Sternberg on Risks to Financial Institutions from Climate Change – Are you interested in that?

Kip Hansen’s opinion – September 30, 2022

Joseph C. Sternberg is a member of The Wall Street Journalof the editorial board and the Political Economy column. He started a recent column in the WSJ with this statement:

He is not fooled by almost unexplained nonsense World Bank President David Malpass. The Climate Policies being enacted in the UK and across Europe are the “”Climate risks” to financial stability. That risk “has arrived, albeit the complete opposite of what our current eco-financiers have predicted.”

“The UK may be facing a wave of business bankruptcies that exceed anything seen in the post-2008 crisis and recession period. Around 100,000 companies could be incapacitated. solvency in the coming months, bankruptcy advice Red Flag Warning warned this week. These are healthy companies with at least £1 million in annual revenue. Business failures on this scale would have decimated approximately 65,000 companies of any size between 2008-10.

The culprit is energy prices, which the consulting firm believes can directly account for about a quarter of possible defaults. These prices are going up for UK businesses by a few hundred percent at a time and sometimes with high deposit requirements from utilities causing exactly a wave of bankruptcies. “

Sternberg said that “the problem is probably worse in Germany, the eurozone’s largest economy,” where up to 73% of small and medium-sized businesses report that they are feeling “heavy pressure from prices. energy”. Some estimate that up to 10% may be facing “existential threats” – not from Climate Change, but from Climate Change Policy.

Sternberg ends his piece with this:

“Politicians happily blame Vladimir Putin and his invasion of Ukraine for the current energy disaster. But what turned a one-time change in the relative price of energy into a global catastrophe was green energy policy two decades earlier. In Europe, that includes a fixation on renewables’ inability to power industrial economies in the absence of non-existent battery technologies, a refusal to tap into reserves. domestic fossil fuels such as shale gas, and deep and irrational hostility to nuclear power in many areas of the continent. This has created a dangerously stiff and inefficient energy system, incapable of adapting to a blow like Russia’s partial withdrawal from the European gas market. It is almost inevitable that the impending outcome is a recession in Europe. We can only hope that it also won’t cause a global financial crisis.”

Of course, as we saw in California, the United States could go down the same path to energy and financial disaster.

You can Read Joseph Sternberg’s entire column here.

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Author’s comment:

Regardless of your personal opinions and views on climate change/global warming, there can be little doubt that policies are being implemented and urged by governments at many levels. have been destructive – higher electricity prices, higher gas prices, higher transport prices have fueled increases in food and other commodity prices, hurting the economy.

At the worst end of the spectrum, entire states and regions are facing blackouts and brown fires. Other regions have asked customers to cut back on electricity usage during certain times of high demand.

The wisdom of the ages holds true: As you sow, you will reap.

Thanks for reading.

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