Home Climate Change Good Lord, The Stupidity - Investment Is A Cost, Dimwit

Good Lord, The Stupidity – Investment Is A Cost, Dimwit

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The entire world seems to be making the usual Guardian opinion pages mistake of thinking that investment is a good thing. It isn’t, of course it isn’t – it’s a cost.

Yes, clearly, it’s possible that good things come from investment. We do generally note that at least some investments make the future richer. There are benefits to useful investment that is. But it’s still true that the investment itself is a cost:

The report proudly boasts the UK was the first major economy in the world to legislate a net zero emissions target by 2050. That’s true, but Britain hasn’t yet matched that lofty legal ambition with real financial clout – and rivals are catching up fast.

Across the North Sea, where windmills are gradually replacing oil rigs, Norway, Sweden and Denmark are racing ahead with plans to turn decarbonisation into the biggest emerging industrial opportunity of the coming decade.

They don’t just see it as a cost – but a chance to build their future prosperity on new, greener foundations.

Norway, for example, is investing more than double the sum unveiled yesterday by Kwasi Kwarteng on a single £2bn mega project to commercialise Carbon Capture and Storage (CCS) in the North Sea.

D’ye see the mistake there? The assumption is being made that more investment is better. Which isn’t how it works at all.

Sure, it could be true that a big project will produce better returns than a small one. But that’s the part we’ve got to prove – the larger investment in and of itself is a higher cost. Think on it, say we could cure climate change for $1. Or we could cure it for $1 trillion. So, which is better, investing $1 to solve it or $1 trillion? If we run about shouting that investment is, in and of itself, a good thing then we end up, absurdly, insisting that the higher price tag is better.

Which would mean that we’d solve climate change at that high price and not come up with that damn flying car I’m still awaiting.

Meanwhile, as Britain ponders whether to build a gigafactory for electric vehicle battery materials to keep its struggling car industry afloat, Sweden has already built one at Skelleftea in Lapland with oodles of government support doled out by both Stockholm and Berlin.

The aim of investing sensibly is to gain the output without having to put the oodles in. Miss that and madness lies in our decision making.

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7 COMMENTS

  1. It’s the same with the screams of “we’ve got to spend more on healthcare!!!” No, we’ve got to make healthcare cost ***LESS***. Healthcare getting more and more expensive is a *bad* thing.

  2. It’s the classical problem as described in “Yes, Minister” – the purpose is mistaken for the budget.

    In the past, the Canaanites would light the fires inside an idol of their god Moloch, and then throw in newborn babies as sacrifices to gain the god’s favour. If the god wasn’t content (the harvest still failed, the river flooded, the Israelites kept invading…) then the solution was to stoke the flames hotter and throw in *more* babies, since the god was obviously still hungry.

    Today, we engage in a similar form of idolatry, except we sacrifice money instead of infants, and the idol being worshipped is called Skoolzanospitals.

    If I were to perfect and sell Dr Lynch’s Patented Cure-All Tonic Lotion, available for £1 a bottle, one drop of which would cure illness, restore youth, cause men’s gleaming scalps to sprout anew and their manly vigour to be fully renewed, while the fairer sex would have cellulite smoothed, adipose tissue dissolved, bosoms reshaped as desired… the first cry as it went on sale would be “Evil Government slashes NHS spending!”

  3. This is the reason I’d put all the money into nukes. At least we know they work.

    Of course if I really ran policy, fracking and the underground gasification of coal would be my approach. After all there’s plenty of coal under the North Sea.

  4. Not to worry since American Democrats having re-labeled their confiscatory taxes as ‘contributions’ this investment v cost issue disappears.

  5. ‘Forget’ about ‘investment’?
    ‘We’ have ten years?
    “ . . . our best estimate is that the net energy
    33:33 per barrel available for the global
    33:36 economy was about eight percent
    33:38 and that in over the next few years it
    33:42 will go down to zero percent
    33:44 uh best estimate at the moment is that
    33:46 actually the
    33:47 per average barrel of sweet crude
    33:51 uh we had the zero percent around 2022
    33:56 but there are ways and means of
    33:58 extending that so to be on the safe side
    34:00 here on our diagram
    34:02 we say that zero percent is definitely
    34:05 around 2030 . . .
    we
    34:43 need net energy from oil and [if] it goes
    34:46 down to zero
    34:48 uh well we have collapsed not just
    34:50 collapse of the oil industry
    34:52 we have collapsed globally of the global
    34:54 industrial civilization this is what we
    34:56 are looking at at the moment . . . “
    https://www.youtube.com/watch?v=BxinAu8ORxM&feature=emb_logo

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