In his 2018 letter to shareholders, Warren Buffett sagely counseled, “If you mix your politics with your investment decisions, you’re making a big mistake.”
We’ve long recognized such wisdom. As markets care little for party politics. Preferring to focus on earnings, productivity, efficiency, and other achievement-oriented metrics that rarely resonate through the political spectrum.
Unfortunately, many have ignored Mr. Buffett. Allowing politics to invade their daily lives.
The Kabuki Theater of American politics, and its interminably caustic media coverage, has become like Norway’s summer sun. Omnipresent.
We get it. President Trump is a blowhard. Lacking couth. Diplomacy. The placid demeanor expected from the Oval Office. The media abhors him. The right is terrified of him. The left detests him. And since 2016’s election, there is not a move this administration has made that has been left unscathed by critics.
And yet, the acrimony has become all-pervasive. When did we become such political animals?
Never has America observed such seismic levels of antipathy from an overtly vocal plurality of the population. To the point where one can hardly discern the facts from the attendant discord.
Case in point? The 2017 withdrawal from the Paris Climate Agreement (PCA). The blood-curdling castigation of which led many impartial observers to cease paying attention.
When the day-by-day acrimony so supersedes the scope of events, much of it rings hollow.
First of all, the earth’s healthy environment is a critical treasure not to be taken for granted. It is worth fighting for. Can there be more than a small facet of society that doesn’t agree as much?
The 2017 announcement was condemned among much of the public, environmentalists and world leaders. Who took turns lobbing acerbic accusations regarding Trump’s war on humanity, the planet, and everything that is right and just.
But hold on.
Those choosing to impartially review the facts in the cogent manner of a detached analyst may recognize the counterbalance to such hyperbole. May even come to recognize that both sides are right. And wrong. Lacking only the ability to concede common ground.
Yet again, as everyone runs to their corners, politics had trumped any opportunity for serious discourse. So let’s survey the facts.
By withdrawing from the PCA, the administration did not declare war on the earth’s ecosphere. In fact, the administration stated that protecting the environment is a noble goal. One worth pursuing. But it continued by stating that the PCA is not the most effective means of accomplishing that goal.
Why? First, understand what the PCA seeks to accomplish.
The PCA’s primary objective is to combat climate change by keeping global temperature levels below two degrees Celsius above pre-industrial levels. And to limit the temperature increase to 1.5 degrees Celsius.
Further, the PCA establishes “Nationally Determined Contributions,” where each nation in the accord must endeavor to reduce greenhouse gas emissions, and regularly show their progress.
Unfortunately, like most non-binding agreements set by the United Nations, the PCA lacks enforcement power.
The Nationally Determined Contributions are not legally binding. Are capable of being adjusted as each countries deems necessary. In fact, nothing in the agreement ensures that an individual nation will meet its promise or hit its objectives. Nor is there any enforcement power against those who fail to do so.
In other words, the PCA has been established to run on the honor system. When nations fail to meet their targets, they get pressured by the international community. Or, they can simply adjust their targets.
Unfortunately, history shows that the United States is often the last man standing when such unenforceable promises have been established. Even as it pays the tab for the promise breakers.
Impartial observers of such Kabuki Theater might ask, why wasn’t the “agreement” passed as a “treaty” so that enforcement would be binding?
To which the answer would be that the U.S. Senate would never have passed the agreement as it stands. Because the PCA would force U.S. regulatory agencies to impose harsh and asymmetric mandates against the domestic energy sector and corporate community. While handing billions, if not trillions, of U.S. tax-payer dollars to emerging market regimes in transfer payments. On top of the trillions in foreign aid the U.S. already provides. Much of which goes to regimes who have no intention of following the tenets of the accord. Nor possessing a track record of using such transfer payments for the environment, let along anything else of collective benefit.
For all his good intentions, President Obama — the PCAs primary architect — knew that his legislature would never sign on. Because unregulated global accords like the Paris Climate Agreement end up being undemocratic and economically inefficient. Especially considering that some of the world’s biggest environmental offenders will not be asked to do anything for another decade and a half. The very nations whose populations need it most.
Critics of the accord abhorred the asymmetric burdens assigned to the United States.
For instance, the agreement forces the U.S. to close all coal plants. Even as Russia, China and India continue to build more. In fact, despite being a PCA assignee, China now accounts for 45 percent of global coal-based electricity generation. With coal-based power sources in China still growing by more than six percent per year.
Worse, The Institute for Energy Economics and Financial Analysis reports that China’s financial institutions are providing $36 billion in funding to build coal power plants outside the country. China has committed or offered funding for 102,000 MW of coal-based electricity, mostly in Pakistan, South Africa, Bangladesh, and Vietnam.
Where’s the outcry? The screams of hypocrisy?
Further, the agreement offers little oversight of the U.S. taxpayer money that will go to the U.N., nor where it will be sent in the Third World. Allowing some corrupt regimes to steal it and build more Oceanside villas. Just as these same regimes have often done with moneys sent for food and healthcare staples.
And given global pollution output, there’s little reason that the U.S. should be singled out when it does not rank among the worst offenders. Four-fifths of global greenhouse gas emissions come from the developing world.
There are roughly 300 million children suffering from asthma around the world. Only six million of them live in the United States. So, while the U.S. accounts for four-and-a-half percent of the world’s population, only two percent of asthmatic children live therein. Though the U.S. was to be held to the most stringent standards of all nations within the agreement. While simultaneously being asked to pay out to those doing the least.
And yet, such counterproductive truths largely escaped us as politicians sought to seal their environmental legacies. Or simply to castigate an administration they hated. Though such truths did not escape the attention of The New York Times, which revealed in 2014, “The driving force behind the new deal was not the threat of sanctions or other legal consequences. It was global peer pressure.”
Such peer pressure would have been costly.
The Heritage Foundation described the Paris Climate Agreement as a job- and manufacturing-killing boondoggle that would engender a $2.5 trillion hit to America’s GDP by the year 2035.
And The Competitive Enterprise Institute reported that “the United States cannot comply with the Paris Agreement and pursue a pro-growth energy agenda,” because it “would destroy U.S. manufacturing’s energy price edge.”
And to what benefit?
MIT’s Joint Program on the Science and Policy of Global Change calculated that the Paris Agreement might bring a 0.2 degrees Celsius reduction — by the year 2100. Danish economist Bjorn Lomborg makes it .036 Fahrenheit by 2100 — at a cost of $1 trillion per year. Neither number comes close to addressing what climate alarmists insist is necessary. And both depend on virtually every country in the agreement to live up to undefined, non-policed, unregulated promises.
By endeavoring to hit such negligible bogeys, the U.S. economy was projected to shed nearly three million jobs in keeping up with the accord’s unilateral standards. And if history is any guide, the U.S. would be among the few global participants to abide by every detail in what is an extremely arbitrary agreement. An agreement that asks the rich to donate time, treasure and economic output. While asking the world’s biggest offenders to do nothing for years. And provides no systematically accurate means of measuring accountability.
Even before it pulled out of the Paris Agreement, the United States had contributed $1 billion to the Green Climate Fund. China, India and Russia? No contributions at all. Do we think that’s going to suddenly change?
How can such a pact be viewed as democratic? Or viewed as anything but an effort to extort some nations for the benefit of the offenders?
Still, despite the withdrawal, the U.S. will remain the global leader in clean and renewable energy innovation. Nor is the U.S. about to stop innovating in that regard. As the president himself said, we will still “be the cleanest and most environmentally friendly country on Earth.”
A statement clearly evidenced by the nation’s record renewable capacity growth.
Solar ranked as the number one source of net new U.S. electric generating capacity in 2016. In the first quarter of 2017, wind capacity grew an impressive 385 percent year over year. The “clean electricity” sector now employs more Americans than does fossil fuel electricity generation. None of which was accomplished through some international agreement. But by the communities, corporations and markets that demanded it. And given the momentum, solar and wind turbine manufacturers will likely continue to perform well as renewable energy costs decline and battery storage technology improves.
Following the 2017 announcement, Trump’s critics would have you believe he’d pulled the plug on all clean and renewable energy development. Which couldn’t be further from the truth.
Supporters and critics generally agree that the United States was taking on the lion’s share of the agreement’s constraints over the next decade. As the global community’s biggest polluters — like China, Russia and India — were not even asked to consider participating until 2030 and beyond.
Still, the agreement’s supporters have railed against the optics conveyed by the world’s largest economy pulling out. Leaving the global community to do one of two things: condemn the United States for its shortsightedness and lack of leadership, or attempt to create a climate-oriented agreement that doesn’t unduly punish the United States and its taxpaying citizens for being the world’s largest (though not the dirtiest) economy. All of which allowed the PCA’s critics to inveigh against the accord as another globalist re-distributive shakedown.
All people, left and right, foreign and domestic, surely want the earth to remain a beautiful place for a millennia of generations to come. But in order for that to occur, such agreements must be tenable for all participants. Cannot unduly drive up the electricity bills of one nation’s urban inhabitants, as the PCA would have, in order to subsidize the energy bills of another nation that is expected to accomplish little to nothing over the next decade and a half.
But, that’s where politics runs afoul of diplomacy.
Viewed through the lens of political opposition, every move harbors vile intentions. Whereas caring, forward-looking and detached partners should surely be able to find some middle ground. Or will this, like most everything else in our hyper-partisan cultural landscape, represent one more area of ongoing discord. One more battleground upon which rational human beings charge each other. Verbal bayonets at the ready. Prepared to shoot first and question later.
At heart, we are all environmentalists. But some, due to economic or lifestyle considerations, are forced to bring more pressing issues to the fore. Like jobs. Food on the table. Shielding young children from the wrath of un-air conditioned, 100-degree days.
When did we begin politicizing everything? Painting every decision made by our political opposites as counterfactual, inhumane, or anti-everything?
Love him or hate him, this president was elected by many of those whose immediate needs wreak of the urgency of the here and now. If he’s as bad as his critics charge, it will be a quick four years. Or an impeachment.
Till then, there has to be a means of allowing him to support constituents while working towards the greater, long-term good. If there is not? Then certainly we are too divided to even consider such grandiosity as saving the planet. Not if we can’t even save ourselves from each other.