Actions Speak Louder Than Words

We get the message. Or do we? You can not fail to have heard by now that the planet is in trouble – and it’s all our fault. Yet you wouldn’t think it if you looked at the evidence in front of you.

This is despite the language being used around it ramping up significantly in recent years. According to the Oxford English Dictionary, the first mention of climate change can be traced back to an article in a scientific journal as far back as 1854. The phrase climate change is increasingly being replaced by more emotive descriptions such as climate emergency (the use of which was 76 times more frequent in the first half of 2021 than it was in the first half of 2018) and climate crisis which had increased nearly 20-fold over the same period.  

Similarly, global warming is too mild a statement for many to get their point across. Global heating has increased in frequency in the past few years with the Oxford Monitor Corpus finding that it was approximately fifteen times more frequent in the first half of 2021 than it was in the first half of 2018. I’ve not found more recent statistics but I’m guessing that a similar pattern remains.

Is there a risk that language can be exaggerated to make a point? Most certainly, as we hear and see regularly from those who profess to be doing something “24/7” (you’re not – unless you are describing your breathing) or those who give 110%, 200% or even 1000% in effort or enthusiasm (you can’t actually give more than 100%). Even Meatloaf was at it when he vowed he’d do anything for love. But he wouldn’t do that.

Unusual Party Political Unity

It is rare to see cross party agreement on anything, but they all said the right thing regarding their determination to hit climate goals. But as we’ve mentioned, actions speak louder than words.

What Sunak’s net zero U-turn means for the UK climate goals” was the Independent’s headline on 21st September 2023.

Not to be outdone, “Little good can come of Starmer’s green U-turn” was the FT’s lead on February 9th 2024 while only this week The Scotsman ran with “SNP left bruised and battered after week from hell – Peter Murrell arrest, climate change U-turn..” An admirable display of determination to stick to your policies.

Interestingly, these U-turns have come shortly before, or during, an election year. Does this mean that the political party manifesto planners have sniffed out that the general public is less concerned about climate matters than media-world would have us think? Are businesses finding that just adding “green” or “eco” to a product’s name or description is not fuelling the expected demand for their goods?

AI Is No Friend Of The Planet

I must confess that I was under the assumption that technology was generally good for the environment (except for cryptocurrencies and their demand on energy). It appears that I was wrong, as Sherwood News’ Snacks article on April 19th informed that “training a single AI model can emit over 284 tons of CO2, or the lifetime emissions of five average American cars. AI’s carbon footprint is nearing 1% of annual global emissions…While the world slowly adopts renewable-energy sources like solar panels and wind power to lower emissions, emerging technologies are countering progress.” I did not know this. Will it do anything to slow down the adoption of AI across the planet? Absolutely not.

It’s a shame wind turbines can’t run on political headwinds because our energy problems would be solved. Unfortunately, headwinds to alternative energy adoption appear to be increasing with every new crisis that occurs.

Look at the chart below. This shows the performance of the HAN Future of Defence ETF and the Xtrackers MSCI World Energy ETF versus that of ETFs focussing upon Autonomous Vehicles, Decarbonisation Enablers, Renewable Energy Producers and Global Clean Energy since July last year. It needs no explanation.

The next chart shows how short lived the “renewables euphoria” was relative to the wider market. As short a time ago as 2022 clean energy and renewable and decarbonisation funds were powering above the returns to be gained from the MSCI World Index (coincidentally soon after the ramping up of the language quoted previously?) but now investor sentiment has turned very negative.

A similar picture can be seen by looking at the returns of clean energy v fossil energy as shown below. Clean energy saw a tremendous bout of enthusiasm when Biden was elected President of the United States, but has been in steady decline since, while the opposite can be said for oil and gas (driven by war, of course).

The extent of this change in sentiment can be seen more clearly in the second chart below which maps the returns from peak excitement in clean energy. Since then, clean energy has lost some 50% while oil and gas has risen by 138%.

Are We Fighting A Losing Battle?

We’re certainly not giving up on the longer term potential of New Energy and Transportation which remains one of our four building blocks upon which the future is to be founded but sentiment is not helped by some of the dramatic language that is used around it. Being told regularly that it is either too late already or that we’re in the last chance saloon can be a disincentive for people to try harder. People remember all too clearly the time that emissions dropped like a stone. It was when humans were locked up and there were no vehicles on the road and no planes in the sky. The public appears to be echoing Meatloaf. We would do anything for the planet. But we won’t do that.