COP29 (The 2024 United Nations Climate Change Conference) is well underway and climate activists from around the world are plotting how to get your money and use it to advance their expensive environmental agenda. This week participants were talking about how to exert more control over private investment through Environmental, Social, and Governance (ESG) ratings as well as green, blue, and other environmental bond ratings. They also have recommendations for trillions of dollars of government “investment” in wind, solar, and other projects to move the world towards net zero. And, of course, there were calls for greater “climate reparations” from wealthy industrialized to less industrialized countries.

The ESG movement has been redirecting billions of investment dollars to preferred climate projects for decades. ESG-focused portfolios and indices popped up like mushrooms when short-term interest rates in the US were under two percent. Then they got an additional boost during the COVID crisis and the Great Reset until popular and legal backlash in the US, along with poor investment returns and high fees, reversed the flow of funds. But even with that setback, ESG ratings are still alive in the investment community. Significant financial and consulting institutions from Blackrock to McKinsey to Glass-Lewis continue to push ever more “green” private and public investment.

Internationally, several alliances exist to build coalitions and commitments among banks and insurance companies to pursue net zero. Part of this pursuit means funneling money to green projects. But another big part involves diverting capital away from “bad” industries like coal, gas, and oil. This attempted divestiture has been vigorously contested by Texas and Florida, among other states. A third prong of the net zero campaign involves funneling billions of dollars into “carbon offsets.” 

Because eliminating all emissions is next to impossible, companies are being encouraged (or required) to buy offsets from other companies or countries that purport to pull a certain amount of carbon out of the air. There are many reasons to be skeptical of this whole project. The efficacy of carbon offsets is highly questionable because they create all kinds of bad incentives. 

Meanwhile, demand for energy continues to climb. Solar and wind power, even with more than a decade of heavy subsidies, have barely made a dent in global energy production. Fossil fuels will remain essential to modern economies’ success and to our prosperity. Diverting financial capital away from fossil fuel companies for ideological reasons makes no sense.

Then there is the matter of massive wealth redistribution in the “green” transition. Unreasonable demands for climate reparations between countries are just the tip of the iceberg. Ever more stringent emissions standards and restrictions in western economies have created a steady exodus of industry and manufacturing to lower cost, higher pollution countries like China and India. In their pursuit of net zero goals, western countries sacrifice their own economic growth and prosperity and give it to their economic competitors.

Within countries, the redistribution of wealth is often stark. California taxpayers subsidizing wealthy Silicon Valley programmers purchasing Teslas is one example. Handouts of hundreds of billions of dollars nationally for electric vehicle purchasers, for solar projects, for wind projects, and for wealthy people to put solar panels on their roofs further exacerbate inequality and forced wealth transfers from ordinary Americans to elites.

The irony of COP29 (besides being held in a major oil-producing authoritarian country) is that the participants who use modern technology and benefit from the economic prosperity of the west want to use those very institutions (finance and investment) to hamstring economic growth and prosperity going forward. This co-opting of the financial system should be resisted.

Alternative investment managers like Strive, divestiture from environmental activist funds like Blackrock, and investigations into collusive and anti-competitive behavior by large financial institutions have done a lot to slow the “green” transition in the US. Greater SEC oversight of investment firms and proxy advisory firms will expose more graft in green finance. Raising fiduciary standards will also discourage environmental activism with other people’s money as managers face greater potential legal liability.

At the end of the day, we should all do our part of letting people know about the corruption within the environmental movement. We should also let people know that the “green” transition will be less about moving from a high-carbon world to a low-carbon world and more about moving dollars from ordinary people’s bank accounts to green elites’ bank accounts. Politically connected green energy investors and opportunistic carbon offset entrepreneurs make money, not from improving our lives, but from checking the right environmental boxes.

We should not let climate activists and climate opportunists redirect other people’s wealth to themselves involuntarily. It is long past time to end the self-aggrandizement at UN climate conferences masquerading as the only thing standing between us and the end of the world. The sooner we expand fossil fuel production in the west, the better.

Cheap energy means a future of greater freedom and prosperity for everyone.