At CDN we are not big believers in conspiracy theories. Mostly when people say and do stuff you disagree with it’s because they think stuff you disagree with. But we concede that when cornered by their own folly, and lured by advantage, humans will fib. Thus the Economist declares in apparent surprise that “Dubious green funds are rampant in America/ New research suggests Wall Street is banking on bogus claims”. If so, it wouldn’t be the first bubble driven by trendy enthusiasm, careless avarice and shady operators at the margins. But this one’s worse, because governments are bringing their fabled fiscal prudence to the table.
For starters, the Economist notes, there’s been a significant downgrading of green funds in Europe. Then it says:
“That has exposed European fund managers to accusations of greenwashing, and for some the label is deserved. But new research published this week in the Review of Finance, an academic journal, suggests American firms are doing worse. When it comes to sustainable investing, Wall Street stalwarts appear to run a fully fledged laundromat of exaggerated sales pitches and bogus claims.”
Which is a bit of a non sequitur, since the fact that American funds have similar or worse problems has no bearing on whether they were “greenwashing” or what exactly that term means. Remember that financial firms, like most elite institutions in the modern developed world, are filled with perky young adults whose often unexamined mental and sociological furnishings include a strong commitment to fighting climate change.
Like their professors and politicians, they really thought there were hugely attractive investment opportunities because renewables were more efficient than fossil fuels. They didn’t just put the Energiewende, the Green New Deal and all those shiny high-tech jobs of the future in their prospectuses. They really believed in them. And now the receding tide of illusion is exposing them financially and intellectually including the ways in which they overreached mentally and fiscally.
At this sensitive moment there’s a very real danger that governments will bring their fabled fiscal prudence to a huge parastatal sector investing in the energy of the future. Which ought to give a sane person pause given long experience with the shaky finances and performance of government-backed megaprojects especially when there’s one of those manky public-private partnerships that delivers commercial secrecy and government prudence. In Canada’s capital we’ve just had a bitter taste of the tendency of state-sponsored megaprojects to take too long, cost too much and deliver too little with our Light Rail Transit white elephant, with similar problems emerging in our largest city. Wherever you live there’s almost certainly something similar. And you ain’t seen nothing yet, apparently.