A26: Global Warming Part 8: The Sky's the Limit

This final section shall be broken up into a few parts. First let’s start by looking at the funding.

Often we hear that Big Oil is funding climate denial and there is a battle between fossil fuels and the poor environmentalists. On TV, they can be seen on their little boats surrounding the oil rig while the authorities drag them away.  

The media presents these visuals as evidence of a lopsided war between corporate greed and environmental virtue, and look how true they are! In 2007 a fiery report by the Union of Concerned Scientists argued that between 1998 and 2005 Exxon spent nearly $16 million funding a network of 43 advocacy organizations that sought to muddy the waters on global warming science.

There it is, the smoking gun. Newsweek, NBC Nightly News, ABC, and many others quickly scooped up the story to inform the public of these facts.

Of course, they forgot to mention that in 2002 the company pledged $100 million to Stanford University to combat global warming. Nor were they alone, as General Electric pledged $50 million, E.ON a large German energy company $50 million, and Schlumberger the oil-field technology company $25 million, for a grand total of $225 million.

Since then, Exxon sunk more money into green with $600 million into algae-based biofuels in 2009, and between 2025-2030 they intend to spend $30 billion in lower-emission investments.

Likewise, Shell plans to invest $10–15 billion by 2026 and halve its emissions by 2030.

One might say these corporations are merely doing this to protect themselves, and that they continue to fund opposition behind the scenes. Maybe, yet such small numbers matter little as Big Oil is nothing compared to Big Government.

Let’s start with the small change. In 2007, as a minor budgetary allocation, the U.S Department of Agriculture (USDA) issued a $20 million grant to research how ‘farm odors’ contribute to global warming. They also awarded an additional $20 million in Conservation Innovation Grants to 51 separate research projects designed to help dairy and agricultural producers limit their greenhouse gas emissions.

This is merely the tip of the spear. The Capital Research Center, analyzing the Office of Management and Budget Data, found that federal expenditures between 1993 to 2014 exceeded $166 billion. They were not alone as the Science and Environmental Policy Project (SEPP) calculated from Fiscal Year (FY) 1993 to FY 2013 total US expenditures on climate change amounted to more than $165 Billion.

By 2016 the Department of Housing and Urban Development awarded $1 billion through its Community Development Block Grant program to projects protecting against climate change-related natural disasters. NASA’s Earth Science program was spending $1.8 billion. Funding for the U.S. Global Change Research Program rose to $2.6 billion. At the National Science Foundation, the geosciences program almost doubled to $1.3 billion. These Earth sciences are significant because climate-related research has come to dominate the industry’s allocation of federal research grants.

Let’s look at what retired MIT atmospheric scientist Richard Lindzen had to say: 

By 2009 alone, the “global warming science machine” was financed to the tune of $79 billion. We are not describing a modest funding advantage, but a systematic disparity of approximately 3,500 to 1. These are numbers from over a decade ago; today the gap has only widened.

The Inflation Reduction Act injected $369 billion into climate spending; Germany has committed $110 billion to solar infrastructure; the European Union has earmarked $7 trillion for climate policy; and the UN’s own Paris framework anticipates $100 trillion in climate-related costs by the end of the century!   

So who has truly prostituted themselves in the name of Big Energy? If a cabal of industrial-funded scientists were truly subverting the truth, where are they? They are nowhere to be found in the halls of academia nor heard on any mainstream platform. Where can we find them? We can’t, of course, nor will we ever. Their phantom presence is merely a distraction, a necessary fiction required to shield the real architects of this policy from genuine scrutiny.

While the scientific establishment has been reshaped by the allure of state-directed funding, the true windfall lies elsewhere. We have seen the subsidies and the tax game; now, we must examine the ultimate profit engine: the global carbon market.

The “cap-and-trade” system is presented as the pinnacle of market-based environmentalism. Under this framework, which operates as a Compliance Carbon Market (CCM), the state establishes a hard limit on total emissions and lowers this cap annually. Producers are to hold government-issued allowances for every ton they emit. Firms that manage to lower their output below their limit can sell their surplus allowances to entities that cannot; it is, in theory, a way to balance economic and ecological interests. 

However, a critical question remains unasked: What is the true scale of this system? 

If governments are serious about their mandates—reducing emissions by 50% by 2030 and reaching “Net Zero” by 2050—then virtually every ton of carbon produced on Earth must eventually fall under this regulatory umbrella. To grasp the magnitude of this market, let us calculate its total valuation.

Now, come little piggies, it’s almost dinner time. Let us begin with the market’s current foundation. According to the World Bank, turnover of carbon trading reached $126 billion in 2008. Point Carbon estimated trading in 2009 was about $136 billion, a significant leap from the $58 billion recorded in 2007.

During this period, Commissioner Bart Chilton, head of the energy and environmental markets advisory committee of the Commodity Futures Trading Commission (CFTC), predicted it would soon dwarf every other commodity his agency regulated:

Richard L. Sandor, chairman and chief executive officer of Climate Exchange PLC, pushed that projection even further, predicting that annual trades would eventually total $10 trillion. Quite some projections, but let us not get ahead of ourselves.

In 2020 McKinsey reported that global carbon markets were worth roughly $100 billion, with a trading turnover of about $250 billion (It should be noted, however, that the total value of global carbon markets grew by over 20 percent in 2020—the fourth consecutive year of record growth).

Hundreds of billions is no small number, but trillions, what were those two financial architects seeing? Curiosity kills the cat, but I cannot help but wonder: if the market continues to grow at 20 percent per annum, what would it look like by 2035?

A trillion and a half. This is certainly no small amount. 

But Francisco the market cannot be that large. It might grow to a few hundred billion, but then stabilize.

Perhaps you are right. But hypothetically, what would the ceiling of this system be? If we want to see the true potential of the carbon market, we must move beyond mere trading turnover and track the total number of greenhouse gas emissions against the price society will eventually be forced to pay to emit them. To calculate a genuine scale of this market, we can apply a simple economic formula:

To reach “Net Zero,” we must account for virtually every ton of global greenhouse gas emissions. According to the 2024 EDGAR report, global anthropogenic emissions, excluding, LULUCF reached 53.2 Gt (billions of tons) of CO2​e. Despite the rhetoric of “climate action,” this represents a 1.3 percent increase over 2023.

While global authorities maintain the fantasy of a 50 percent reduction by 2030, the reality of industrial growth tells a different story. Industrial sectors are expanding: global freight is projected to grow 3 percent annually, agriculture 1.4 percent, energy 3.2 percent, and manufacturing 2.3 percent. Given that national emission “reductions” are typically just relocated to other jurisdictions, we must be adults and assume emissions will continue to grow around their current rate of 1.3 percent.

Now, what should we charge for emitting a single ton? Well, if we are true environmentalists, we surely need the cost per ton to be at an absolute bare minimum of $20. Let’s see what that looks like. :

A trillion-dollar market. A nice start, but $20 is a mere drop in the bucket. If we truly wish to save the Earth from its burning destruction, we will have to be a little more ambitious. Let’s travel to Europe, where they are already showing us what true environmental commitment looks like.

The European Union’s market price of carbon is currently €71.83 per ton or $83.75 USD. If we apply this “European standard” to global emissions, the numbers look like this:

A $5 trillion market cap, now we are getting somewhere. However, I am not satisfied. Unlike you selfish miscreants, I am willing to nobly sacrifice everything to stop the world from descending into flames. Therefore the price producers pay should equal the full cost of a ton of CO₂  on society. To find those figures, we turn to the gold standard of righteous regulation: the U.S Environmental Protection Agency (EPA):

We now multiply the social cost for each year by that year’s total emissions to find what is to be charged per ton of CO₂. Let's use simple linear interpolation to find cost:

For those more mathematically inclined the equation would be:

Here is the result: 

Fifteen trillion dollars.

For perspective, the entire global oil and gas market is projected to reach approximately $8.79 trillion by 2034.

Soak that in for a moment: we are looking at a potential market that could be larger than the size of the oil industry. However, let’s go a little further:

The agency is telling you, in plain English, that these numbers are just the beginning. If their current data is an ‘underestimate,’ then let’s look at the true potential using the upper-range projections provided in their own reports:

Twenty-four trillion! Are you getting it now? This is a commodity purely built by government regulation, capable of reaching the scale of the entire U.S. GDP.

Now do you understand the fearmongering and the reason for this whole faulty science? The most important number for determining the size of the carbon market is the price charged per emission. The more they can incite fear, the higher the cost per ton, and the larger this financial machine grows.

That is exactly why you aren’t allowed to question the science. If someone actually looks at the data, they will realize that carbon dioxide is not the existential threat it’s made out to be, unveiling this entire movement as one gigantic financial heist. Compared to this, the subsidies and tax game look like child’s play.

Now, consider the players. Let us start with the most obvious. Who stands to gain from a mandatory, trillion-dollar market? Who wants us trading these imaginary commodities? Who makes money on every single transaction in the global economy…the banks.

Money Talks. Every major finance house from Goldman Sachs and JP Morgan to Deutsche Bank stands to make profit as brokers of this trillion dollar carbon trade.  

 It doesn't matter whether you buy or sell, the bankers take a slice both ways. The bigger the market, the larger the harvest. It is no coincidence that these institutions are promoting and urging governments to adopt carbon trading. They are effectively turning the atmosphere into a fee-generating utility.

Now does it make sense why they are investing billions to sustainability and going green? Just look at the money Goldman in spending in this field.

Do you not find it remarkable how all these institutions have suddenly morphed into virtuous vanguards of the environment. Unlike anytime in history, every major corporation now is simultaneously deciding to sacrifice their own wellbeing for the sake of the Earth. That is because it was never about saving the Earth, but about money, and a lot of it. Portraying themselves as morally righteous is just a bonus.

It is one thing to gain fair compensation for an honest day's labor, it is another thing entirely to make a profit by swindling it out of the common man’s pocket.  

I am sick of all the fake morality. I have seen far too many families have their lives utterly destroyed by this environmental nonsense, and I have no intention of watching it continue. Consider this a warning: I am just warming up. There are many more bones to break before we uncover the full extent of this beast.

The final piece of the puzzle is the question of scale. Carbon markets are at the national level, so how will they become interconnected? For that answer, we require a bit more financial wizardry: carbon credits.

Your Humble and Obedient Servant,

Francisco Pereira

Morano, Marc. The Politically Incorrect Guide to Climate Change. Regnery Publishing, 2018.