Analysis |

Even if He Tries, Donald Trump Can't Make Climate Change Any Worse

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Drought- and heat-stricken corn in Nashville, Ill. Scientists have connected man-made climate change to extreme weather, including deadly heat waves, droughts and flood-inducing downpours. (2012)
Drought- and heat-stricken corn in Nashville: Scientists connect man-made climate change to extreme weather, including deadly heat waves and droughts. Credit: Seth Perlman, AP

The world’s investors haven’t exactly been hankering for hydrocarbons even though the price of oil has begun to rebound and that climate-change denier, Donald Trump is just a month or so away from stepping into the White House.

That’s what we learn from an analysis by Arabella Advisers of assets among investors divesting from fossil fuel companies that was released this week.

The study shows that an initiative begun on U.S. college campuses in 2011, to persuade investors to shun traditional energy investments (oil, gas, coal and other fossil fuels) has been gaining momentum. No less than 688 institutional investors and 58,000 individual investors in 76 countries have foresworn the demon fossil fuel. These include major pension funds, insurance companies and financial and religious institutions that altogether control a whopping $5.2 trillion, none of which they mean to put into hydrocarbons.

In the past 15 months alone, the assets represented by the fossil fuel divestment movement have doubled. “It’s pretty clear that the growth trajectory is enormous,” said Ellen Dorsey, the executive director of the Wallace Global Fund, which sponsored the study.

The green energy industry has had a difficult time in the last few years. The drop in oil prices has left many green companies in difficulty, or dead. More recently, oil has rebounded, partly due to a global agreement to reduce production by the Organization of Petroleum Exporting Countries and other petroleum powers. And now energy company stocks are feeling the sweet sigh of a fresh breeze, in the form of Donald Trump. The president-elect of America says he doesn’t believe in global warming and the people he has appointed to key energy jobs in his administration share that view.

Statements like that have led to much wailing worldwide about Trump reversing the little progress that has been made regarding the prevention of climate change. Environmentalists say Trump will destroy nature and sell it on the cheap to Big Oil. Trump will literally hasten the end of the world. Trump hasn’t helped matters with his statements and conduct.

But Trump’s ability to actually have an impact is miniscule, if not nonexistent.

Energy production involves long-term processes that Trump cannot stop. Coal isn’t going to come back into favor. Whatever Trump promised the coal miners of America, it isn’t economically viable or popular. With the dramatic swings in oil prices, it’s not only governments that are providing economic incentives to develop alternative energies. Some are being driven to that solution as a result of local necessity, political manipulations, long-term vision or even pure business sense.

The politics behind the battle against global warming is complicated. It is true that the United States, under President Barack Obama, signed the Paris climate accord, but internal strife was hampering that agreement well before Trump won the election in November. Obama’s administration also laid down oil pipelines and damaged nature reserves.

But the bottom line is that all the efforts underway to stop global warming — minimizing pollution; reducing the squandering of natural resources; halting deforestation — all pale into insignificance when compared with the forces driving all these forward.

The fact that large institutional investors are adapting a seemingly naive and idealistic drive by college students to divest the assets of hydrocarbon-related businesses is a testament to the depth of the changes occurring in global business.

Among those divesting are Norway’s sovereign wealth fund and the Germany-based financial services giant Allianz. Private businesses represented nearly 90% of the overall total.

In the 1970s, the problem of smog was tackled with some degree of success, thanks to regulations and technological advances that reduced emissions such as sulfur dioxide and carbon monoxide. Now we have climate change, and the battle has centered on reducing emissions of carbon dioxide – a gas that all animals and humans emit when they breathe.

The global climate system is vast and chaotic. It is affected by everything from population growth to the economic standard to which the world aspires, the manufacture of oceans of plastic toys in China, and flatulent sheep in New Zealand.

So far the main beneficiaries from the battle against climate change are financial brokers. Clever investment banks that have been trading in carbon emission permits, arguing that the free market is the most efficient way to manage the pollution economy, given government restrictions.

And meanwhile a number of “solutions,” such as hybrid cars, have turned out to leave as much of an environmental footprint as their standard equivalents.

In other words, even if climate change is a disaster that we must do everything to avert — a single president, reactionary as he might be, cannot tip the balance in either direction. Trump can indeed damage the environment, assuming he really does push through regressive legislation, and assuming that Congress lets him. The only comfort, unfortunately, is that of fools: The human race and modern economics have already done such horrendous damage to the planet that whatever Trump’s small hands can achieve will be relatively insignificant.

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