaĺly seems that the tide is turning.
Nothing really changes. Banks invent hypothetical numbers to keep the regulators happy and then go back to the the real world were we need fossil fuels and the so-called transition to low carbon is not going to happen soon if at all because the necessary tech does not exist at a price we can afford. In the meantime the Canadian economy struggles because the world does not want to buy anything from us other than resources and a place to launder money.

Online Granny

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Re: Addressing climate change
« Reply #2 on: May 18, 2019, 08:23:10 am »
Seems investors are getting pretty wary of fossil fuels, moreso because they've been misled about climate change impacts.

It has to happen.

Offline TimG

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Re: Addressing climate change
« Reply #3 on: May 18, 2019, 08:29:07 am »
Seems investors are getting pretty wary of fossil fuels, moreso because they've been misled about climate change impacts.
Investor risk statements include all kinds of improbable risks simply because disclosing a risk, no matter how remote, is better than not disclosing it. That does not mean it is serious or even a likely problem. It is only a possible problem. It is a mistake to take an investor risk statement as something that is actually relevant to investors. Any knowledgeable investor will understand that fossil fuels are needed to power our economy and that is not likely to change much over the next 20 years.

Offline Omni

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Re: Addressing climate change
« Reply #4 on: May 18, 2019, 12:12:47 pm »
Investor risk statements include all kinds of improbable risks simply because disclosing a risk, no matter how remote, is better than not disclosing it. That does not mean it is serious or even a likely problem. It is only a possible problem. It is a mistake to take an investor risk statement as something that is actually relevant to investors. Any knowledgeable investor will understand that fossil fuels are needed to power our economy and that is not likely to change much over the next 20 years.

Apparently some pretty successful investors disagree with you.

Jeremy Grantham, co-founder of GMO, one of the world’s most influential asset management companies, said the financial case for divestment was compelling. “Investors with long-term horizons should avoid oil stocks on investment grounds. They face a sustained headwind. Ethical arguments for divestments are simply not necessary. They are a pure bonus,” he said.

Another new report, from Genus Capital Management in Canada, said its fossil free fund had outperformed a benchmark of standard stock market indices by almost 2% per year over the last five years. The company’s Fossil Free CanGlobe Equity Fund is a mix of Canadian and global stocks. “At the five-year mark, we can conclusively say: divesting from fossil fuels pays,” said CEO Wayne Wachell.


https://www.theguardian.com/environment/2018/sep/10/fossil-fuel-divestment-funds-rise-to-6tn

Offline TimG

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Re: Addressing climate change
« Reply #5 on: May 18, 2019, 01:42:13 pm »
Apparently some pretty successful investors disagree with you.
And other investors don't:
https://finance.yahoo.com/news/berkshire-invests-suncor-warren-buffett-213210421.html

Quote
We can only guess at Buffett's -- or his portfolio manager's -- true intent when it comes to Suncor. But a position worth nearly $3.8 billion at the current share price is awfully big for a mere short-term flip trade. Based on what we know about Berkshire's investing approach, this looks like a bigger investment in the success of Suncor's quite radical transformation into a lower-cost producer.

Moreover, Suncor is blessed with both strong long-term reserves and production power. Its existing oil sands resources are expected to deplete at a rate of just 1% annually between 2019 and 2023. At 2017 production levels, its current resources should be good for about 36 years. That is a lot of long-term opportunity.

There is money to be made pandering to the prejudices of people like you and Granny so there will always be people talking up their so called "ethical" investing strategy. That does not mean the world has actually changed.
« Last Edit: May 18, 2019, 06:52:26 pm by TimG »

Offline Omni

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Re: Addressing climate change
« Reply #6 on: May 18, 2019, 02:09:24 pm »
And other investors don't:
https://finance.yahoo.com/news/berkshire-invests-suncor-warren-buffett-213210421.html

There is money to be made pandering to the prejudices of people like you and Granny so there will always be people talking up their so called "ethical" investing strategy. That does mean the world has actually changed.

And there is money to be made from people who are pulling their investments out of fossil fuel stocks because they don't dismiss what science/scientists are showing/telling them. i.e. rapidly heating arctic, release of methane from what used to be permafrost, huge areas of missing polar ice cap, severe floods over here, severe droughts over there, forest fires burning in California all winter long, etc., etc. Even some of those little guys in the fossil fuel market (you know, like Exxon-Mobil for instance) are using wind/solar to help produce their product.

Exxon Mobil Corp. will use renewable energy to produce oil in West Texas.

Under 12-year agreements with Denmark’s Orsted A/S, Exxon will buy 500 megawatts of wind and solar power in the Permian Basin, the fastest growing U.S. oil field. It is the largest ever renewable power contract signed by an oil company, according to Bloomberg NEF. Terms weren’t disclosed.

https://www.bloomberg.com/news/articles/2018-11-28/oil-giant-exxon-turns-to-wind-solar-for-home-state-operations 

Online Granny

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Re: Addressing climate change
« Reply #7 on: May 18, 2019, 06:00:22 pm »
Wind and solar are the future of energy, for sure.
These efficient bladeless wind turbines address a lot of the current concerns.

https://vortexbladeless.com/
« Last Edit: May 18, 2019, 07:36:47 pm by Granny »

Offline Poonlight Graham

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Re: Addressing climate change
« Reply #8 on: May 18, 2019, 07:27:16 pm »
Wind and solar are the future of energy, for sure.
These efficient bladeless wind turbines address a lot of the current concerns.

Hey pretty cool:

https://www.youtube.com/watch?v=eW4AzDpjcsI
"The child who is not embraced by the village will burn it down to feel its warmth"  - African proverb
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Offline Poonlight Graham

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Re: Addressing climate change
« Reply #9 on: May 18, 2019, 07:37:02 pm »
The problem i see with fossil fuels is that once we start going to non-fossil fuel sources, the supply of fossil fuels will stay the same but as the demand decreases, so will the price. Price of course = supply + demand.

If ie: oil becomes cheaper, that may mean it will continue to compete with EVs even if EV technology continues to drop in price.

As an aside, I am seeing more and more Tesla's on the road.  I actually sat in a couple, it was neat but didn't like the dash, which was non-existent, all of your typical dash gauges are on a large tablet in the middle console, which is less convenient since you have to turn your head: https://images.hgmsites.net/lrg/tesla-model-s-dashboard-in-autopilot-testing-with-iihs-credit-iihs_100665437_l.jpg

The doors on some models also open like a Delorean.  Seems the Teslas are going for different for different's sake, kind of gimmicky. Since the car doesn't have an engine you also get a small trunk under the hood for storage in the freed up space, which is nice.  No engine means no oil changes, which is a nice savings of $60-80 a year.
"The child who is not embraced by the village will burn it down to feel its warmth"  - African proverb

Online Granny

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Re: Addressing climate change
« Reply #10 on: May 18, 2019, 07:42:12 pm »
Thanks for posting that video, poonlight graham
Link added above now too.

The technology is exciting. Changes can snowball fast , and I think we're on the cusp of it.
« Last Edit: May 18, 2019, 07:48:24 pm by Granny »

Offline Omni

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Re: Addressing climate change
« Reply #11 on: May 18, 2019, 07:54:34 pm »
The problem i see with fossil fuels is that once we start going to non-fossil fuel sources, the supply of fossil fuels will stay the same but as the demand decreases, so will the price. Price of course = supply + demand.

If ie: oil becomes cheaper, that may mean it will continue to compete with EVs even if EV technology continues to drop in price.

As an aside, I am seeing more and more Tesla's on the road.  I actually sat in a couple, it was neat but didn't like the dash, which was non-existent, all of your typical dash gauges are on a large tablet in the middle console, which is less convenient since you have to turn your head: https://images.hgmsites.net/lrg/tesla-model-s-dashboard-in-autopilot-testing-with-iihs-credit-iihs_100665437_l.jpg

The doors on some models also open like a Delorean.  Seems the Teslas are going for different for different's sake, kind of gimmicky. Since the car doesn't have an engine you also get a small trunk under the hood for storage in the freed up space, which is nice.  No engine means no oil changes, which is a nice savings of $60-80 a year.

Not only are EV's already cheaper/more efficient to operate than gas powered cars, look at the potential for maintenance savings when you think about the far fewer moving parts that make up an electric motor compared to pistons.  A Tesla Model S has fewer than 150 moving parts, including the drive train, windows, controls, suspension and doors. A typical internal combustion engine car has about 10,000. Agreed up front cars are currently higher sticker price but will drop as more people switch, and of course you don't have to buy a Tesla just like you don't have to buy a Cadillac.
« Last Edit: May 18, 2019, 08:07:05 pm by Omni »

Offline TimG

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Re: Addressing climate change
« Reply #12 on: May 18, 2019, 08:14:58 pm »
Hey pretty cool:
Definitely a clever idea but the devil will be in the details. i.e. what is the capacity factor? what is the cost per kWh? What is the product lifetime (no gears but flexing columns will be subject to material fatigue)? It will be tech to watch for but its success is not guaranteed at this point.

Online Granny

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Re: Addressing climate change
« Reply #13 on: May 18, 2019, 08:26:53 pm »
Not only are EV's already cheaper/more efficient to operate than gas powered cars, look at the potential for maintenance savings when you think about the far fewer moving parts that make up an electric motor compared to pistons.  A Tesla Model S has fewer than 150 moving parts, including the drive train, windows, controls, suspension and doors. A typical internal combustion engine car has about 10,000. Agreed up front cars are currently higher sticker price but will drop as more people switch, and of course you don't have to buy a Tesla just like you don't have to buy a Cadillac.

I don't know much about cars anymore, but browsing around it seems there are lots of used ones around now too. That's when EV's becomes more accessible to many more people.

What is the life of an EV?

Offline Poonlight Graham

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Re: Addressing climate change
« Reply #14 on: May 18, 2019, 08:27:24 pm »
Not only are EV's already cheaper/more efficient to operate than gas powered cars, look at the potential for maintenance savings when you think about the far fewer moving parts that make up an electric motor compared to pistons.  A Tesla Model S has fewer than 150 moving parts, including the drive train, windows, controls, suspension and doors. A typical internal combustion engine car has about 10,000. Agreed up front cars are currently higher sticker price but will drop as more people switch, and of course you don't have to buy a Tesla just like you don't have to buy a Cadillac.

Would you buy one on your next car purchase?  For me i'd 1. have to do the cost calculations over its lifetime, and 2. i'm waiting to see how these things work out, they're a new tech, how do they hold up etc, and 3. There's issues with charging, unless you just do city driving.

I'd be a hybrid for now if i went that route.  Maybe in another 10 yrs they'l be fully mainstream.
"The child who is not embraced by the village will burn it down to feel its warmth"  - African proverb