Banking On Climate Crisis – The Merchants Of Doom

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This is a story on how some good ol boys are pushing extreme scenarios to make big money.

Fiduciary duty is getting thrown overboard by banks, insurance companies and investment houses as they race to capitalize on carbon schemes and the “green economy” – all under the guise of “saving the planet”.

When large financial institutions like banks, insurance companies or investment houses invite leading catastrophists to give speeches for the purpose of spreading fear among clients, and ignore the vast volume of science that indicates the contrary, then they are breaching their fiduciary duty to these clients.

Has bank-sponsored climate-fear-mongering become the new way of exercising fiduciary duty to clients? Seems so.

The OLB invites a climate extremist to speak to clients

A short time ago I got a brochure in the mail from my house bank, the Oldenburgische Landesbank (OLB). The brochure features distinguished speakers from media, politics, industry and science who are slated to give speeches during the year, all part of the OLB Forum. Being both a private and business clientof the OLB, I got this brochure too.

When I looked at the brochure I was dismayed to learn that one of the speakers this year is none other than the Merchant of Doom himself – Stefan Rahmstorf of the Potsdam Institute For Climate Impact Research. He is scheduled by the OLB Forum to give a speech in Osnabrück on October 12:

Die Klmakrise (The Climate Crisis)

Wednesday, 12 October 2011, Osnabrück, 19:00 h

Speech by Prof. Dr. Stefan Rahmstorf, Director of the Earth Systems Analysis at the Potsdam Institute for Climate Impact Research, on the state of the science on climate change.

Needless to say, I was not pleased to learn that my house-bank is getting into end-of-the world scenarios and working with such science salesmen. Banks pushing end-of-the-world scenarios, chronic pessimism and fear-mongering are not in my best interest, and certainly not in the best interest of many other businesses.

“What’s going on?” I thought.  Either the OLB is very naive, or is in the scam to make big money. Gee, I wonder which?

My call to the OLB

So I picked up the phone and reached a middle manager (little customers don’t reach the top brass) and expressed my displeasure over their invitation of Rahmstorf. I asked the OLB lady on the phone if the bank was aware of his extreme positions and his scientific intolerance. She said the bank was not aware of anything unusual and that they simply thought the distinguished Professor Rahmstorf would be interesting to have as a speaker. All very innocent sounding.

I explained to her how extreme Rahmstorf views are, but this all seemed foreign to her – after all she’s a banker, and not trained in science. I also sent a few reports and suggestions for alternative speakers that I think ought to appear to balance things out, but got no feedback. Overall I was a dissatisfied with the OLB’s response, attitude and dismissiveness. They just don’t want to be bothered by it. That’s why I decided to do a little research and write this post.

Surely the OLB top management is fully aware of Rahmstorf’s extreme scientific views. His invitation is no accident; it’s by design. Banks are salivating over the prospects of making the big profits that the green movement promises, clients be damned. Let them meet Rahmstorf and get to know the fury of man-made climate change up close and personal.

OLB is 64.3% owned by insurance giant Allianz

Who really stands to gain from the climate crisis scenario and cutting carbon emissions? Overwhelmingly the answer is: investment banks, re-insurers and financial institutions, among others. They are all maneuvering to cash in big time at the expense of many small businesses and the working class, who will have to pay through the nose. Banks are focused on their interests first and then on the interests of its clients.  That’s the reality. There’s a saying about bankers:

When the sun shines, they give you an umbrella. And when it rains, they take it away.”

The OLB invited Rahmstorf because his horror scenarios help to herd investors in a certain investment direction and mindset. Considering the vast array of investment instruments that the low carbon-economy presents for some, there’s a real incentive to spread doom and gloom over the future of the climate.

The OLB purposely got Rahmstorf for the task of performing his magic with OLB corporate clients. Looking deeper into the OLB, one finds that the staid, conservative bank is majority-owned by insurance and financial powerhouse Allianz. And Allianz’s reinsurance arm Allianz SE Reinsurance stands to profit handsomely from higher insurance premiums based on Rahmstorf’s future climate threats.

But aren’t insurance institutions, banks, etc. obligated to inform their potential clients about the other side of the science, and thus the risks of green investments? Not if they want to make tons of money doing so. They’ll be more than happy to watch clients panic and buy up the green investments, carbon credits and accept higher insurance premiums. So tell the clients only what they really need to know, i.e. the world will end unless you pay green.

Rahmstorf: hired merchant of doom for re-insurers

Stefan Rahmstorf, distinguished professor of climate science of the renown Potsdam Institute for Climate Impact Research will give them the latest on the state of the climate (crisis).

He’ll instill the fear of catastrophic climate change that’s needed to generate acceptance. Surely they’ll believe him and do what is necessary to save the planet. The problem is that Rahmstorf fancies himself as a prophet who is not to be questioned. And who is going to? And as long as large institutions stand to profit from it all, questions aren’t likely to be raised.

And whenever one sees promotional literature from the world’s largest reinsurer, Munich Re, Rahmstorf’s name appears. He’s the European bank and reinsurer industry’s top man – their salesman for gloomy scenarios. Read klimaskeptiker (German).

With this in the backdrop, the Munich Re has a special fondness for the PIK climatologists. The klimaskeptiker writes:

The climatologists produce the most wonderful horror scenarios, which appear to be indisputable proof and prognoses that man is faced with many more and much worse natural catastrophes in the future. With this seemingly unavoidable and fast approaching catastrophe, politics can be driven and customers can be duped into thinking that higher insurance premiums are essential because the damage will be much higher in the future.”

Also read here a paper written by Rahmstorf for Munich Re called: Abrupt Climate Change (in German).

Surprise! Allianz is trading in carbon too

Moreover, Allianz is heavy into carbon trading. Its website writes:

Carbon markets have grown rapidly in the past few years and play a central role in global activities involving climate change today. In 2008, the volume of traded certificates totaled four billion tons of CO2. The global carbon market will also continue to experience strong growth far beyond the boundaries of the European Union over the coming years.”

Of course banks and financial institutions are allowed to pursue profits and their interests, but must do so while fulfilling their fiduciary duty to clients, and act in the best interest of society. Indeed the OLB, and surely a huge number of other banks with it, are going down a questionable path, especially when one takes a look at the complete body of climate science, and not only the extreme science of Stefan Rahmstorf. For now they are claiming to be working for the good of society by claiming it’s to protect the climate. Of course this is based on dubious science, and they refuse to look at any science that shows the contrary.

OLB and corporate misogyny?

And probing a little deeper into the OLB, one sees they are also neglecting more than just their fiduciary duties to clients, but that they’ve also abandoned their social responsibility to half of the German population (women). It’s indeed quite the good ol boys club. Misogyny is probably too strong a word of course, but when one looks at the top management of the OLB, one can only conclude that top managenment is no place for a lady.

There is not a single molecule of estrogen to be found there. On its Board of Directors, 0 of 5 are women. Its Supervisory Board  is not any better: 0 of 13 are women. And here’s the page with its notable employees, the movers and shakers in the bank: a whopping 0 of 24 are women!

You mean to tell me there is not a single German woman out there that can do the job? No corporation in Scandinavia, North America and in many other European countries would ever get away with this level of chauvinism.

I know of a lot of women’s groups who might not be too impressed by these figures.

It has to be pointed out that the Oldenburg region is a very traditional and conservative area. But we are also living in the year 2011 and not in the Dark Ages. Hard to believe that this absence has gone unnoticed.

The OLB also has an advisory council: here of 61 members only 6 are women. So we’ve got a good ol boys’ club here. After all, they are only helping to rescue the climate. They got Rahmstorf on board to certify the science.

Final comments

Don’t get me wrong. My family has been served very well as clients by the OLB for over 15 years, and we want to continue doing business with the bank. But it is becoming increasingly obvious that the OLB has to change its way of running things. The OLB is not alone here. I’m sure the situation is hardly better at the other German banks. So I’m not advocating clients to boycott. We just want to see BALANCE.

I preregistered to see Rahmstorf’s climate spook-show. If any NTZ readers in the area are OLB customers, do sign up. Who knows, maybe they’ll be a few skeptics there to balance the discussion.

Further reading:

http://www.telegraph.co.uk/comment/columnists/christopherbooker/8349545/Unscientific-hype-about-the-flooding-risks-from-climate-change-will-cost-us-all-dear.html

http://ef-magazin.de/2011/02/27/2879-klimaschutz–billionen-fuer-nichts

http://rogerpielkejr.blogspot.com/2010/11/82-billion-prediction.html

http://www.theatlantic.com/business/archive/2010/04/whats-an-investment-banks-fiduciary-duty-to-clients/39519/

http://en.wikipedia.org/wiki/Fiduciary

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14 responses to “Banking On Climate Crisis – The Merchants Of Doom”

  1. Brian G Valentine

    That “abrupt climate change” paper by Rahmstorf is a Hunk of Junk. I simply skimmed through this but did not see reference to the only known example of “abrupt” climate change resulting from magnetic pole reversal.

    This type of “catastrophe” of prediction of non-existent threat has the potential to ruin the financial industry all right.

    There seem to be too few responsible adults around with the sense enough to prevent it

  2. Green Sand

    PG maybe you should consider adding the following to your list of additional reading:-

    “The $82 Billion Prediction” – http://rogerpielkejr.blogspot.com/2010/11/82-billion-prediction.html

    In it is the following statement describing the real driver behind this “game”.

    “Joining them was British climate physicist Mark Saunders, who argued that insurers could use model predictions from his insurance-industry-funded center to increase profits 30 percent.”

  3. DirkH

    More fun. Economy minister Brüderle calls in Gasoline summit; rumors make German biofuel makers (CropEnergies, Verbio) crash by 10 % today – the reason: insecure customers avoid E10 fuel, leading to a glut in storage.

    http://www.ftd.de/unternehmen/industrie/:verwirrung-um-e10-verband-stoppt-biospirit-stopp/60020653.html

    CropEnergies:
    http://www.comdirect.de/inf/aktien/detail/uebersicht.html?ID_NOTATION=15725147

  4. Brian G Valentine

    That “Potsdam Institute” is a real work of art, isn’t it.

    Fifty years ago that thing would have been shuttered for advocating sedition.

    Now, they are dictating policy to a spineless Government. This group is composed off lice and there is nothing anybody can do about it

  5. R. de Haan

    1. Stop doing business with German Banks.
    Foreign banks work fine in Germany.

    2. Stop doing business with the Alianz Group and Münchener Rück,
    They are practically pushing the AGW scam.

    3. Never even buy gasoline mixed with gasoline or bio diesels.

    4. Bring tar and feathers to Osnabrück October 12th.

    1. Brian G Valentine

      You cannot avoid buying diesel without biodiesel, there is a 5% minimum standard now and it is going to get bigger.

      Thanks to PIK and others, Germany is responsible for 80+% of the EU biodiesel market. That’s an eye opener, isn’t it.

      US biodiesel manufacture is down to about 400,000 US gallons per year, with a 2.4 billion gallon per year capacity.

      German consumption alone is ten times that of the US

  6. R. de Haan

    Brian G Valentine
    3. März 2011 at 20:36 | Permalink | Reply
    You cannot avoid buying diesel without biodiesel, there is a 5% minimum standard now and it is going to get bigger.

    Thanks to PIK and others, Germany is responsible for 80+% of the EU biodiesel market. That’s an eye opener, isn’t it.

    US biodiesel manufacture is down to about 400,000 US gallons per year, with a 2.4 billion gallon per year capacity.

    German consumption alone is ten times that of the US”

    Right, but the German diesel consumption is pushed by strong rise of diesel powered cars during the past 15 years and the fact that the blending of diesel with bio diesel comes without negative effects for the engines.

    This is different with gasoline cars.

    The use of diesel has caused an unbalance for the refinery of oil.
    The demand for diesel is much bigger than the demand for gasoline.
    That’s the second fact pushing the bio diesel market.

    We are currently swapping huge amounts of gasoline for diesel with the USA where diesel demand is much lower compared to gasoline.

    The entire bio and cap&trade scheme is based on a totally corrupt government and we should stop it.

    Contacting your bank was a good move Pierre but I think the time has come to take on the insurance companies.

    They hate negative publicity, they hate e-mails and they hate customers canceling their policies.

    Just give it a try.

  7. Brian G Valentine

    I think diesel fuel ought to be made from coal gas as Fischer-Tropsch oil, and gasoline from coal gas via methanol, and this could be co-located with a nuclear operation that makes hydrogen by electrolysis during off-peak demand hours. The oxygen produced can be used to enrich the coal gasification process (any electrolysis process to make hydrogen makes no sense at all unless there is an immediate use for the oxygen). Makes a lot of CO2 that ought to be released into the atmosphere as all CO2 should be.

    I’d like to see that happen in the US.

  8. R. de Haan

    Mmm,
    You can produce perfect sulfa free diesel oil from natural gas and gasoline from coal.
    With the current oil prices both technologies will be competitive.
    I’m not a fan of hydrogen because of the storage problems, high pressure
    cryo tanks and pumps, short range and low power output.
    In principle a 100 HP engine only delivers 50% of it’s rated power and 40% of it’s range. Not very practical.

    LPG is a different matter.
    Good range, no power loss and clean emissions.

    But whatever technology takes off, please let the markets decide which technology prevails, not governments and subsidies stolen from the tax payer.

  9. R. de Haan

    Scientists pull a snow job on reporters in teleconference
    I wonder why they did that?
    http://wattsupwiththat.com/2011/03/03/“scientists”-pull-a-snow-job-on-reporters-in-teleconference/

    1. Brian G Valentine

      It has been a long time since the field of “climatology” has not been saturated with paranoiacs, dead-enders.

      Why single out “climatology” the same thing applies to a lot of disciplines

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