Why fossil fuels are ethical and their opponents aren’t

Taking into proper consideration advantages and benefits as well as costs and disadvantages, any conventional investment portfolio shouldn’t merely consider fossil fuels, their producers and consumers; they should underpin any portfolio that claims to be ethical. These portfolios should also shun as unethical the producers of intermittent and hence unreliable (“renewable”) energy.
Chris Leithner

Leithner & Company Ltd

I value criticism. Among other things, it can unwittingly reconfirm that I’ve said something worth saying; it can also reveal that I’ve left something important unsaid. According to one recent critic, “the second half of (How we’ve prepared for the next bust, 28 November) is a fantastic work of fiction. There is of course no need to account for the costs that the minor warming of the planet has already incurred and will continue to do.” Another detractor, in reaction to The factual case for fossil fuels (12 December), added: “as (is) typical with every ‘analysis’ Chris writes on this topic, the economic and social costs of climate breakdown are ignored, making it completely worthless.”

Disparagement is easy, whereas “factfulness” is demanding. Yet what these critics tacitly request is eminently reasonable – and, ironically, precisely what the “climate action now!” campaign conspicuously lacks and pointedly refuses to provide: a framework that not merely takes explicitly into consideration but also evaluates, from ethical as well as empirical standpoints, hydrocarbons’ and intermittent energy’s benefits (“pros”) and costs (“cons”).

My previous wire summarised hydrocarbons’ tremendous advantages and benefits. Alex Epstein’s provocative – and excellent – book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas – Not Less (Penguin, 2022) details them – and also provides a framework, which I adapt, to weigh their “pros” and “cons.”

Morally as well as empirically, I show that hydrocarbons’ advantages (which the conventional wisdom has strenuously denied) greatly outweigh their disadvantages (which it has wildly exaggerated). As a result, and considered dispassionately (which it doesn’t), fossil fuels don’t merely pass a cost-benefit analysis: they do so ethically, factually and with flying colours.

This result encapsulates what Epstein calls “a moral case for a fossil future … If you want to make the world a better place, one of the best things you can do is (advocate) more fossil fuel use – more burning of coal, oil and natural gas.” I add that the best thing you can do is to put your money where your mouth is.

The implications for investors are therefore profound. Taking into proper consideration advantages and benefits as well as costs and disadvantages, any conventional investment portfolio shouldn’t merely consider fossil fuels, their producers and consumers; they should underpin any portfolio that claims to be ethical. These portfolios should also shun as unethical the producers of intermittent and hence unreliable (“renewable”) energy.

The Case in Brief

The order of Table 1’s rows summarises my moral case for hydrocarbons.

Their most important advantage and benefit (hence the #1 ranking in the table) is their ability to improve the material welfare of the billions of desperately poor people around the world. This ability is unique: intermittent and thus unreliable (so-called “renewable”) energy lacks it.

Table 1:

The Moral Case for Fossil Fuels – and against “Renewables”

As I emphasised in my previous wire, as they did first for Britons, then Americans, then Australians, etc., and most recently for many Chinese, hydrocarbons feed the infrastructure and machines that propel nations’ escape from poverty. As I also demonstrated, neither technically nor financially can intermittent and unreliable (“renewable”) energy underwrite the eradication of mass poverty.

Secondarily but still importantly, for the same reasons “renewables” can’t and thus won’t support the continuation (never mind the increase) of prosperity in wealthy nations such as Australia.

Finally, it’s true but relatively unimportant: hydrocarbons emit CO2, which, on balance, likely helps to warm the climate. In other words, and compared to the eradication of poverty in poor nations and the continuation of prosperity in rich ones, “tackling climate change” isn’t merely a ruinously expensive pipe dream; relative to the fossil-fuelled eradication of poverty and maintenance of prosperity, it’s clearly a third-order issue.

An evolving climate, whatever its cause, isn’t a matter of great concern because, as I’ll demonstrate, the major (to the mainstream) disadvantage and cost of fossil-fuelled civilisation, which in any case is readily manageable, also contains its own offsetting advantage and benefit: 

Fossil fuels feed the machines that create the wealth that enables countries – not just rich ones like Australia, but poor ones like Bangladesh – to master the climate and improve the natural environment. These improvements more than offset the potential costs, from whatever source, of a mildly warming climate. Bluntly, the material and moral benefits of hydrocarbons greatly outweigh their costs.

A Confronting Thought Experiment

If as a “believer in climate change action” you reject this conclusion outright (that is, without even looking at the evidence I’ll present), consider a thought experiment. You fly (no doubt on a fossil-fuelled jet!) to one of the world’s most impoverished countries, for example, the Democratic Republic of Congo, and then drive (almost certainly not in a Tesla!) on an unsealed road to an impoverished shantytown.

After a tour of the area, which reveals poverty of a kind you’ve not witnessed – or even imagined – before, you look a destitute couple in the eye and, through a translator, tell them: “sorry, but you and your children – as well as billions of other impoverished people – cannot aspire to what I’ve taken for granted since the day I was born: clean drinking water, decent accommodation, sufficient nourishing food, modern medical attention, local, national and global transport and communications and much else besides. You cannot have these essentials because they’re fossil-fuelled; I advocate the rapid elimination of fossil fuels, and my influential friends and I mean to get our way.” You then return to the airport, fly home and demand “climate action now!”

If that’s your position, you’re hardly alone: among the most despicable moral failings of the zealots of decarbonisation, ESG (which one astute critic has defined as “economic suicide guaranteed”), “net zero” and the like is an indifference and even callousness that elevates a “first-world” ideology above all else – including the welfare of the world’s poorest people. Bluntly, climate activists are callous, greedy narcissists.

Consumption of Hydrocarbons Enables Us to Adapt to an Evolving Climate

On a daily basis, and egged by venal politicians and the craven mainstream media, we incessantly read and hear that climate change, through fossil-fuelled emissions of CO2, has become a “climate emergency” and an “existential threat.” It’s true that growing consumption of hydrocarbons, particularly in rapidly-developing countries such as China, has boosted emissions of CO2. Indeed, since 2000 the world’s annual emissions have increased by two-thirds (Figure 1).

In 2000, for example, China’s emissions (2.9 Gigatonnes) comprised 13% of the world’s total (21.8 Gt); by 2021, its emissions of 14.5 Gt constituted 38% of the world’s total (37.9 Gt); and during the next 10-20 years, this percentage will likely increase further.

These emissions, say “experts,” are unambiguously bad: they have absolutely no good (never mind offsetting) aspects; therefore something – such as the eradication of fossil fuels and their replacement with “renewables” – must occur as a matter of urgency and apparently without regard to cost.

Figure 1: Greenhouse Gas Emissions, Gigatonnes, China and the World, 1965-2021

Yet so-called experts ignore the fact that, since the Industrial Revolution, abundant, low-cost and reliable hydrocarbon energy, by powering a vast array of machines that have produced food, housing, medical services, transport, etc., has immeasurably improved billions of people’s standard of living and lengthened their lives. (It’s true, as environmentalists have emphasised, that pollution has accompanied the initial (industrial) stage of development. They ignore and deny the crucial fact that, as development proceeds, technology advances and a country becomes richer, service industries predominate its economy – and the better is its environment and the more it can afford to preserve and expand wilderness.)

“Experts” thus ignore or deny the indisputable truth that the use of hydrocarbons imparts fundamental – and radically underappreciated – benefits. These include the ability to transform the environment from one that’s naturally dangerous and unhygienic into one that’s unnaturally safe and sanitary.

Let’s be very charitable and assume that emissions of CO2 resulting from the combustion of hydrocarbons have been solely responsible for – that is, natural factors and their variations have played absolutely no role in – the warming of the global climate system. 

Yet no reasonable – and informed – person could possibly conclude that the impact of this warming has been catastrophic. Quite the contrary: it’s been “masterable” (that’s Epstein’s word) thanks to infrastructure constructed using and machines powered by hydrocarbons. These include but are hardly limited to dams that store water during droughts; dams, dykes and levees that mitigate and prevent floods; irrigation systems that counter droughts, indoor heating and air conditioning that blunts extreme outdoor temperatures, etc.

Leaving aside the issue (for my purposes it’s simply irrelevant) of whether it’s been the sole or even the main cause of an evolving climate, it’s indisputable that over the past 150 years or so – and particularly during the past few decades – the combustion of hydrocarbons has accelerated. So too the world’s population: during the past century it has soared from ca. 1.9 billion in 1920 to ca. 7.9 billion in 2020.

Figure 2: Total Global Deaths by Category of Natural Disaster, Annual Average (Thousands) per Decade, 1920-2019

Yet it’s also incontestable: “climate-related” deaths have plummeted to unprecedented lows. Over the last century, these deaths’ incidence has plunged an astounding 96% (Figure 2, which plots data from the International Disaster Database). Together with the eradication of mass poverty in China and elsewhere – which, like the Industrial Revolution in Britain, etc., would have been impossible without fossil fuels – this is surely the best news of the past century. That’s a godsend rather than an existential threat!

To appreciate the full significance of Figure 2, it’s vital to understand the gist of the latest (sixth) Assessment Report (“AR6”) issued in August of last year by the Intergovernmental Panel on Climate Change (IPCC). The report is a “code red for humanity” in the midst of a “climate catastrophe,” Antonio Guterres alleged at the time and has incessantly repeated since. ”The Earth could be just 10 years from heating by more than 1.5 degrees Celsius – a threshold beyond which even more serious and frequent fires, droughts, floods and cyclones are expected to wreak havoc on humanity,” the ABC breathlessly added (“Climate Change Report from IPCC a 'Code Red for Humanity', United Nations Chief Warns,” 21 August 2021).

Yet an actual examination of AR6 reveals nothing whatsoever that even remotely justifies these hysterical statements. The truth (note the quotation marks) of the IPCC’s assessment is that

  • On drought: “There is low confidence that human influence has affected trends in meteorological droughts in most regions ...”
  • On storms: “There is low confidence in most long-term (multi-decadal to centennial) trends in (cyclone) frequency- or intensity-based metrics ...
  • On floods: “In summary there is low confidence in the human influence on the changes in high river flows on the global scale. Confidence is in general low in attributing changes in the probability or magnitude of flood events to human influence ...”

Steven Koonin’s terrific book, Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters (BenBella, 2021), reviews the IPCC’s actual findings and other research (including his own). He concludes: “even as human influences have increased almost five-fold since 1950 and the globe has warmed modestly, most severe weather phenomena remain within past variability.”

In a second key sense, Figure 2 is enormously – indeed, arguably it’s unreasonably – charitable to the conventional wisdom: unlike the IPCC’s latest (AR6) research, which explicitly doubts it, Figure 2 assumes that deaths from droughts, extreme temperatures, floods, storms and wildfires are “climate-related.” (Natural disasters unrelated to climate include earthquakes, tsunamis and eruptions of volcanoes.)

Globally and on average during the 1920s, “climate-related” events killed an estimated 485,000 people per year. In successive decades, this number tumbled; by 2010-2019, the annual average was 15,000. Similarly, but much less dramatically, deaths from earthquakes, etc., also decreased. During the 1920s, the probability of “climate-related” death was 485,000 ÷ 1.9 billion = 0.00026 per year. By the 2010s, the probability had plummeted to 15,000 ÷ 7.9 billion = 0.0000018. 

The annual probability of “climate-related” death during the 1920s was an astounding 144 times greater than its counterpart in the 2010s! Rising costs of climate change – are so-called experts serious? 

Globally, and thanks to fossil-fuelled development, people today have never been wealthier – and therefore able to build the infrastructure, machines, etc., that render them incomparably safer than previously. 

Unfortunately, as a result of today’s climate hysteria, the fear of “climate-related” death has skyrocketed to the point that it’s causing widespread anxiety disorders, particularly among young people in rich countries.

Remember that I’m deliberately giving the benefit of the doubt to the mainstream – which likely means that the actual probability of “climate related” death is likely even lower than Figure 2 indicates.

Yet even giving this kid-gloves treatment of the conventional wisdom, during the 21st century natural disasters unrelated to climate have killed more people per year, on average, than natural disasters supposedly related to climate change!

Climate crisis? Surely “experts” are joking! Perhaps they simply don’t know what they’re talking about? Or, even worse, they’re trying to mislead?

Australia’s’ Fossil-Fuelled Prosperity Enables It Easily to Afford Natural Disasters

What applies to deaths globally also applies to the damage and destruction of property in Australia. In Will climate change soon make Australia “uninsurable”? (10 January 2022), I analysed the Insurance Council of Australia’s Historical Catastrophe Database. According to the ICA’s website, its Data Hub “collates data from multiple government agencies … on cyclone, flood, bushfire and wind exposure to over 14 million addresses in Australia. [It also collects and manages] the industry claim response to Natural Hazard Catastrophe Events [NHCEs] that have occurred in Australia [since] 1967.”

My analysis of these data demonstrated that over the past half-century the number of natural disasters per year hasn’t risen significantly. Nominally (unadjusted for CPI, etc.), their cost is indeed rising; crucially, however, adjusted for CPI, population, the rising real value of insured assets, stricter builder codes, etc., it isn’t.

In 1967, to take but one example, the Gold Coast’s population (72,000) was just one-tenth of today’s (more than 700,000), and Cyclone Dinah missed it by 100 kilometres. If it recurred today, it would wreak almost $5 billion of damage and rank among the costliest natural disasters in Australian history. But that wouldn’t be a consequence of climate change: it’d be the result of the Coast’s enormous growth (i.e., far greater number of much more opulent houses, etc.), stricter building codes and the galloping price (and thus insured value) of real estate, etc., over the past half-century.

Financially, Australia’s costliest (in terms of adjusted cost of damaged or destroyed property) natural disasters occurred in 1967 (Cyclones Dinah and Elaine caused a combined $6.8 billion of damage, and bushfires in Tasmania another $2.2 billion), 1974 (Cyclone Tracey, $5 billion of damage which devastated Darwin; Brisbane’s flood, $3.2 billion), 1989 (Newcastle earthquake, $4.2 billion), 1999 (Sydney hailstorm, $5.6 billion), 2011 (Brisbane floods, $2.1 billion; Cyclone Yasi, $1.5 billion; and two hailstorms in Melbourne whose damage totalled $1.6 billion) and 2022 (rain bombs and consequent flooding in Southeast Queensland and northern NSW, $5.6 billion; flooding in Victoria, NSW and Tasmania, $0.477 billion).

But surely – as “experts” have alleged relentlessly, and the media has dutifully parroted – Australia’s natural disasters of the past year have been unprecedented? It’s vital to put this assertion into context: what’s been the cost of NHCEs as a percentage of “real” (that is, adjusted for the Consumer Price Index) GDP? Confirming their status as the worst years, the normalised cost of NHCEs in 1967 was 3.0% of that year’s GDP, by far the worst on record, and 1974 was the second-worst year (1.9%). 

The normalised cost of NHCEs since 1967 has averaged 0.23% of real GDP. In 2022 they’ve totalled just 0.3% – hardly a blip on the graph – and since 1967 there’s been absolutely no upward trend (Figure 3).

Figure 3 plots highly-aggregated national statistics. They thereby obscure the fact that, at the regional, local and individual levels over the past few years, natural disasters have repeatedly and severely affected some Australians. Their past and present loss is real; so too is their anxiety about the future.

Figure 3: NHCEs’ Total Insured Damage (Normalised) as a Percentage of Australia’s CPI-Adjusted GDP, 1967-2022

But their losses probably aren’t the consequence of climate change: that’s what the IPCC’s AR6 explicitly says. Instead, they most likely stem from bad state and local government policy (i.e., encouraging development in flood-prone areas), natural variability and sheer bad luck. Accordingly, many Australians’ climate anxiety – which, unfortunately, is real – isn’t the result of climate change; it’s the product of climate hysteria. The apocalyptic exaggerations of so-called “experts,” venal politicians and gullible journalists mock science and cruelly mislead emotionally-vulnerable people.

“You can see the computer age everywhere but in the productivity statistics,” Robert Solow famously quipped in 1987 (the year he won the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, usually but erroneously called “the Nobel Prize in Economics”). Analogously, these days climate change is allegedly affecting everything except the figures in the Insurance Council of Australia’s Historical Catastrophe Database. The assertion is certainly becoming more common and strident, but the reality is clearly otherwise: over the past half-century, the frequency of natural disasters in Australia hasn’t increased; nor – when properly measured and placed into proper context – has their cost or severity. 

Consequently, climate change – whether man-made or otherwise – can’t be causing what’s not happening. Indeed, the number of deaths globally and the cost of property lost and damaged in Australia has risen. Quite the contrary: over the years it’s fallen and is now remarkably – and gratifyingly – low. That’s the result of fossil-fuelled prosperity. In this crucial sense, the benefits of hydrocarbons greatly outweigh its modest and manageable costs. Empirically and ethically, fossil fuels thereby pass a cost-benefit analysis with flying colours.

Can I or anybody else categorically reject any possibility that the frequency and severity of natural disasters will never mount? Clearly, I can’t. Equally, proponents of the conventional wisdom must also be humble – and honest. 

They simply cannot credibly claim – as they nonetheless routinely and emphatically do – that natural disasters’ frequency and severity are increasing, that fossil-fuelled climate change is the culprit, and therefore that hydrocarbons must immediately go the way of the horse and buggy. Hard data simply don’t support these glib assertions; quite the contrary, they comprehensively undermine them.

Climate Scientists’ Egregious Moral Shortcomings 

A dispassionate assessment of “X,” whatever it may be, must accept at its outset, at least in principle, that “X” can possess advantages and benefits as well costs and disadvantages. The purpose of a rational assessment is to identify the major “pros” and “cons,” and to evaluate them. When considering an antibiotic or vaccine, for example, a sensible evaluation must weigh positive benefits versus negative side-effects. Fair-minded people would surely agree: it makes no logic sense – indeed, it’s unethical – to oppose an antibiotic or vaccine on the grounds of its negative side-effects without also considering its benefits, and weighing benefits against side-effects.

This principle was obvious to our forebears. In The Coal Question (1865), the classical British economist, William Stanley Jevons, described the unprecedented human empowerment that coal had enabled:

Coal in truth stands not beside but entirely above all other commodities. It is the material energy of the country – the universal aid – the factor in everything we do ... With coal almost any feat is possible or easy; without it we are thrown back into the laborious poverty of early times.

Unlike today’s “experts,” Jevons didn’t glorify the “natural” pre-coal era: he knew, as did his contemporaries, that unimproved nature meant meagre food and shelter, miserable standards of living and short longevity. Today we regard the coal-powered Industrial Revolution as a time of environmental degradation, but that’s not how people at that time saw it. They well knew the deficiencies and dangers of “the environment.” Hence Jevons concluded:

Coal is everything to us. Without coal, our factories will become idle, our foundries and workshops ... still as the grave; the locomotive will rust in its shed, and the rail buried in the weeds. Our streets will be dark, our houses uninhabitable.

Today, however, climate scientists’ – never mind climate activists’ – “assessment” of fossil fuels is anything but balanced. As far as they’re concerned, they cause climate change – which isn’t merely all bad: it’s catastrophically bad. Yet the most inattentive schoolboy (as I once was) knows that a rising level of CO2 encourages plant growth – which improves the productivity of agriculture and “greens” the planet. Surely that’s a good thing? And a warming world – in which many more people have hitherto died as a result of cold than heat – means, on balance, fewer deaths as a result of extreme temperatures. Obviously, that too is a net positive. To have any credibility, an assessment must assess plusses against minuses.  

Yet climate scientists’ – never mind climate activists’ – “assessment” of hydrocarbons is anything but unbiased. In my previous wire, I documented the fact that they and their puppets in the mainstream media and politics (and, increasingly, boardrooms) mostly ignore and sometimes callously deny hydrocarbons’ many and tremendous advantages and benefits – particularly to the poor. In this wire, I’ve mentioned (it hardly needs substantiation) that they grossly exaggerate fossil fuels’ alleged costs and disadvantages particularly “climate-related” deaths and property damage.

Why do prominent climate scientists ignore hydrocarbons’ benefits and greatly exaggerate their costs, and thereby so absurdly distort reality?

As Alex Epstein and Michael Shellenberger (in his excellent book Apocalypse Never: Why Environmental Alarmism Hurts Us All, HarperCollins, 2020) demonstrate, it’s because climate scientists (most of them unwittingly; the most prominent ones consciously) value the quality of “the environment” more highly than the welfare of people. Indeed, in order to “save the environment” they will apparently gladly sacrifice the welfare not just of individuals or groups but of humankind as a whole.

Eliminating humans’ impact from the environment, regardless of the consequences for human welfare, is the primary moral goal of the most prominent and influential (as decided by the governments and the mainstream media) climate scientists and campaigners. It’s important to emphasise that this is the view of a small minority. But that’s enough, because they’re very influential. The vast majority of climate scientists and campaigners (as well as politicians, journalists and “woke” CEOs) rarely inspect the movement’s ethical underpinnings (or lack thereof) and content themselves to the incantation of seemingly innocuous phrases. They go along in order to get along – and get ahead.

David M. Graber, in his review of Bill McKibbin’s prominent book, The End of Nature (Random House, 1989), which The Los Angeles Times published on 22 October 1989, exemplified the extreme, minority but influential position – and its chilling anti-human implications: “McKibbin is a biocentrist, and so am I. We are not interested in the utility of a particular species or free-flowing river, or ecosystem, to mankind. They have intrinsic value, more value – to me – than another human body, or a billion of them. Human happiness, and certainly human fecundity, are not as important as a wild and healthy planet … Until such time as homo sapiens should decide to rejoin nature, some of us can only hope for the right virus to come along.”

And the rest of us can only hope that biocentrists’ hopes ever remain thwarted! Climate scientists and environmental activists rarely state their odious moral preferences as baldly as Graber did. The trouble, as Epstein and Shellenberger document, is that most environmentalists and climate scientists – as well as politicians, the mainstream media and much of the general public – share these preferences, at least in a mild form and to some degree. But through the ubiquitous use of fine-sounding weasel-phrases (“going green,” “minimising environmental impact,” “protecting the environment,” “saving the planet,” etc.) they obscure their anti-human basis (not least from themselves).

These phrases’ plain meaning is: “we demand that others do less of anything that’s infrastructure- or machine-related, from drinking potable water to driving and flying, using a washing machine and dryer, or receiving medical treatments, and thus that they consume less energy and become poorer.” (Climate scientists, of course, still demand their academic tenure and pay rises!) Through these and other seemingly-innocuous expressions, climate scientists and environmentalists oppose the use of

  • fossil fuels because their emissions of CO2 significantly impact nature;
  • nuclear power because their radiation and nuclear waste can significantly impact nature;
  • hydro-electric power because by damming and diverting free-flowing rivers it significantly impacts nature;
  • solar and wind power because they significantly impact nature.

In particular, and as highly dilute sources of power, solar and wind farms require colossal quantities of land (in my previous wire, I quoted Shellenberger: “if the U.S. were to try to generate all of the energy it uses with renewables, 25-50% of all the land in the U.S. would be required”) and their expansion thus threatens massive areas of habitat and quantities of wildlife. 

On 6 November, in “Massive Land Use Needed for Global Energy Alternative,” The Australian published a map showing the amount of land which will be required in order to become a “green hydrogen superpower.” It’s equivalent to more than half of Western Australia!

Moreover, discarded solar panels contain toxic materials, are hard to recycle (and therefore are seldom recycled) and at the end of their useful life almost always become landfill – and thus pollute the soil and contaminate the water table. “Clean” energy, in other words, is actually quite dirty.

The last of the five dot points above is deliberately confused – and thereby accurately reflects climate scientists’ bizarrely contradictory moral position. It’s certainly true that solar and wind power significantly impacts nature, and that the rapid expansion of these projects will massively increase their impact. 

But no matter: climate scientists and activists nonetheless demand them – and are contemptuous not just to their cost, but also to their current and future impacts upon the environment and wildlife. Most climate scientists are academics, and academics are mostly socialists. Yet history has demonstrated repeatedly and without exception that socialism is bad for the environment – and that the private property and markets that create wealth are good for the environment (as one of many examples, see Figure 5 in my previous wire).

The Real Deniers of Science

Climate scientists and their mascots in the media and politics continually scold doubters and sceptics: “you must respect the science!” In truth, perhaps the most bizarre aspect of virtually all climate activists’ (and many climate scientists’) ethics is their increasingly ambivalent – indeed, antagonistic – attitude towards science:

For a few American troops in Vietnam in the late-1960s, “It became necessary to destroy the town to save it;” for practically all of today’s climate activists and significant numbers of climate “scientists,” it’s apparently necessary to weaken – or even forsake – science in order to strengthen their “effectiveness” and thereby “save the environment.”

In an interview with Discover magazine in 1989, Stephen Schneider, a climate scientist at Stanford University, unintentionally described the deep ethical bog into which he – and, I suspect, many climate scientists – have sunk. “On the one hand,” he began, “as scientists we are ethically bound to the scientific method, in effect promising to tell the truth, the whole truth and nothing but – which means that we must include all the doubts, the caveats, the ifs, ands and buts.”

The phrase “on the one hand” is ominous, but so far, so good and kudos to Schneider. But then he adds: “On the other hand, we are not just scientists but human beings, ... And like most people we’d like to see the world a better place … To do that we need to get some broad-based support, to capture the public’s imagination. That, of course, means getting loads of media coverage. So we have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts we may have. This ‘double ethical bind’ we frequently find ourselves in cannot be solved by any formula. Each of us has to decide what the right balance is between being effective and being honest. I hope that means being both.”

That’s rubbish. Dan Gardner’s response (The Science of Fear, Plume, 2009) is trenchant:

“Uncertainty is so central to the nature of science that it provides a handy way of distinguishing between a scientist talking as a scientist and a scientist using the prestige of his white lab coat to support political activism. Look at the language. If a scientist delivers the simple, unconditional, absolutely certain statements that politicians and journalists want, he is talking as an activist, not a scientist.”

The trouble with scientists moonlighting as activists is that politics and science are chalk and cheese – and the second job can become the main gig. Scientists worthy of the name must constantly do so, but rarely in politics does anybody ever consider whether he might be wrong. It’s the educated person, the respecter of scientific method and informed debate, who bears a special responsibility to consider dissenting views. And if that obligation extends to discordant evidence, which surely it does, then the scientist’s obligation is the heaviest of all (and politicians are mostly pompous idiots). 

Yet given his conviction that his cause is not just right but righteous, considering – never mind respecting – other evidence and views is precisely what the scientist-activist can’t do without betraying his cause.

Koonin agrees: “with scientists’ unique role comes a special responsibility. We’re the only people who can bring objective science to the discussion, and that is our overriding ethical obligation. Like judges, we’re obligated to put personal feelings aside as we do our job. When we fail to do this, we usurp the public’s right to make informed choices and undermine their confidence in the entire scientific enterprise … Activism masquerading as The Science is pernicious.”

There’s No Climate Crisis – but There Is a Crisis of Climate Science

It’s hardly unique to climate science: scientists’ moral shortcomings have contaminated science. In “Faith in Science Is Undermined by Peer-Review Failings” (The Weekend Australian, 20-21 October 2018), Judith Sloan wrote: “The trouble for the IPCC – and for many other outlets that carry scientific findings – is that a crisis in science has been brewing for some time … The fundamental problem is that the results of many peer-reviewed papers and reports have not been confirmed when the experiments have been repeated or the data reanalysed.”

John Ioannidis, an eminent medical scientist at Stanford University, belled the cat in a much-cited and must-read paper published in 2005 entitled “Why Most Published Research Findings are False.” He concluded: “there is increasing concern that most current published research findings are false … For many current scientific fields, claimed research findings may often be simply accurate measures of the prevailing bias.”

Why can’t so many studies be replicated? Why, in other words, does ever more “science” fail to meet the canons of science? At one end of the spectrum is fraud and misconduct; at the other is manipulation and cherry-picking of data. According to Sloan, “researchers have strong (career) incentives to establish significant results while discarding inconvenient data … Authors often make it deliberately difficult for other researchers to re-do experiments or check findings. Additionally, many referees … do a lousy job by simply reading papers and approving them if they (like) their findings.” 

Like “Sovietologists” of yesteryear, most of today’s “climate scientists” are in effect government employees. The problem isn’t merely that they possess a strong incentive to please their master; over time he’s become ever less trustworthy. Accordingly, his minions, too, are less truthful: they exaggerate some conclusions (the “Soviet threat” then; the “climate crisis” now) and suppress others (Communism was doomed to collapse; mankind can readily adapt to changes of climate). The utterly unforeseen – to alleged experts! – collapse of the USSR was a boon to humanity but a catastrophe for Sovietologists. From the point of view of their jobs and status, their incentive was – and today it butters the bread of climate scientists – to overstate and even scaremonger.

This is because, as Bjørn Lomborg (“The Sky Is Not Falling,” Project Syndicate, 23 April 2018) notes, “humans are partial to bad news. Media outlets reflect and shape this preference, feeding us woe and panic. Long, slow, positive trends don’t make it to the front page or to water-cooler conversations. So we develop peculiar misperceptions, especially the idea that a preponderance of things (is) going wrong.”

Throughout this wire, I’ve bent over backwards to give the benefit of the doubt to the mainstream. Judith Sloan’s assessment (“If Disaster Is Nigh, at Least We’ll Be Spared This Amateur-Hour Claptrap,” The Australian, 9 October 2018) is much harsher: 

“the IPCC report released yesterday ain’t science. It doesn’t set out refutable hypotheses and test them. In fact, we don’t even have reliable data on global temperatures. Using climate models to support predictions of future disasters is actually not that far from making astrological prophecies … Luckily, … (the) Prime Minister recognises the essentially fraudulent nature of these international reports …”

Instead, “for anyone who wants to spend time on yet another IPCC report predicting future climate cataclysms, I recommend you read Nassim Nicholas Taleb’s latest book (Skin in the Game: Hidden Asymmetries in Daily Life, Random House, 2018). He makes the distinction between science and scientism. The IPCC report is a clear example of the latter, with all its fancy concocted charts and tables pretending to be based on real science undertaken by distinguished scientists when it is nothing of the sort …”

Sloan concludes acidly: the IPCC’s “scientism is to science what a Ponzi scheme is to investment.”

Philosopher-Kings or Activist-Dictators?

Climate scientists, like epidemiologists, are academic specialists. Their focus isn’t just narrow: it’s theoretical rather than practical. The overriding – indeed, overwhelming – problem, thanks to politicians’ craven abdication of their responsibility intelligently to weigh policy alternatives, is that climate scientists and climate bureaucrats now possess the power to dictate policy – which is something that, qua specialists who can’t, don’t and won’t see the bigger picture, they’re ill-equipped to do.

The consequence of these two difficulties: just as epidemiologists aren’t mental health specialists, oncologists, paediatricians, etc. (and thus mostly ignored the impact of lockdowns upon cancer screening, mental health, young people, etc.), climate scientists are not economic historians and energy specialists – and are thus oblivious to hydrocarbons’ unique attributes and essential role in economic development.

In particular, climate scientists overlook what should be obvious: any dispassionate assessment of hydrocarbons as its starting point must acknowledge that they possess advantages and benefits as well as costs and disadvantages. Moreover, a dispassionate consideration and humane weighting of their pros and cons will almost invariably conclude that their advantages and benefits greatly outweigh their costs and disadvantages – including their impacts upon the world’s climate system.

Like the division of labour of which it’s an example, intellectual specialisation has produced enormous benefits. But it doesn’t lack costs, and in The Revolt of the Masses (1930), the Spanish philosopher, José Ortega y Gasset, described and analysed a major one. “Previously, men could be divided simply into the learned and the ignorant, those more or less the one, and those more or less the other.” Over the past century or so, however, a new kind of person has emerged, “an extraordinarily strange kind of man,” who cannot be called “learned, for he is formally ignorant of all that does not enter into his specialty,” yet at the same time cannot be considered “ignorant, because he is ‘a scientist’ who ‘knows’ … his own tiny portion of the universe.” Ortega y Gasset concludes that the only fitting name for such a person is a “learned ignoramus.”

Learned ignoramuses populate all parts of society today (I don’t deny that I’m one; perhaps you’re one, too). If they possess valuable skills and talents and stick to their specialist knitting, they can do considerable good. If they venture outside their proper boundaries, they’re mostly harmless. However, when (1) they become self-righteous and (2) head or influence powerful agencies of government that issue society-wide decrees, they create big problems, worsen pre-existing ones – and thereby produce broad, deep and enduring damage and suffering. As C.S. Lewis put it in God in the Dock: Essays on Theology and Ethics (Eerdmans, 1970),

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than ... moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience …


In this and my previous wire, I’ve established six conclusions:

  1. In both rich and poor nations, cost-effective energy is vital and indispensable;
  2. Hydrocarbons are a uniquely cost-effective source of energy – and unreliable and intermittent (“renewable”) energy isn’t;
  3. Today, billions of people are suffering for lack of cost-effective energy;
  4. Hydrocarbons feed the machines that create the wealth that allows people to master the climate – and thus offset the costs (such as lives lost and property damages or destroyed, and assuming that it’s man-made) of climate change.
  5. Science is a process that, through trial and error, accumulates knowledge over time. It’s not a body of infallible knowledge at any given point in time. Most people rightly respect science and its achievements.
  6. Many “scientists” misunderstand science – and forsake it through activism. As a result, increasing numbers of people rightly distrust activist “scientists.”

Hydrocarbons aren’t mankind’s worst enemies. Quite the contrary: they’re among its longest and best friends. Yet very few people in Australia – and, alarmingly, practically no “experts” – consider their pros and cons, costs and benefits rationally or morally. In rich countries, well-to-do people can indulge themselves by claiming to adopt “green lifestyles” and signalling their alleged virtue; but in much of the world, affordable and reliable energy is a dream – and its acquisition a matter of life and death.

So-called experts make the currently fashionable but ultimately untenable case that “we” can, should and must immediately transition from “dirty” fossil fuels to “clean, green renewable energy.” Their case is fatally flawed not merely because it’s technically infeasible and ruinously expensive, but ultimately because it’s egregiously immoral: it consigns billions of people in poor countries to continued grinding poverty; moreover, if implemented in rich countries it will impoverish scores of millions.

Instead, the world can and must resume its centuries-old transition from energy poverty to plenty. That means abandoning the “renewal energy transition” from plenty to poverty (which in any case, and after trillions of dollars wasted, is barely perceptible). Fossil fuels have a bright future because they’re an indispensable element of humanity’s bright future. Climate activists can’t abide either aspect of this fantastically good news.

Implications for Investors

It should hardly surprise any investor: public self-righteousness often cloaks base private motives. All and sundry claim that they want to “change the world;” in fact, they seek to line their pockets at others’ expense. “Climate crisis,” “decarbonisation,” the “energy transition,” ESG and the like are merely the latest warm phrases that conceal cold covetousness. Under their cover, academics chase grants, tenure and other sinecures, bureaucrats connive to expand their empires, lawyers and regulators threaten litigation, politicians hunt votes – and asset managers hawk the latest “sure thing.”

These people doggedly pursue libido dominandi (that’s Latin for “lust for power”); consequently, they deny or ignore logic and evidence that exposes their selfishness. So bless doubters and sceptics, for they dare to declare that the emperor is naked. As Lomborg concluded a decade ago (“Wrongheaded in Rio,” Project Syndicate, 13 June 2012): an evolving climate, no matter the extent to which it’s natural or man-made, “is by no means our main environmental threat.” Morally, it’s a third-order issue.

“To be sure,” added Judith Sloan (“Jumped-up Geoff (Summerhayes) Is Proof We Need Fewer Regulations,” The Australian, 28 February 2017),

“There is a risk for companies associated with climate change but it has almost nothing to do with the climate changing (the incidence of extreme weather events is declining). It has almost everything to do with the menace for companies of dealing with absurd and unpredictable changes enacted by shallow, ill-informed politicians and regulators.”

Taking into dispassionate consideration advantages and benefits as well as costs and disadvantages, any conventional investment portfolio shouldn’t merely welcome fossil fuels and their producers; they should underpin any portfolio that claims to be ethical. These portfolios should also exclude shares of producers of intermittent and hence unreliable (“renewable”) energy.

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This blog contains general information and does not take into account your personal objectives, financial situation, needs, etc. Past performance is not an indication of future performance. In other words, Chris Leithner (Managing Director of Leithner & Company Ltd, AFSL 259094, who presents his analyses sincerely and on an “as is” basis) probably doesn’t know you from Adam. Moreover, and whether you know it and like it or not, you’re an adult. So if you rely upon Chris’ analyses, then that’s your choice. And if you then lose or fail to make money, then that’s your choice’s consequence. So don’t complain (least of all to him). If you want somebody to blame, look in the mirror.

Chris Leithner
Managing Director
Leithner & Company Ltd

After concluding an academic career, Chris founded Leithner & Co. in 1999. He is also the author of The Bourgeois Manifesto: The Robinson Crusoe Ethic versus the Distemper of Our Times (2017); The Evil Princes of Martin Place: The Reserve Bank of...

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