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The green agenda’s role in global inflation


AS inflation rises and the prospects for our return to normality following the pandemic fade ever more into the distant future, criticism is rightly focusing on financial institutions and regulators. They claim that printing money, which has inevitably caused prices to rise, was necessary to mitigate the economic chaos of lockdowns. But now they appear to be behind a third act of immense self-harm to help to steer the world to inflation and deliberately prevent economic recovery. The rise in energy prices the world has seen were not the result of an unforeseeable supply crisis, but engineered by those charged with managing the economy.

In a recent interview, Bank of England Governor Andrew Bailey admitted to Sky News his discomfort at the UK rate of inflation heading towards 10 per cent. ‘We are being struck by historically large shocks,’ explained Bailey, removing himself and his organisation from the spotlight. ‘Who of us thought there would be a war in Europe of the sort that we’re seeing?’ he asked rhetorically.

As it happens, many people have been predicting such a conflict. Analysts, be they critics of Nato or Moscow, have long and for different reasons warned that Ukraine risks becoming the point of renewed east-west tension, and many Ukrainians themselves have spoken about the grim inevitability of war, at least since 2014. But this article is about energy and climate policy, not war. I raise the issue here because, like me, you might have expected the Governor of the Bank of England to have kept a watching brief on geopolitics.

We would be wrong, then. It turns out that the chief regulator of the UK economy (the sixth largest in the world) and his predecessor were far more concerned with the putative risks from climate change than with developments in geopolitics. The Bank of England’s webpages could have been written by an XR activist. ‘Climate change creates financial risks and economic consequences,’ it claims. ‘These risks and consequences matter for our mission to maintain monetary and financial stability.’ Endless volumes of reports and links to pages after pages make the case, citing equally endless scientific reports that I have always considered to be suspect.

Put simply, I do not believe that society’s sensitivity to climate is in any way equivalent to climate’s sensitivity to carbon dioxide. The planet may well be slightly warmer, but there exists very little evidence that this is creating economic risks. On the contrary, people everywhere are becoming much wealthier. (Or were, before the pandemic.) I shall spare the word count here, but I have written about it at length in many other places if you remain unconvinced. Suffice it to say that it is logically impossible for ‘risks’ to be growing as the BoE claim while an economy is growing, which it was, even in the world’s most seemingly climate-ravaged places.

But green ideology is a fetter on public institutions’ grasp of reality. And so we should look to the origins of green ideology to try to understand what is behind the BoE’s climate activism.

It is a common misconception that the climate agenda is driven by science. But it is a matter of historical fact that green ideology sprang from the very top of global society. In the 1960s, it was the Club of Rome, a think tank formed by wealthy industrialists and their pet academics that turned their fears about overpopulation and resource-depletion into a computer simulation that forecast civilisation’s imminent collapse. And so it is today with climate change, every earlier environmental scare story issued by that simulation now having been debunked by reality.

The heart of the contemporary green ‘movement’ is known by its ugly moniker, the ‘green blob’. The entirety of it, including those parts of it that dwell on streets, owes its existence completely to the grants given by about a dozen or so billionaires’ philanthropic foundations to organisations of various kinds. From Extinction Rebellion to academic research departments, none of it would exist but for the vast torrents of cash from the likes of Jeremy Grantham, Sir Christopher Hohn and Michael Bloomberg. And it is from here that the notion that ‘climate change creates financial risks and economic consequences’ springs from, and the belief that ‘financial stability’ is functionally dependent on ‘stable weather’ is forced into the machinery of the state.

Bailey’s predecessor at the Bank of England (2013-2020), Mark Carney, previously Governor of the Bank of Canada (2008-2013), had been so impressed by multibillionaire Michael Bloomberg’s selfless philanthropy (giving away a total of $11 billion of his $82 billion fortune, significantly to green causes), he fashioned a role for the tycoon in policymaking. As Governor of both BoE and BoC, Carney was also chair of the little-known intergovernmental agency, the Financial Stability Board (FSB), where he oversaw its greening, bringing the notion of financial stability being predicated on ‘stable weather’ to financial institutions the world over. Green ideology is an infectious rot. Under the FSB, a Taskforce on Climate-Related Financial Disclosures (TCFD) was established, and an array of corporate and financial bigwigs appointed to steer it, including Bloomberg as its chair.

Put simply, TCFD aimed to support the ‘E’ in ‘ESG’ with a system of
‘recommendations’ for voluntary disclosures that companies should make to investors, much as companies are required to make statutory disclosures about the state of their operations. ESG, short for Environmental, Social, and corporate Governance, is the fashionable green-woke successor to Corporate Social Responsibility (CSR), driving shareholders to change boardroom and culture using metrics that score companies’ commitments progressive values. TCFD’s recommendations build on the notion that, since financial stability is predicated on climatic stability, companies risk profiles are alsodependent on weather. The logic here being that if a company does not have a business plan that is compatible with a changing climate, and moreover, compatible with a changing regulatory environment, investors deserve to be made aware of these risks.

This was good business. Ethical business, even. And other green billionaire philanthropists were eager to give their money away to this good cause, too. British hedge fund manager, Sir Christopher Hohn, used much of the $800million pushed through his philanthropic outfit, the Children’s Investment Fund Foundation (CIFF), to support organisations that campaign and lobby for these voluntary disclosures. CIFF founded the ‘Say on Climate’ campaign, which aimed to mobilise investors to press the companies in which they had an interest to adopt ‘climate transition action plans’, building on Hohn’s trademark shareholder activism. Between 2014 and 2020, CIFF made grants of over $23million to the Carbon Disclosure Project, and backed other shareholder and financial sector campaigning organisations partnered with the ‘We Mean Business Coalition’.  

But as sure as push comes to shove, voluntary becomes compulsory. At the COP26 meeting in Glasgow last year, Mark Carney stood in front of a screen that declared the intention to make TCFD disclosures mandatory, and for policy frameworks to ‘wind down stranded assets’ – the green movement’s term for fossil fuel investments that will become obsolete when climate policy prohibits them. He was followed by Chancellor Rishi Sunak, who declared that investment funds with assets under management worth $130trillion were aligned to the UK’s new policies.

Sunak was an employee of Hohn’s investment fund, TCI, between 2006 and 2009. And as an alumnus of such a notable activist outfit as TCI, and as Chancellor, it is inconceivable that he was unaware of the effects on the economy that ESG was already having on the economy by last autumn. ESG had driven investors away from stock in companies that make useful stuff, such as coal, oil and gas, towards high-tech, social media and companies that produce mere vapour, such as Netflix. As Bloomberg reported at the time, in the era of ESG investing, capital investment in fossil fuels had halved since the Paris Agreement, and the cost of capital to fossil fuel companies had doubled.

Amid other factors, this capital strangulation of the energy sector was the direct effect of ESG investing, green campaigning organisations, and governments and central banks actively working together to destroy the fossil fuel sector without making the policy explicit. This is indubitably the main factor behind the energy supply crisis that seemed to come out of nowhere last year to add to inflation woes by pushing energy prices up. 

A few days ago, Bailey told MPs that ‘there isn’t a lot we can do’ to stop inflation rising. But there was a lot that the BoE could have done to stop it happening, but failed to do, and instead helped in no small way to engineer this global crisis. In late 2020, the BoE published an Interim Report and Roadmap for implementing the recommendations of the Taskforce on Climate-related Financial Disclosures, which boasted of the BoE’s and UK government’s leading roles in creating ESG policy, and which ‘advocates a move towards mandatory TCFD-aligned disclosures across non-financial and financial sectors of the UK economy’.

Here’s a clue, Andrew, if you’re reading, about how you might start to address the problem of rising prices. Remove from the Bank of England all traces of environmental ideology and sever all links with the green billionaires who have pushed the notion that climate change is a ‘risk’ to the economy. It isn’t. The much greater risk than weather to the economic wellbeing of millions of British people – and billions of people throughout the world in poorer economies – is green ideology. While the likes of Hohn and Bloomberg have made billions of dollars through creating an ESG bubble via their undemocratic and undue influence in public institutions, billions of people are suffering from the effects of starving the energy sector of investment, pushing up the price of energy, transport, and food.

Here is a short film I have made about the problem. 

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Ben Pile
Ben Pile
Ben Pile is a researcher, writer, blogger. Sceptical of environmentalism. For science, against scientism.

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