WTF — Is Freakonomics Owned By Huge Oil Now Or One thing?

Environmental, Social, and Governance (ESG) investing was the topic of the most recent Freakonomics episode. I actually take pleasure in economics, and was pleased to see an economics podcast I respect do a present on the topic. My curiosity rapidly turned to disappointment, nonetheless, because the present’s host gave the impression to be fully new to the topic, and interviewed only one economist, lobbing softball query after softball query and doing what seemed to be little or no important pondering. He challenged few, if any, assumptions on the matter.

If I need that form of factor, there are a LOT of stories shops on the market that simply plain suck at journalism that I may take heed to.

For those who’ve learn Darkish Cash, you recognize that a long time in the past, a few fossil billionaires laid their tentacles all through the “thought management” world with a purpose to affect public opinion. That is generally known as the Kochtopus — named after brothers David and Charles Koch. Amongst different issues, endowments to Ivy League and related high-tier faculties got, with strings hooked up. The repercussions of this affect marketing campaign will doubtless by no means be totally identified, however the backside line is that they discovered a solution to insert their libertarian beliefs into the establishments we belief (together with, it appears, via handpicked researchers and professors).

So, flash ahead a decade or two, and right here we’re, with an economist from Yale publishing a report that questions the efficacy of ESG investing. That’s completely high-quality — it’s good to query issues. Nonetheless….

The variety of head-smacking moments within the podcast overwhelmed me and I needed to flip the exhibit. Simply to quote one — the economist argues that polluting firms (the 20% most polluting, which she calls “brown” firms) can have a dearer time getting financing because of ESG investing. It’ll merely be dearer for them to borrow and use cash. That a lot everybody can agree on, and most of us would say “sure, that’s kinda/sorta/precisely the purpose!” It’s a carrot we will dangle in entrance of them to wash up their act. However, as an alternative, the economist argues that that may one way or the other stop them from getting extra inexperienced and/or investing in new tech that’s good for the planet.

Huh?

Simply as one instance, Exxon made $55 billion (with a B) in revenue final yr — it could possibly and has all the time been capable of make investments as a lot because it needs in local weather tech. It has as an alternative doubled down on oil manufacturing and spent numerous tens of millions, possibly even billions, to deliberately confuse the general public about local weather change and hold us depending on the corporate’s deadly product.

So … we should always spend money on Exxon in order that it will get cheaper financing and turns into … extra worthwhile??? Possibly if Exxon turned a $70 billion revenue, it might see the sunshine and amend its wayward methods? Eh … I’m guessing not a lot.

I’ve reached out to a number of specialists within the house, together with the present’s host, to collect extra info. I’ll report again. Any feedback, sources, and so forth., you will have, please publish them within the feedback!