Wednesday, March 1, 2023

The Hoover Institution on "Markets vs. Mandates: Promoting Environmental Quality and Economic Prosperity"

On January 30, 2023, the Hoover Institution hosted a one-day conference on Markets vs. Mandates: Promoting Environmental Quality and Economic Prosperity. You can find an overview of the program (including speaker bios) here, and recordings of the seven sessions here. What follows are some excerpts from the session descriptions.

Sanjai Bhagat explained that ESG investing principles and new standards of corporate social responsibility are not based on the fiduciary duty to maximize shareholder value.


John Cochrane asserted that the Security and Exchange Commission’s plan to enforce ESG investment practices isn’t based on “saving the planet” but on bending corporations to serve a particular political agenda. Echoing Bhagat, Cochrane said the ESG mandates would not maximize shareholder value. It would instead deny capital to companies, lower their asset prices, and curb returns to investors. ESG mandates would also pervert markets, destroy competition, and encourage some companies to rent-seek from the government.


Mark Mills argued that ambitious goals to achieve zero carbon emissions in the coming decades are delusional. He said that over the past 20 years, after $5 trillion spent worldwide, there hasn’t been any significant movement toward transitions to renewables. Today, global energy derived from wood exceeds that of solar and wind power combined (which make up just 3 percent of all fuels). Moreover, a rapid transition to these other renewable sources, including batteries, would require a level of mineral extraction never seen in history.


Steven Koonin argued that many advocates of sweeping mandates for climate change frequently peddle misinformation, promote extreme scenarios as the consequence of global temperature rises, and smear critics of their arguments as “deniers” and with other detractions. Koonin then presented several examples from his research that provide context for environmental trends that are usually omitted from the prevailing literature on the subject.

Stefan J. Padfield | Permalink


Perhaps related: "The Senate voted Wednesday 50-46 to block a Labor Department rule allowing retirement fund managers to consider environmental, social and governance (ESG) factors when making investments."

Posted by: Stefan | Mar 1, 2023 2:27:02 PM

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