“Nothing Has Made A Difference”

Articles From: Heptagon Capital
Website: Heptagon Capital


Equity Fund Manager

Heptagon Capital

These were the cheery words used to describe attempts to tackle climate change to-date. They were spoken by Sir Dieter Helm CBE, a Professor of Economics at the University of Oxford and a leading expert in the field. Your author was privileged to join a small group meeting with Sir Dieter last week to hear about both the problems of, and solutions for, managing climate change.

The stark reality, Sir Dieter reminded us, is that since 1990, two parts per million of carbon have been added to the planet’s atmosphere annually, “without fail.” Put another way, the world is getting more polluted. Sure, both the Great Financial Crisis and the COVID-19 pandemic led to a reduction in emissions ­– since these are correlated with economic activity – but this is only half the problem. Climate change is a function of both emissions and sequestration – the capturing, removal and storage of carbon dioxide from the earth’s atmosphere. To crack climate change, according to Sir Dieter, governments need to implement policies to address both these challenges.

Solving the problem is, of course, non-trivial. Cynically – but correctly – Sir Dieter highlighted that any government’s track record will be determined by the (often arbitrary) goals it sets. Take the UK, which Sir Dieter suggested existed in a state of “hubris” over its climate policy: sure, the country now has very little carbon-emitting industry (which it is happy to publicise), but this only shifts the problem elsewhere. The goods imported to the country will have generated perhaps a larger carbon footprint, owing to production and subsequent transportation, than had they been produced domestically. More positively, for the UK, it has at least fast-tracked the closure of most of its coal plants (which are heavy carbon-emitters) and is placing a large bet on renewables. The UK may be “the best place in the world to do offshore wind”, per Sir Dieter.

What to make of the above? We have sympathy with Sir Dieter’s stance that COP (the annual Climate Change Conference hosted by the UN) is “not working” and that a more holistic approach to solving climate change is necessary. However, whether solutions such as a cross-border carbon tax – one of Sir Dieter’s mooted ideas – are practically workable remains to be seen. We also think it makes sense for countries to diversify their energy sources. Renewables are almost certainly the way forward (as we first argued in 2018), but the challenge of intermittency needs to be managed. Better battery storage solutions and smarter grids both make sense, while longer-term, green hydrogen should also feature in the energy mix.

Originally Posted January 25, 2023 – “Nothing has made a difference”

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise. 

Disclosure: Heptagon Capital

The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document.

The document is protected by copyright. The use of any trademarks and logos displayed in the document without Heptagon Capital’s prior written consent is strictly prohibited. Information in the document must not be published or redistributed without Heptagon Capital’s prior written consent.

Heptagon Capital LLP, 63 Brook Street, Mayfair, London W1K 4HS
tel +44 20 7070 1800
fax +44 20 7070 1881
email [email protected]

Partnership No: OC307355 Registered in England and Wales Authorised & Regulated by the Financial Conduct Authority

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Heptagon Capital and is being posted with its permission. The views expressed in this material are solely those of the author and/or Heptagon Capital and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.