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Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

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Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#201

Post by ZeroGravitas »

shinryuu wrote: post #195
throwaway_oil wrote: post #144

Earlier quoted context omitted.

Divestment or investment due to ESG score goals is effective. Internal decisions at F500 oil & gas companies are being made with ESG in mind due to the amount of capital increased scores open up. Source: work for an oil & gas company

Do you know why Bill Gates would go out and tell it is ineffective?

It's basically a sales pitch for his own investments.

He regularly says things that are questionable in this topic and ends with "and the company I'm investing in is the answer".

E.g. his pitch for modular nuclear is basically to talk down renewables.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#202

Post by orbifold »

Gibbon1 wrote: post #176
parasubvert wrote: post #169

Earlier quoted context omitted.

Cutting off the supply without shifting demand doesn’t solve the problem though, it aggravates people to vote in populists who will deregulate.

The way I figure if someone buys a gasoline powered car, they've just committed us to 50-100 tons of CO2 emissions. Seems like that is what you want to stop not playing games with fuel taxes.

That seems incredibly low. 1kg of Beef produces ~1ton CO2 equivalent emissions

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#203

Post by ClumsyPilot »

gruez wrote: post #28
Nasrudith wrote: post #8

Really divestment is something which seems intuitively to be threshold based for its impact. If there is a robust investment pool any leaving will just be auto-filled by those seeking opportunities. However if it gets below a critical mass from enough divestitures they will find new investments hampered and those who are "late to the exit" will find it hard to get value out of it.

>However if it gets below a critical mass from enough divestitures they will find new investments hampered and those who are "late to the exit" will find it hard to get value out of it. ...only if the company actually needs more capital and can't raise it any other way (eg. bonds). If there's any sort of leak, then you're giving the holdouts outsized returns.

What do you mean by the leak? What mechanism would drive outside returns?

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#204

Post by ClumsyPilot »

comicjk wrote: post #110
WhatIsDukkha wrote: post #94

So where does the dollar to invest in climate innovation come from if you don't take the dollar out of the fossil fuel stock? What he said was nonsensical and innumerate. Perhaps its because he has effectively infinite money? His comment don't really hold up even under basic charity. The dollar in fossil fuels is a dollar not in another industry with a better story for the environment. The rest of us have a limited p…

Imagine a climate innovator that is selling stock worth $1 billion based on expected returns. That stock can be expected to sell for $1 billion, and no more, even if $0.5 billion of that comes from altruistic investors. The altruistic investors can't drive up the price - as long as money from amoral investors is needed, the amoral investors are the price setters, because they won't pay more than what they think the e…

Your argument works well if we are talking about easily quantifiable assets like a wind farm where you can estimate annual returns for the next 20 years.

It falls flat when we are talking about genuine inventions and new technologies, where the greater the investment, the faster it can scaled and the more it can be developed/refined. It is not possible, in such case, to say that a specific opportunity is worth $1 billion, just like, as the point of raising the seed round you can't know what will be the valuation at IPO

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#205

Post by coldtea »

So, how about the concern that if we cut fossil fuel to 0% tomorrow (or even in a year or decade), we would have absolutely no way (for decades) to replace it.

We don't have enough alternative (renewable or nuclear or whatever) energy power, we need to build billions of electric cars (if we are to replace the current fleet), thousands of wind/solar/etc installations, ways to regulate fluctuations and store the energy that don't involve fossil fuel grid, as well as tons of factories, machinery, etc currently operating on fossil fuel, including our entire airplane fleets, plus all the armies in the world... Oh, and find the money to do all that...

So there's that... Some people seem to believe that if we turned a switch, we could turn to 100% renewables tomorrow...

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#206

Post by edanm »

habosa wrote: post #155

I agree with Bill that divestment is probably less impactful than many people think, and certainly not worth all of the effort people go through protesting trying to get Fund X to divest from Objectionable Investment Y. However I think there are two obvious ways it has > zero impact. Let's take an oil company as an example: 1) If fewer influential investors/funds are invested in oil, there will be fewer people angry…

I don't get your second point- money "divested" is replaced by different money invested - there's no overall change.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#207

Post by ClumsyPilot »

Udik wrote: post #70

For a start, I can't even understand what is exactly the point of advocating any action against fossil fuel companies. After all, those companies only exist because we , directly or indirectly, buy their products. And we buy their products because they're cheaper than the alternatives, or even irreplaceable. It's as if everybody were asking the government to take action against the supermarket where we all do our gro…

The problem is dominated by structural issues and non-market forces. You can live the exact same lifestyle in France and US, and your carbon footprint will be almost 3 times higher in the US.

Your personal buying habits cannot address the fact that energy grid is more carbon intensive from US, I cannot but electricity directly from a nuclear powerplant, UK government gives subsidies to fossil fuel companies, energy policy is politically decided, most of energy market is B2B, meaning you are not even a buyer there, the list goes on and on.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#208

Post by coldtea »

ClumsyPilot wrote: post #200
graeme wrote: post #19

Earlier quoted context omitted.

Does this work in liquid markets though? Demand could obviously drive up price beyond fundamental value in a bubble, or below fundamental value in a panic. But in the ordinary course of things, we would expect the price of a security to match its value in the long run. If you are a rational, amoral investor, and you see a security worth $100, you would be prepared to pay up to $100 for it, and to buy it in as large a…

There is no 'Fundamental value'. The price is only determined by supply and demand. Companies are traded with wildly different valuation to profit ratios, perception of stability, speculation of future profit, and even ethics. For example look at TSLA valuation compared to revenue, and compare it to any other car company. Stock prices also go up after governments print money, because banks have spare cash to invest b…

>There is no 'Fundamental value'. The price is only determined by supply and demand.

That's a "first order" thinking.

The parent posits that there are forces working (eg. use value or prestige value or fad value) before and beyond "demand" (which is obvious - else what drives demand itself? It's not some magic entity that emerges out of nowhere).

And hence, demand could be driven up beyond a sustainable level (e.g. in the case of the "gold rush", or the "tulip bubble" -accurate or not-), and be corrected when that reaches its breaking point. Or a state or business could also drive up demand artificially in some cases (e.g. buying its own stock covertly).

>At the end of the day an investor can't calculate fundamental value, there is no agreed formula for it.

No, but if they're good, they can and should approximately calculate how different this "fundamental value" is from the traded value, and how sustained is the demand, to calculate the trajectory of a stock, and its rick...

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#209

Post by donkeyd »

orbifold wrote: post #202
Gibbon1 wrote: post #176

Earlier quoted context omitted.

The way I figure if someone buys a gasoline powered car, they've just committed us to 50-100 tons of CO2 emissions. Seems like that is what you want to stop not playing games with fuel taxes.

That seems incredibly low. 1kg of Beef produces ~1ton CO2 equivalent emissions

According to EPA [0]:

> A typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year.

I guess that's why so many people are urging to buy less beef. [1]

0: https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-t...

1: https://www.theguardian.com/environment/2014/jul/21/giving-u...

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#210

Post by sideshowb »

kerkeslager wrote: post #36
sideshowb wrote: post #32

Earlier quoted context omitted.

I think Ha Joon Chang suggested that managers will likely receive reduced bonus, or in extreme cases fear losing their jobs, if their actions lead to drop in share price?

But the managers' actions aren't leading to a drop in share price, it's divestors' actions that are leading to the drop in share price, and this would be obvious with any divestment effort large enough to create an effect.

The managers bear ultimate responsibility for continuing the actions which investors dislike.
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