Disclaimer

Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Sunday, December 20, 2015

Consensus

SOURCE

November another record

Hottest November ever recorded.  The chart below shows the 12 months average to November for each year since 1880.

SOURCE

Monday, December 14, 2015

Why China and India are embracing renewables

Pollution.

Beijing’s National Stadium, also known as the Bird’s Nest
Beijing, on a normal day (left)

Delhi is now the world’s dirtiest city, surpassing Beijing for air pollution limits
Delhi Pollution

Now that wind and solar produce cheaper electricity than new coal-fired power stations, you might as well switch.  It'll take longer for EVs (electric vehicles) to become the norm, but the way battery costs are plummeting makes it very likely than within 5 years, they will be switching here too.

Read more here and here.


Climate change denialism

I don't understand the where the climate change denialists are coming from.  
1. The world's temperatures are rising. The evidence is actually quite unambiguous.

The NOAA time series of global temperatures
The warming pause myth
Sea level rise accelerating

2. But even if all the climate change scientists and meteorologists are wrong -- and they probably aren't  -- so what? The cost of renewables is now BELOW the cost of coal-fired power. Wind is 40% to 50% cheaper than new coal-fired power stations.  In Australia, wind is 40% cheaper than new coal power stations.  In the US, even without subsidy, wind is much cheaper and solar is competitive with coal  So it won't cost us to switch.  Just in case all those scientists who warn about climate change are right.

3. And the costs of renewables continue to plunge. They're as cheap as fossil fuels now, and they will go on getting cheaper:
Wind
Solar
Batteries

4. Switching to renewables won't cut growth rates or lower living standards: on the contrary, new cheap energy will increase growth.

5.  So why are the denialists still fighting for a lost and -- unless you own a coal mine or are an oil magnate -- pointless cause?  And therein lies the answer, I think.  Scratch a denialist and you'll find someone in the pay of fossil fuel mega corporations.

Source


Sunday, December 13, 2015

The Paris Climate Agreement

Yes, it's tempting to dismiss the agreement.  Kyoto more or less failed.  Copenhagen was a disaster.    Why should the world, which loves the benefits brought from oil and coal, but ignores the costs,  actually do anything?

And yet .... there are some indications that the shift has already started, and will only accelerate:




 I read 15 or 20 articles every day about global warming and renewables, and most of them point towards a future in which global CO2 emissions peak and start falling, quite fast, in which renewables energy just gets cheaper and cheaper, in which the ingenuity of mankind allows us to go green with no effect on growth or living standards.  This shift poses major challenges to energy producers and to grid operators. But just as technological change expanded their markets, so change once again is contracting their markets.  As for Saudi Arabia, the UAE and other major oil producers, the sooner they diversify their economies, the better.  This new green energy world is not going to go away, whatever they think.  And the switch is accelerating.

Source