Climate

Tesla – when the plug is pulled on subsidies

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It seems that the removal of generous electric vehicle (EV) subsidies in Denmark shows the true colours of those willing to buy a car in order to signal their willingness to save the planet. While Musk has been one of the most effective rent seekers around, it seems that if consumers aren’t given massive tax breaks they aren’t as committed to ostentatious gestures of climate abatement. In Q1 2017 alone it seems that Danish sales of EVs plummeted 60%YoY. In 2015 Danish Prime Minister Lars Lokke Rasmussen announced the gradual phasing out of subsidies on electric cars, citing government austerity and evening up the market. Tesla’s sales fell from 2,738 units in 2015 to just 176 in 2016. The irony of the Tesla is that it is priced in luxury car territory meaning that taxes from the less fortunate end up subsidizing the wealthy who can afford it!

Naturally if internal combustion engines (which by the way are becoming more efficient by the years as new standards are introduced) are taxed the same as EVs then it is clear they’d sell many more. Do not be fooled – car makers have not heavily committed to EVs for a very good reason – brand DNA. That is why we see so many ‘hybrids’ which allows the benefits of battery power linked to the drivetrain, which outside of design is the biggest differentiator between brands.

While many automakers missed the luxury EV bus, Tesla has opened their eyes. The three things the major auto makers possess which Tesla doesn’t are

1) Production skill – much of the battle is won on efficiency grounds. Companies like Toyota have had decades to perfect production efficiency and have coined almost every manufacturing technique used today – Just in Time, kanban and kaizen to name three.

2) Distribution – the existing automakers have been well ahead of the curve when it comes to sales points. Of course some argue that there is no real need for dealers anymore, although recalls, services (consumables such as brakes) and showrooms are none-the-less a necessity.

3) Technology – The idea that incumbent auto makers have not been investing in EV is ridiculous. Recall Toyota took a sizable stake in Tesla many years ago. Presumably the Toyota tech boffins were sent in to evaluate the technology at Tesla and returned with a prognosis negative. Toyota sold Tesla because the technology curve was too low. Toyota invests around $8bn in just hybrid technology alone per annum. Tesla spent $830mn last year as a group across all products. A ten fold budget on top of decades of investment in all available avenues of planet saving technology gives a substantial advantage.

Tesla is a wonderful tale of hope but it rings of all the hype that surrounded Ballard Power in fuel cells in the early 2000s. Ballard is worth 1% of its peak. As governments around the world address overbloated budgets, trimming incentives for EVs makes for easy savings. Now we have a good indicator one of the electric shock that happens when the plug is pulled on subsidies.

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Most US voters don’t want to pay for climate abatement

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Rasmussen Reports note “US voters tend to agree the Paris Climate accord would have led to increased energy costs, and most remain unwilling to pay much, if anything, more to fight global warming…41% of Likely U.S. Voters think the accord’s requirement that the United States reduce fossil fuel emissions by nearly 30% by 2025 would increase energy costs…20% believe the requirement would decrease the cost of energy, while 23% say it would have no impact…16%..are not sure.”

As the Turnbull government toys around with a 42% renewable target by 2030 from 16% today, it wants us to believe that power prices will fall. It is a farcical pipe dream. We have a good yardstick for renewables known as South Australia. It has the highest electricity prices, frequent blackouts and has to build a gas fired back up plant and is mulling a battery storage facility for $600mn odd. Oh and the jobs creation baloney of renewables can be seen here. Businesses are pulling out of South Australia because of the energy farce. Who can blame them?

Many Americans would gladly accept Macron’s offer to take these conditional patriots away

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It didn’t take long for the group think press to lavish praise upon new French President Emmanuel Macron. Poor old Canadian PM Justin Trudeau has lost his status as the poster child of victim based politics. Perhaps his life-size cardboard cut outs now have purpose.

Macron’s appeal to American asylum (rent) seekers was yet more evidence of his stance on all the en vogue political causes which often ignore harsh realities. How smug to host a televised commentary calling for Americans to throw in the towel on their country. What he is basically saying it is ok for US citizenship to be conditional. The sort of mentality that says beheading a sitting president for (supposed) comic value is ok. Plastering “Earth to Trump: Fuck off” on a German tabloid is acceptable editorial behaviour and pushing for the overthrow of a democratically elected official who has not succumbed to group think.

Just because someone doesn’t agree with you President Macron doesn’t mean they are wrong. Perhaps the persuasiveness of the argument to date has been too poor. Sure you can argue he’s cozying up to his fossil fuel fossils but his decision was the world’s worst kept secret. Instead of questioning “why” he quit you’ve launched an all too common dismissive narrative that attacks his intelligence. Yet again another leader who plays the man not the ball. Is that the right stuff of leaders today? It would appear that keeping up popularity on social media is the most important trait on government officials these days

Macron boasted, “To all scientists, engineers, entrepreneurs, responsible citizens who were disappointed by the decision of the president of the United States, I want to say that they will find in France a second homeland…I call on them: come and work here with us. To work together on concrete solutions for our climate, our environment. I can assure you, France will not give up the fight.”

Perhaps he’d be better off to look at all of the sell-out celebrities who promised to leave the US if Trump won the presidency. Most if not all still remain. The same people, who owe much of their extravagant lifestyles to the generosity of US consumers and taxpayers, would gladly sell their country out. Those that fly their eyebrow trimmers half way around the world on a private jet yet tell us in Oscar speeches how grave our situation is. Quite frankly Monsieur President I think many Americans would be more than grateful at your offer to take these people off their grid.

To put the shoe on the other foot. I am disgusted with the state of politics in Australia. Even though my life long support for the Liberal party has waned, my love of country has not. No matter what stupid direction my country takes I will not throw in the towel. Ahh but you live in Japan! Yes I do. However I do my utmost to facilitate business between our nations, work my hardest to promote a solution that will hopefully improve countless lives by weaning drug addicts off menaces like ICE and so forth.

We shouldn’t be surprised by your words. They speak the language of those willing to talk but not listen. Your victory was more a vote against Le Pen than a vote for you. Such speeches show your true colours. By all means spend up on climate alarmist causes using French taxpayers  euros to full the void. What a coup if Trump got you to chip in for his absence from “making the planet great again.” Still go on with your tokenist virtue signaling if you don’t think the price is too high. America welcomes it.

America IN or OUT makes no difference to a dud Paris Climate Accord where 75% aren’t onboard anyway

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Across social media there are dozens of posts from Americans apologising to the world for abandoning the Paris Climate Accord. “There are millions more like me.” Yes you are probably right but there are millions like him too. What people should question is the ‘real’ commitment to the accord. If we were to replay the video tapes of the Paris COP summit we were hearing wails and gnashing of teeth that there was no agreement pending. Then in the final throes we were led to believe that an agreement was reached. The joy! The triumph! We did it! Here is the catch! It was agreed by ‘politicians’ not ‘scientists’. Politicians are renowned over the millennia to making compromise and commitments way beyond the scope of their likely hold on power.

Climate commitments are the ultimate level of virtue signaling and tokenism. Politicians can say in their legacies that they tried to save the planet for their great grandchildren even if nothing is achieved. Remember how the long held 2 degree upper limit target was  heralded as a no quid pro quo line. At Paris it became 1.5. In order to accelerate alarmism the upper band had to be cut to get countries to redouble their efforts. All of a sudden, decades of climates science that told us that 2 was acceptable (bearable) became 1.5 degrees with the stroke of a pen.

As I wrote yesterday, the garage of your neighbour was more telling of individual climate commitment. In Australia one energy company offers a service which gives you the opportunity to pay a premium over fossil fuel based power to source your energy in green form. Take up rate? Less than 5%. Who elects to tick the carbon offset box when they fly commercial? I don’t think many airlines even bother with this such is the low take up. Not to mention carbon calculators are so inaccurate. A passenger has no idea what the load factor, headwinds/tailwinds, holding patterns and conditions en route are that the figure you pay would be more accurate if spewed out of a bingo wheel.

Let’s check reality of the climate game. 75% of the evil gas that helps plants grow are caused by 4 countries – America, China, India and Russia. Let’s tackle them one by one.

America. Well the commitment to the Accord was so flimsy to begin with, It was laced with out clauses such as being exempt from being sued for any environmental damage caused in the past or future. Obama decided to tick the box himself after lawyers breathed on the fine print – remember the US was the last to commit.

China. China, China, China. The commitment is so robust they don’t have any intention to  get serious until 2030 (likely peak emissions). China has explicitly said it will raise the coal share of power to 15% by 2020 from 12% and this will keep climbing. China’s pollution problems have stuff all to do with global warming but public health however it can virtue signal under the banner of climate change mitigation and win brownie points.

India. The construction of 65 gigawatts worth of coal-burning generation is under way with an additional 178 gigawatts in the planning stages in India will mean they’ll not achieve Paris targets.

Russia’s commitment at Paris would have been more serious if drafted on a hotel napkin such was its lack of substance. 4 pages of nothing.

The accord is worthless. It was rushed at the end by bureaucrats not scientists. If it is really such a binding pact there will be no need to have 50,000 climate pilgrims kneel at the altar of the next religious cult meeting. They should thank America for its action because it will guarantee the hypocrites get to keep the junkets in exotic tourist locations going.

To double up on the stupidity, hearing virtue signaling politicians blather about remaining committed to a target that is now so fundamentally broken shows how untenable it is. Think about it. If America (at c20% of the supposed problem) quits then the remainder of countries have to fill in the gap not stick to existing commitments, Sure Merkel said she’d up Germany’s targets to offset the evil Trump which is pretty unachievable given the already high level of renewables.  China said they’d chip in but don’t think those comments are any more than empty platitudes trying to puff up the image of commitment when economic resuscitation is priority #1.

The irony is that Trump said he’d consider another deal. Another deal is what is needed. Because as it stands, the Paris Accord has all of the hallmarks of political manifestos across the globe – uncosted  broad based promises made against flimsy but overwhelmingly positive/negative assumptions.

So before I read more garbage about Americans having an imperative to take power back, perhaps they should examine the realities rather than the figment of imagination floating around inside their heads. Millions more like you is actually the problem why the message never gets sold properly.

Climate hypocrisy – go check your neighbour’s garage to gauge the fear

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When a politician fulfills a promise shouldn’t we be happy? Do we want them lie so we can live in a perpetual state of disgust? Trump walked away from the Paris Climate Accord as he said he would in the election campaign. Yet articles I read were titled “Trump to planet: Drop dead” (CNN). However if people and journalists truly examined how flimsy that the US commitment signed by the High Priest of virtue (President Obama) was with regards to Paris they would have to accept that it contained more out clauses than a pre-nuptial contract. Like an alcohol free beer it was a pretend signature. One part of it guaranteed that the US wouldn’t be held liable for any ‘damage’ to the environment claimed by other countries.

The best way to think about climate change is to start by looking in your neighbour’s driveway. I’m in Sydney at the moment and the amount of SUVs is astonishing. The five segments that have added the most volume in 2017 YTD vs 2016 are: medium SUVs, 4×4 utes, small SUVs, large SUVs and 4×2 utes, in that order. Where are the save the planet sipping hybrids and compacts? Yet Aussie governments at the state and federal level want to commit to huge renewable targets thinking its a vote winner when consumption patterns don’t reflect it.

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It seems that Americans don’t give a hoot about saving the planet either. SUVs (light trucks) are the preferred vehicle of choice. So maybe it is more Americans don’t give a stuff about climate alarmis or Paris, even during Obama’s reign. So why don’t journalists turn from moaning about Trump fulfilling election promises and examine consumption patterns of all of us.

Sure journalists could take the current line of climate alarmism and push all of the stats from the UNIPCC and NOAA again about how doomed we all are but after decades the argument of this settled science isn’t won. Yes gasoline and diesel engines maybe getting more efficient but the fact sales of larger sizes vehicles are growing overall (trend been rising over the long term) show us human nature puts self interest first. Should a sailing enthusiast be forced to ditch his passion because the V8 Land Rover required to haul his yacht is blasphemous to the environment? Should a family with four kids be forced to use public transport because a 7-seater minivan is just so unethical?

Parhaps the 50,000 climate pilgrims that fly each year to kneel at the UNIPCC altar to warn us of the pending doom if we don’t take drastic action might talk to the International Air Transport Association (IATA). “IATA expects 7.2 billion passengers to travel in 2035, a near doubling of the 3.8 billion air travelers in 2016. The prediction is based on a 3.7% annual Compound Average Growth Rate (CAGR) noted in the release of the latest update to the association’s 20-Year Air Passenger Forecast.”

So when I read CNN and other media outlets attempt to tell Trump he’s told the world to get stuffed, maybe they’d realize by past, current and future consumption patterns that the world has already told alarmists to get stuffed.

Perhaps the hypocrisy, double standards and scandals of those that preach the faith is the problem. The delivery over decades has failed to win hearts and minds. Had sensible debate, fairly reported scientific facts void of embellishment and sensible policy been put forward to address the climate then maybe humans would have taken more serious steps? As it stands Trump is in the majority not the minority. 190 countries don’t speak for 7 billion people. And if you want proof in the pudding of the sustainability of green jobs, the first chart highlights the trend of renewable jobs by state in Australia.

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Climate sceptics are idiots by association

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Burn this image in your head first. It is Tokyo today. As you can see for such an evil carbon emitting industrialized nation as Japan the skies are blue as any you’d find in Australia. Ironically Japan is a country often selected as a country that must pay into the climate change pot for its sins rather than get a pat on the back for its ability to be clean and productive. So it was no surprise that once again I read the bias in the press reporting from the G-7. Because Trump is a climate sceptic and disagrees with the other 6, articles tried to use this as a reason to beat up on those who won’t bend to the will of the alarmists because he is in their view – an idiot. The inference is that all climate skeptics must be fools by association. Exactly the same garbage at the time of Brexit. A table circulating with Trump, Farage, Putin and other ‘undesirables’ supporting Leave and Obama, EU officials and bodies like the NUS and Greenpeace backing Remain. Then we get the result of the referendum.

I will openly admit that the President has many flaws but to use this as a basis of driving the climate change agenda is pathetic. One article blathered on about his lies (hardly news) and then made the reference to “universally accepted science” which is a huge porky in itself. It isn’t settled. One of the reasons it isn’t settled is down to the data manipulation, amateur hour ethics of bodies like the UNIPCC, NOAA and numerous universities with agenda driven studies numerous of which numerous have been exposed for fraud. Climate alarmism is nothing more than wealth redistribution as the above picture highlights.

If indeed it is universally accepted why bother investing billions of side-by-side research papers to formulate the same outcome? What we have is the construction of multiple rail lines built next to each other operating each at 10% capacity. It is such inefficient capital allocation. Why do we need 50,000 climate disciples flying annually to mega junket tourist locations all to kneel at the altar of the COP summits. This could be delegated to 1% of that number. It shows at the very least that the disciples are the biggest hypocrites. If the science is so settled and everyone is so universally on board as they claim then there is no need to keep twisting the truth to squeeze more funds to prove what we already (supposedly all) agree on.

Seeing Merkel make an argument about 6 countries in favour of following through with the Paris Agreement and America against is laughable. Is America, or at the very least its President required to follow consensus for the sake of group think? Is global politics now reduced to going with the flow? Should dissenting opinions be treated like conservative speakers at universities? This is exactly why it is so hard to respect the current crop of global leaders. One seriously doubts that they truly believe it outside of it being an agenda item to secure votes. Climate alarmism is the socialism of the 21st century.

So perhaps the ‘idiots’ are the ones that can’t escape the pre-formed bias against America’s Commander-in-Chief. Talking about German car imports (when many BMWs and Benz’s are built in the USA) and other gaffes don’t really do him favours but if the media wants to take the moral high ground at the very least they can balance the views on the climate debate (and others) and admit the multiple self-inflicted wounds and inaccuracy of decades of forecasting models where 98% have proven wildly off target. It reminds me of compliance seminars in my old industry. We’d fly in compliance officers to train us about the penalties and Big Brother! We’d focus on the evils of all our competitors and the punishment meted out to them. I asked a simple question – “why don’t we use compliance breach examples from our own company and the manner in which we dealt with it as a matter of getting people aware of being a responsible corporate? Can we honestly say farts don’t smell?” It sums up the climate alarmists perfectly. Everyone else is at fault and everything we do is virtuous, honest and worthy of self-praise.

Dick Turpin Turnbull will chase away foreign capital

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I was asked by a client this week on what I thought of Australia’s political climate. I said to him, “if you asked me 15-20 years ago I’d safely argue that it was the only country in the region which could boast incredibly stable government, sensible economic policy and a safe place to park your money. Today I can’t say with hand on heart that this is the Australia you are investing in today. What I will say is that you should keep your powder dry because it will become a ‘pound shop’ in the not too distant future with a weaker currency, higher rates and fire sale asset prices.”

He asked if I could elaborate. I replied “we have had 5 prime  ministers in almost as many years. Before that we never saw anything like that. Our political climate is vile and volatile. We now have a government that is seeking to put in place knowingly unsound policies to arrest poll declines rather than try to fix an out of control deficit. What they are failing to see is that bashing big banks (especially for a conservative Coalition government) out of the blue chases off investment (Alan Joyce and Don Argua are right about that). Foreign investors must wonder whether they may fall foul of knee-jerk regulations and decide the risk is not worth it. So in answer to your question the current climate is going to offer some fantastic opportunities down the line because all of the political turmoil will eventually force change and buying into the market leading into that will be your best bet.”

So with our Dick Turpin highwayman robber at the helm we invite unwelcome flight of capital. If you want to create jobs, growth, stability and invite foreign investment you do so by providing a platform that supports it. It isn’t won by bashing industry, cranking up public spending and hiking taxes. It is done by making yourself the safest place to invest and all the while that happens the risk falls meaning capital is not only cheaper but more abundant. This isn’t trickle down economics but sound policy. Sadly talking of net debt isn’t going to save this government and what is worse Opposition leader Bill Shorten wants to outspend a budget that makes the Sultan of Brunei’s giveaways look like Venezuelan austerity measures.