The age of Climate Write-offs


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Technology has refocussed on batteries in an amazing shift initiated by Elon Musk. Billions will flow into energy storage systems of many types, including hot sand storage for instance. When other technologies like thin film solar are finally allowed to enter the market (now kept off it by carbon cash flow interests) we will see that renewables are the cheapest and best option nearly everywhere on Earth.

The defence of the fossil industry against this rapid shift is the sunk cost of their technology. In Spain the builders and finaciers of the gas pipeline from the north (Russian gas) wanted to shut down the solar power plants in order to allow them to recoup the investment by selling gas. This is economic thinking, old school, not roboeconomic thinking. Of course if you burn fossil fuels to build a pipeline (in all the different steps of the proces, from melting the steel, digging the trenches, feeding the workers) you wil NEVER recover that fossil fuel. You will only extract Euros (in this case) from the wider economy, but those are only exchange tokens, you can’t burn them to drive your shovel. This is the fundamental lie of the fossil credit economy. You can’t repay debt!

This phenomenon is pervasive in our economy, no wonder, as it is driven by the desire to maximize carbon credit cashflow. So banks have initiated fossil intensive activities everywhere to profit of the resulting cashflow, mainly caused by people burning the fossil fuel they buy, be it for fertilizers, logistics, processing, etc. In Holland this is the case with intensive farming. Dutch farmers have been promised profit if they grow their operations to a size that does not serve Holland at all, in fact the nitrogen output (manure) of pigs is poisoning the land, water table ec. And its not even necessary to do so but the nitrogen cashflows are protected by strict laws (you can’t recycle it, you have to dump it on the land somehow). The nitrogen from roads, airports and farmers are competing for the total natuional pollution budget, an interesting process, and the farmers are complaining (egged on by their banks and their paymasters) that their investments will have been in vain because their growth is now being curtailed (or is about to be). Banks knew all this when they got in but they obvkously like sunk cost as it is their primary means of control of society.

Of course to us roboeconomists it is clear no fossil fuel investment will ever be repayed, so don’t worry if it turns out to be a misinvestment : write it off! Now we find we have an important figure on our side : Timmermans, the climate szar of Europe. He is telling the Rabobank, an important fiancier of the big companies behind intensive farming in Holland, to look at their loans, and wonder which ones they should write off. His argument is that these loans will not have any yield because laws will prohibit the scale up envisioned by the bankers. That is one way of putting it, Timmermans keeps reasoning in the framework of the banks. He also assumes laws will actually prohibit the growth of the meat industry.

Debt in the fossil credit economy can NOT be repayed, as they represent burned fossil fuels, and nobody makes fossil fuels.

Banks go against this of course. Their argument is to maintain their lies. “Don’t treat these loans as subsidies.” “Our savers want their money back.” the usual “We have a responsibility to our shareholder” bullshit. This combined with “we need to take small steps in making farming sustainable”. But Timmermans is on to something. Banks have gotten about 2 trillion Euro support during the Covid pandemic. Don’t pretent a bank needs money from its savers to extend a loan. That makes no sense if you accept that the economy can grow (the total amount of money flowin in it can increase). Then there is fractional banking (to kind of explain what they are doing) so you have to be an absolute noob to not see that the usefull function of banks is to distribute fossil resources if it benefits the health and happiness of the public, and that banks ignore this and also extend it when the loans only benefit themselves.

Timmermans should think about his remarks and try to translate it in a general policy directive. That all loans and debts associated with emission intensive infrastructure or activities should be written off. This kills the ability for banks to lobby and build myths around them which may move the public to support them. Of course farmers have stress as they want to run a honest business. A write-off of their debts would deprive the banks of a desperate army willing to occupy and disrupt public life.

But think of all the other lobbying and bribing going on that we can’t observe. It would be great if someone explain that once you use fossil resources to build a pipeline for example, those resources are lost, they are CO2 in our atmosphere, doing damage, and no amount of doing everything else will bring those resources back. And we need that O2! Fossil credit debt is an illusion.

All loans for high emission activities that cause those activities to continue should be written off if not immediately at least at a much faster rate than planned. This will come at zero cost to society, except when banks try to take revenge for shrinking their power.

It does make sense to limit the expenses we can make, because there is a limited amount of people that give sensible direction to those expenditures. No use dumping a truck load of sandwiches next to a picknick of five people, they can’t make use of them. If we manage to make more usefull technology we may find a use, but then we will use renewables, not fossil fuels.