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Chart of the Day: a new sub-prime ‘bubble’ threat

A 'carbon bubble' could render worthless much of the assets held by some of our biggest companies.


by Chris Marshall on Jan 20, 2012 at 11:22

Up to 80% of the assets held by energy companies could turn out to be useless, knock-down sub-prime junk.

Here’s why:

If we are to keep global warming below 2°C – a goal reaffirmed by politicians at December's Durban climate meeting – then between 2000 and 2050 we can get away with emitting 886 gigatons of carbon dioxide (GtCO2) between us. Now, we’ve used a lot since 2000, leaving a ‘Carbon Budget’ of 565 GtCO2 for the remaining years to 2050. But the world’s biggest oil and gas companies have fossil fuel reserves representing potential emissions of 745 GtCO2. 

That’s just listed companies. Then there are resources held by state bodies. Of the total reserves held between the two only 20% can be used if we are to meet the 2°C limit. If this 20% rule is applied uniformly, then only 149 of the 745 GtCO2 held by listed companies could be used unabated. The rest remains in the ground.

Comparison of the global 2°C carbon budget with fossil fuel reserves CO2 emissions potential (Source: Carbon Tracker Initiative)

Those calculations are from a report last summer from the Carbon Tracker Initiative which included several recommendations, including for a review of the way in which resource companies are valued. 

• Working with capital market regulators and investors to assess systemic climate change risks and propose practical measures to minimise these risks to market stability and the operation of an orderly market.

• Revisiting the way fossil fuel companies are valued including the accounting treatment of fossil fuel-based reserves to ensure that carbon limits are fully integrated;

• Evaluating the concentration risk facing key global markets which are currently over-weight fossil fuels (such as the UK), and how indices, benchmarks and tracking products can be reformed to protect investors

• Improving the quality and utility of disclosures required by regulators and listings authorities to ensure that future carbon risks associated with fossil fuel reserves are fully dealt with to enable investors to make informed decisions;

• Updating the way fossil fuel companies are brought to the capital markets by investment banks.

But now those worried that the next bubble in financial markets will be a carbon-based monster are appealing directly to a man who is being loaded with increasing responsibility for ensuring the financial stability of the UK: Mervyn King.

In an open letter to King, a group of more than 20 signatories make a striking point to accompany the calculations in the summer report:  ‘Five of the top ten FTSE 100 companies are almost exclusively high carbon and alone account for 25% of the index’s entire market capitalization’ – that'd be BP (BP.L), Shell (RDSb.L) and the like.

Sir Mervyn King
Chairman, Financial Policy Committee
Bank of England
Threadneedle Street
London EC2R 8AH
United Kingdom

Dear Sir Mervyn King,

The Financial Policy Committee (FPC), which you chair, was recently created to, “contribute to the Bank’s financial stability objective by identifying, monitoring, and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system.”

As the FPC develops its forward work programme, we urge it to investigate how the UK’s exposure to high carbon investments might pose a systemic risk to our financial system and what the options might be for managing this potential threat to our economic security.

The depth and breadth of our collective financial exposure to high carbon, extractive and environmentally unsustainable investments could become a major problem as we transition to a low carbon economy. Five of the top ten FTSE 100 companies are almost exclusively high carbon and alone account for 25% of the index’s entire market capitalization1. This exposure is likely to be replicated in other indices, by companies, in bank loan books and in the strategic asset allocation decisions taken by institutional investors. At present regulators are not monitoring the concentration of high carbon investments in the financial system and have no view on what level would be too high.

As policy and technology work consistently over time to reduce returns in high carbon areas while supporting low carbon ones, investing in high carbon sectors, say as an institutional investor looking to generate good returns over a 20 to 30 year period to successfully cover future pension liabilities, could result in stranded assets and poor returns. Counter intuitively, institutional investors, as well as banks, companies, mutual funds and retail investors, continue to risk exactly that by deploying significant amounts of capital into high carbon sectors, or in companies with significant exposure to them. This contradiction was observed in recent Financial Times and Guardian opinion pieces, one of which was written by the leading economist Lord Stern2. This could be another example of our capital market fundamentally mispricing assets and, as a result, building up a systemic risk that threatens long term growth.

For many investors an exposure to high carbon and environmentally unsustainable assets is not an active or an informed decision. Instead it is frequently driven by the fact that a large proportion of capital must flow into funds that aim to track the main indices. Many investors have little choice but to do this due to liquidity requirements and the desire to track average market performance. Moreover, new regulatory requirements, such as Basel III and Solvency II, can make it more difficult for investors to deploy capital into longer term assets, such as low carbon infrastructure, and simpler to invest in the status quo, even though there might be significant appetite to do the opposite. In such situations we believe that regulators have a role to play in protecting investors from systemic risk.

To understand the extent of the potential problem we need to assess global, and particularly UK and European, financial exposure to high carbon, extractive and environmentally unsustainable investments. While the exposure of listed companies is beginning to be understood3, that of non-listed companies, bank loan books and institutional investor portfolios is significantly less appreciated.

We then need to look at how exposure and relative values, between high carbon and low carbon investments, could change over time and how this might affect different parts of the financial system and the system as a whole. For example, how might a sudden change in relative values be different from a longer period of transition? The purpose of this work should be to evaluate the health, soundness and vulnerabilities of the financial system as we proceed with a low carbon transition.

After these studies are completed, we need to develop a strategy that could manage the challenges that might arise as a result of an over-exposure. If this is indeed akin to a systemic risk in our financial system, what macroprudential instruments might be designed and deployed to help to restrain the build-up of risk? Could we change the risk-weightings used to calculate capital requirements? Could we use different discount factors for high carbon investments? What steps can be taken in each part of the financial system? What is the role of regulators – nationally and internationally? What might we do to create sustainable, low carbon alternatives for investors with the right risk-reward profiles? And how could we predict and manage the risks associated with sudden changes in exposures and relative values?

Given its significance over the long term, we hope that the FPC can incorporate this work into its forward programme, with the appropriate expertise and personnel. There are also a variety of organisations, such as the Carbon Tracker Initiative, Oxford University’s Smith School of Enterprise and the Environment, Climate Change Capital, the London School of Economics and Anglia Ruskin University’s Global Sustainability Institute, that are working in this area and they would be able to develop collaborative partnerships with the FPC to help enhance resilient low-carbon economic development, as well as reduce systemic risk in the UK financial system.

We look forward to hearing from you and the Committee in due course.

Yours sincerely,

Paul Abberley

Chief Executive

Aviva Investors London and Global Investment Solutions

Peter Ainsworth

Chairman, Conservative Environment Network

Ben Caldecott
Head of Policy, Advisory

Climate Change Capital

Catherine Cameron

Agulhas: Applied Knowledge

James Cameron
Founder and Vice-Chairman

Climate Change Capital

Paul Ekins
Professor of Energy and Environment Policy

UCL Energy Institute, University College London

Zac Goldsmith MP

Member of Parliament for Richmond Park & North Kingston

The Rt Hon. John Gummer, Lord Deben

Former Secretary of State for the Environment

Catherine Howarth
Chief Executive


Dr Aled Jones
Director, Global Sustainability Institute

Anglia Ruskin University

Mark Kenber
Chief Executive

The Climate Group

Sir David King
Director, Smith School of Enterprise and the Environment

University of Oxford

Jeremy Leggett

Solar Century and Carbon Tracker Initiative

Nick Mabey
Chief Executive


David Nussbaum
Chief Executive


John Sauven
Executive Director

Greenpeace UK

Penny Shepherd
Chief Executive

UK Sustainable Investment and Finance Association

Paul Simpson
Chief Executive Officer

Carbon Disclosure Project

Matthew Spencer

Green Alliance

Dimitri Zenghelis
Senior Fellow, Grantham Research Institute
London School of Economics & Political Science

The collection of signatories adds: ‘This could be another example of our capital markets fundamentally mispricing assets and, as a result, building up a systemic risk that threatens long term growth.’

The group warn that long-term institutional investors such as pension funds may find that if they continue to invest in unsustainable areas they are left holding ‘stranded assets’ with poor returns.

The argument is compelling. But the risk is that UK regulators – faced with so many immediate concerns – will dismiss the concerns as green, conspiratorial and bonkers (albeit not in so many words).

27 comments so far. Why not have your say?

Alan Tonks

Jan 20, 2012 at 12:20

It really is mind blowing stupidity; we have Carbon bubbles and Mervyn King ensuring the financial stability of the UK, who is kidding who.

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Clive Menzies

Jan 20, 2012 at 12:41

Stupidity indeed, not least because the masochistic carbon emission reductions, committed to by the UK government, will have little effect on climate.

According to NASA’s satellite data, sea levels show a 6mm decline in 2010 and AMSR-E Global Sea Surface Temperature Variations indicate that oceans are cooling. Studies, by three separate teams from the National Solar Observatory and the Air Force Research Laboratory, are suggesting the next solar cycle (25) will be similar to the Dalton or Maunder Minima. These minima occurred during the Little Ice Age which saw temperatures plunge after the relatively high temperatures of the Medieval Warm Period. Scientists studying oceans demonstrate that the recent warming, to the end of the last century, is part of the natural cycle of oceanic oscillations and predict a thirty year cooling phase. The CLOUD experiment at CERN suggests that all the warming of the late twentieth century could be accounted for by a small percentage reduction of reflective cloud cover (albedo) – more of the sun’s rays reached the earth, warming the planet. Indications are that albedo is growing once more. Clearly, the computer climate models on which climate alarmism is based are flawed because they fail to model these natural processes correctly.

The mind boggling amounts of money committed to the myth of man-made global warming, in terms of flawed research, renewable subsidies etc., have contributed to public sector deficits and led to a massive misallocation of resources and management focus. Climate change policy bears no relationship to the underlying science.

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Anthony Smith

Jan 20, 2012 at 13:02

In reality they will carry on emitting carbon regardless of the targets and either we're all doomed or the global climate cycle will compensate.

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Jan 20, 2012 at 14:19

Well said Clive Menzies. The oscillations in the ocean temperatures - the North Atlantic Oscillation and the Pacific Decadal Oscillation - have a very large influence on the weather and climate. None of the so-called research that I have come across mentions these oscillations.

Man made global warming is not the cause of the Antarctic ice melting. Only the other day our esteemed (NOT!) BBC reported that a British project is under way to drill deep into the ice to an under-ice lake of fresh water!! Why is the fresh water lake there? Well, because under the oceans there is lots of hot volcanic activity!!!

Academics at East Anglia fudged results of research into cuases of climate fluctuation. A bunch of tax-seeking politicians hijacked the whole project and have proceeded to brainwash the public with pure hogwash without thinking through the consequences of their actions.

The whole carbon free nonsense is going to cost the world a lot of GDP and social progress.

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Clive Menzies

Jan 20, 2012 at 14:27

I gave a presentation to the CISI in September 2010, "Is Carbon Trading the next Sub-prime crisis?":

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Anonymous 1 needed this 'off the record'

Jan 20, 2012 at 14:29

Actually, trufflehunter, an independent firm was brought in to review the evidence following the "fudging" accusations - and found that the conclusions held.

So whether or not you believe in the premise of this article, you can't chuck out disproved allegations.

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Clive Menzies

Jan 20, 2012 at 14:47

Anonymous1, clearly you're not familiar with the three inquiries which were characterised by Lord Turnbull, as a superficial and one as a whitewash:

If you want to understand the level of corruption of the science, reading the Climategate emails for yourself:

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Clive Menzies

Jan 20, 2012 at 15:17

The parliamentary inquiry was rushed and inadequate (leaving the science and wrongdoing to the other inquiries) because of the impending election. Graham Stringer (the only committee member with scientific qualifications) voted against all the findings.

The other inquiries were organised by the University of East Anglia which had a clear vested interest in the perpetuation of funding for the Climatic Research Unit. Lord Oxburgh who chaired one, as Chairman of a renewable energy company, had a conflict of interest. There was cherry picking of scientific papers examined and the potential contravention of the Freedom of Information Act, by the alleged deletion of emails requested by Dr Phil Jones, was ignored. The former Information Commissioner said there was prima facie evidence of a breach.

Furthermore, there has been no official examination of the scientific basis of climate change policy. To many have too much to lose for the truth to be acknowledged.

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Jan 20, 2012 at 15:28

Thanks for the links Clive M.

With so much money committed to so-called Green projects vested interests are not going to try and discover "the truth". All manner of media manipulation can be expected. When politicians also get involved in the allocation of capital a major economic distortion can never be too far away! Also, too many useless bureaucrat jobs are created to oversee the climate change policy nonsense.

The UK public, and others, will eventually realise the high cost of Solar and Wind Power when their energy bills become totally unaffordable.

Talking of "bubbles" the biggest bubble that I see is governments and their bonds.

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Anonymous 1 needed this 'off the record'

Jan 20, 2012 at 16:21

Actually, I'm thinking of a triplicate of US-based investigations which dismissed claims of wrongdoing or misconduct:

US EPA report

National Science Foundation

Inspector General of the Dept of Commerce

That'll do for me.

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Anonymous 2 needed this 'off the record'

Jan 20, 2012 at 16:37

'If we are to keep global warming below 2°C'

Do the ecomentalists understand how absurd such a statement is.

'We' can no more do this than we can stop it raining or stop a high tide.

Its time we binned all this crap, along with all those who ride its gravy train.

(Prescott to name just one)

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Jem Cooper

Jan 20, 2012 at 16:46

The article and the letter to which it refers are a silly, uninformed misrepresentation.

They ignore the obvious fact that coal is likely to bear the brunt of any reduction in fossil fuel usage. Power generation is almost its only application and it produces much more carbon dioxide than natural gas per kilowatt hour. The major assets referred to are nearly all in oil and gas because of the much higher value per carbon atom of these more versatile fuels. These assets are far more likely to increase in value as new discoveries are harder to find and more expensive to exploit.

The article ignores the high probability that carbon capture will be widely adopted. It is a truism that if we want to burn fossil fuel without raising atmospheric carbon dioxide concentration, we need to capture the carbon dioxide produced (either at source for large emitters, or even from the atmosphere for planes and cars).

We all hope battery technology will improve enough to make electric cars attractive, but if it does not I for one would pay a very hefty price, perhaps £5/litre of fuel ($3200/tonne of CO2 produced) before I abandoned my car. Fortunately it is possible to capture carbon dioxide from the atmosphere for much less than that. The problem is not a lack of technology but the lack of an economic incentive to apply it.

My proposal to oblige all fossil fuel producers to contract for the capture of an amount of carbon dioxide equal to a rising proportion of that produced from the fuel they sell, would provide that economic incentive. There would be no need to agree national targets, strategies, road maps or complex subsidy schemes. Alternative low carbon energy sources would survive only on their own economic merits in comparison to fossil fuel with carbon capture.

However, nobody will listen to my proposal so the reality is that the nations of the world will continue to emit ever increasing amounts of carbon dioxide whatever they might say they will agree to, because it is in their selfish interest to do so. The reductions the article refers to are wishful thinking without a more attractive proposition than national carbon caps.

Although it seems very likely from basic physics that increased carbon dioxide concentrations raise global temperature, it much is less clear that this is a bad thing.

It is indisputable that at the depths of the ice ages the carbon dioxide concentration was much lower. It is also indisputable that vast tracts of Europe and North America were as uninhabitable then as Greenland is today. Why do we always see change as a threat rather than an opportunity?

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Ken Howard

Jan 20, 2012 at 16:47

Belief and disbelief in man made climate change have become new religions with their adherents sticking to their fixed positions regardless of the evidence on either side of the debate. One thing we know for sure is that the science is unclear with evidence on both sides.

So, I ask you.... is it more prudent, in the absence of a crystal ball, to assume that we need to cut back, in which case the penalty for being wrong is that we will have used fewer of the earth's resources to fuel our economies... or that there is no problem with continuing to burn fossil fuels unabated, the penalty for which may be a global catastophe?

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Jan 20, 2012 at 16:47

All infiltrated by the vested interests! With the Keystone pipeline now shelved by Obama its good to see politics triumphing over the the truth yet again. The US is home to many of the green energy vested interests, so reports from quasi government organisations dont cut much ice with me.

We need fossil fuels; if we dont have them we all starve - you cant plough a field with an electric tractor. How about the public cutting back on all the unnecessary airline journeys for holidays; that would help save carbon, but it just wont happen. Nor will people willingly give up their cars. Pretending that so-called green energy is going to save us is like King Canute trying to hold back the waves of the ocean. Reuters reported today that 23million more Chinese passed their driving tests in the last 12 months. I hear that Saudi Arabia will soon have domestic consumption sufficient to remove the surplus they have for exports. Whatever we do in the West is irrelevant when you take note of what is coming down the pike.

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Jan 20, 2012 at 17:15

We all know there is evdence wither way, that's what fuels great scientific debate and steers towards the truth.

Sadly, as Einstein noted, the direction of science and the ultimate decisions are increasingly driven by politics. The right thing to do is no longer top of the list.

That aside, clearly, whether global warming is truth or not, it serves us to promote energy efficiency, with the ultimate political aim of being less reliant on the middle east's black gold. Whichever path you take, it's gonna cost!!

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Jan 20, 2012 at 17:43

Two exponential curves are about to go head-to-head. Demand for oil is rising rapidly as the less developed world catches up withe the West. New oil discoveries represent the other exponential curve pointing in the opposite direction. When these two meet, $300+ per barrel oil will be the market price; this is going to happen a lot sooner than we think.This price will sort out a lot of the problem with carbon emmisions, if that is what the Green activists are worried about.

Saudi Arabia is drilling in its coastal waters now for more reserves. The massive Gahwah oil field is almost watered-out.

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Jan 21, 2012 at 10:42

Anyone rmember the story of the king's new clothes? - When I get bombarded every week by someone telling me I can make a fortune in Carbon Credit trading, I start to worry.

And I still haven't worke out exactly what is being 'traded'. The whole thing looks to me like another stealth taxt, but with parasties other than govenments creaming off the top.

Not single ounce of carbon is saved, it's just that thoce burnng more than their 'share', burn someone else's instead: But they have to pay for it. Thye have to pay the 'agent', who passes some on to the actual 'permit' owner.

Scam scam scam

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Alan's opinion via mobile

Jan 21, 2012 at 14:59

ClothKap2: Damn right it's a scam!

But it's just one scam among many new ones that keep popping up from time to time, helped along by scamster governments.

The must think we are all mugs to believe this carbon emission/capture/trading nonsense that serves only to strip ordinary folk of yet more taxes and put ever-higher profits into the pockets of big business.

What doesn't seem to be mentioned in all the carbon propaganda is that by burning coal (fossilized trees) all that is being emitted is the original carbon dioxide that was extracted by the trees from the atmosphere when the coal was in tree form and put back into the atmosphere again - meaning coal is carbon neutral! So what's all this carbon credit trading all about? - just a big racket!

If they seriously wanted to reduce the amount of carbon dioxide in the atmosphere for some spurious reason or other, the answer is simple, just plant millions of trees!

That would help to solve the youth unemployment problem at a stroke and give us all a much better environment, but then they could not attach punitive taxes to that or line the pockets of big business with undeserved extortionate profits, could they?

So the myth will continue to be supported ...

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Clive Menzies

Jan 21, 2012 at 15:55

Anonymous1, as I said, too many have too much to lose and the establishment has closed ranks to perpetuate the man-made global warming myth. Read the emails yourself rather than rely on those with a vested interest.

To see how the scientific establishment suppresses contrary views and evidence, Hal Lewis's resignation letter from the American Physical Society is instructive:

Sent: Friday, 08 October 2010 17:19 Hal Lewis

From: Hal Lewis, University of California, Santa Barbara

To: Curtis G. Callan, Jr., Princeton University, President of the American Physical Society

6 October 2010

Dear Curt:

When I first joined the American Physical Society sixty-seven years ago it was much smaller, much gentler, and as yet uncorrupted by the money flood (a threat against which Dwight Eisenhower warned a half-century ago).

Indeed, the choice of physics as a profession was then a guarantor of a life of poverty and abstinence—it was World War II that changed all that. The prospect of worldly gain drove few physicists. As recently as thirty-five years ago, when I chaired the first APS study of a contentious social/scientific issue, The Reactor Safety Study, though there were zealots aplenty on the outside there was no hint of inordinate pressure on us as physicists. We were therefore able to produce what I believe was and is an honest appraisal of the situation at that time. We were further enabled by the presence of an oversight committee consisting of Pief Panofsky, Vicki Weisskopf, and Hans Bethe, all towering physicists beyond reproach. I was proud of what we did in a charged atmosphere. In the end the oversight committee, in its report to the APS President, noted the complete independence in which we did the job, and predicted that the report would be attacked from both sides. What greater tribute could there be?

How different it is now. The giants no longer walk the earth, and the money flood has become the raison d’être of much physics research, the vital sustenance of much more, and it provides the support for untold numbers of professional jobs. For reasons that will soon become clear my former pride at being an APS Fellow all these years has been turned into shame, and I am forced, with no pleasure at all, to offer you my resignation from the Society.

It is of course, the global warming scam, with the (literally) trillions of dollars driving it, that has corrupted so many scientists, and has carried APS before it like a rogue wave. It is the greatest and most successful pseudoscientific fraud I have seen in my long life as a physicist. Anyone who has the faintest doubt that this is so should force himself to read the ClimateGate documents, which lay it bare. (Montford’s book organizes the facts very well.) I don’t believe that any real physicist, nay scientist, can read that stuff without revulsion. I would almost make that revulsion a definition of the word scientist.

So what has the APS, as an organization, done in the face of this challenge? It has accepted the corruption as the norm, and gone along with it. For example:

1. About a year ago a few of us sent an e-mail on the subject to a fraction of the membership. APS ignored the issues, but the then President immediately launched a hostile investigation of where we got the e-mail addresses. In its better days, APS used to encourage discussion of important issues, and indeed the Constitution cites that as its principal purpose. No more. Everything that has been done in the last year has been designed to silence debate

2. The appallingly tendentious APS statement on Climate Change was apparently written in a hurry by a few people over lunch, and is certainly not representative of the talents of APS members as I have long known them. So a few of us petitioned the Council to reconsider it. One of the outstanding marks of (in)distinction in the Statement was the poison word incontrovertible, which describes few items in physics, certainly not this one. In response APS appointed a secret committee that never met, never troubled to speak to any skeptics, yet endorsed the Statement in its entirety. (They did admit that the tone was a bit strong, but amazingly kept the poison word incontrovertible to describe the evidence, a position supported by no one.) In the end, the Council kept the original statement, word for word, but approved a far longer “explanatory” screed, admitting that there were uncertainties, but brushing them aside to give blanket approval to the original. The original Statement, which still stands as the APS position, also contains what I consider pompous and asinine advice to all world governments, as if the APS were master of the universe. It is not, and I am embarrassed that our leaders seem to think it is. This is not fun and games, these are serious matters involving vast fractions of our national substance, and the reputation of the Society as a scientific society is at stake.

3. In the interim the ClimateGate scandal broke into the news, and the machinations of the principal alarmists were revealed to the world. It was a fraud on a scale I have never seen, and I lack the words to describe its enormity. Effect on the APS position: none. None at all. This is not science; other forces are at work.

4. So a few of us tried to bring science into the act (that is, after all, the alleged and historic purpose of APS), and collected the necessary 200+ signatures to bring to the Council a proposal for a Topical Group on Climate Science, thinking that open discussion of the scientific issues, in the best tradition of physics, would be beneficial to all, and also a contribution to the nation. I might note that it was not easy to collect the signatures, since you denied us the use of the APS membership list. We conformed in every way with the requirements of the APS Constitution, and described in great detail what we had in mind—simply to bring the subject into the open.

5. To our amazement, Constitution be damned, you declined to accept our petition, but instead used your own control of the mailing list to run a poll on the members’ interest in a TG on Climate and the Environment. You did ask the members if they would sign a petition to form a TG on your yet-to-be-defined subject, but provided no petition, and got lots of affirmative responses. (If you had asked about sex you would have gotten more expressions of interest.) There was of course no such petition or proposal, and you have now dropped the Environment part, so the whole matter is moot. (Any lawyer will tell you that you cannot collect signatures on a vague petition, and then fill in whatever you like.) The entire purpose of this exercise was to avoid your constitutional responsibility to take our petition to the Council.

6. As of now you have formed still another secret and stacked committee to organize your own TG, simply ignoring our lawful petition.

APS management has gamed the problem from the beginning, to suppress serious conversation about the merits of the climate change claims. Do you wonder that I have lost confidence in the organization?

I do feel the need to add one note, and this is conjecture, since it is always risky to discuss other people’s motives. This scheming at APS HQ is so bizarre that there cannot be a simple explanation for it. Some have held that the physicists of today are not as smart as they used to be, but I don’t think that is an issue. I think it is the money, exactly what Eisenhower warned about a half-century ago. There are indeed trillions of dollars involved, to say nothing of the fame and glory (and frequent trips to exotic islands) that go with being a member of the club. Your own Physics Department (of which you are chairman) would lose millions a year if the global warming bubble burst. When Penn State absolved Mike Mann of wrongdoing, and the University of East Anglia did the same for Phil Jones, they cannot have been unaware of the financial penalty for doing otherwise. As the old saying goes, you don’t have to be a weatherman to know which way the wind is blowing. Since I am no philosopher, I’m not going to explore at just which point enlightened self-interest crosses the line into corruption, but a careful reading of the ClimateGate releases makes it clear that this is not an academic question.

I want no part of it, so please accept my resignation. APS no longer represents me, but I hope we are still friends.


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Ken Howard

Jan 21, 2012 at 16:00

OMG ... time for primary school natural history lessons.

You see, what happened, a long, long time ago (on a planet... etc) in the Carboniferous age, before there were people, was that, for millions of years, there were massively high concentrations of CO2 in our atmosphere ..... very good for plants... not good for people. The plants used lots and lots of the CO2, the concentrations dropped and then it was ok for people.

Question. If we put it all back will it be good for plants or....people?

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Clive Menzies

Jan 21, 2012 at 17:44

Ken, rather too simplistic I'm afraid. Yes CO2 levels have been as high as 7,000 parts per million in the distant past.

By most studies, human CO2 emissions represent about 3% of the annual increase in CO2 but there are some scientists who doubt that human CO2 emissions have much effect overall between natural absorption and emission of CO2. For the last 800,000 years CO2 concentrations in the atmosphere have FOLLOWED rises in temperature by approx. 800 years (warmer oceans release CO2).

At the current 392 ppm, we've an awfully long way to go before CO2 would represent a threat to human existence. If CO2 concentrations drop below 150 ppm, nothing would grow and we'd all perish.

Primary school education is insufficient to understand our complex climate system.

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Alan's opinion via mobile

Jan 22, 2012 at 01:30

Thank you Clive Menzies for your most enlightening posts - well researched and put together.

Thanks too for Ken Howard's contribution on the early evolution of the planet.

I confess I do not know the precise point at which the level of CO2 in the atmosphere would make human life extinct. But clearly there was a crossover point which allowed both plants and the evolution of humans to become possible and for both to survive. Since we appear to be near the bottom of the scale of CO2 saturation, that would imply a much higher level than we currently experience would not harm us much at all, the inference being that we evolved at much higher concentrations than this and we're all still here and reproducing at a very rapid rate. And to add to that, we have countless billions more pairs of lungs in both animals and humans all breathing out CO2 than we have had at any time in the past.

So I feel my suggestion that millions of trees should be planted, perhaps not just here but worldwide, would help enormously to keep CO2 in the atmosphere under some control. After all, throughout the world now, and for many generations, billions of CO2 absorbing trees have been felled and not replaced in anything like the same numbers. But despite that, CO2 remains at a relatively low level. So a major tree planting exercise could surely do no harm by streaming out some useful oxygen for us all, as well as attracting some more useful rainfall where it's needed.

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Anonymous 3 needed this 'off the record'

Jan 22, 2012 at 14:16

Global warming does not surprise me in the least.

Global cooling would not surprise me either.

If neither were happening, I would be EXTREMELY surprised.

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Paul 2

Jan 22, 2012 at 14:54


An interesting observation about CO2 coming out of many more lungs now than in the past. What then about other gases coming out from elsewhere? It reminds me of an expression often used by Africans to describe where exactly talking comes out of when things such as climate change are being discussed.

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smoking gun

Jan 22, 2012 at 18:14

I'm no scientist, but I read somewhere not too long ago that although CO2 is supposedly the main culprit for global warming, the second biggest offender is apparently water vapour and if I remember correctly, most of this came from the worlds oceans through natural evaporation. That's why it rains as well, I think. I honestly can't see how anyone could control this so I reckon we are all doomed.

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Jan 22, 2012 at 18:56

Aye, we are all doomed! So, lets just get on and enjoy the party- its probably good for another 50 years! Now, let me see where did I put that brochure for a Humvee; you need one in London these days with all the road humps.

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smoking gun

May 10, 2013 at 17:26

I hope Trufflehunters Humvee isn't run on diesel as WHO (not NHS) have recently stated that diesel fumes is one of the biggest causes of lung cancer.

And there was I thinking it was the odd fag or two or maybe even asbestos. Will they'll ban diesel soon?

It really is getting to the stage where you do not know who to believe about anything. Even on jam labels. Saw Fake Britain today and label said fresh strawberries from Suffolk; invoiced said frozen srawberries from China. Well maybe there is an area in China called Suffolk.

So I agree Trufflehunter, it may sound selfish but I intend to enjoy my 3 score years and ten my way.

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