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The Greening of Goldman Sachs By: Steven Milloy
Fox News | Tuesday, November 29, 2005


Goldman Sachs is the latest business to surrender to the junk science-based, anti-people agenda of the radical Green movement.

The investment banking giant announced this week that it would lobby for national global warming policies and adopt environmental extremist-approved lending — or rather, “non-lending” — policies for energy and land-use projects in the developing world.

Though the new policy is cloaked in the business-friendly tones of seeking “effective market based-solutions to address climate change, ecosystem degradation and other critical environmental issues,” there’s nothing market-friendly, much less people-friendly about Goldman’s appalling capitulation.

First, markets imply voluntary action. But Goldman was coerced into this action. The Rainforest Action Network started pressuring Goldman into adopting RAN’s anti-development agenda in March 2004, in much the same way as RAN wrung similar policy changes in America’s four largest banks – Citigroup, Bank of America, JP Morgan Chase & Co. and Wells Fargo. RAN announced a “Goldman Sachs Victory” on its web site this week, notching another win in its campaign against alleged “investments of mass destruction.”

Although Goldman says it will lobby for reducing greenhouse gas emissions, it may want to take note that the primary “market” for public policy in the U.S. — that is, the Congress — has repeatedly rejected global warming alarmism.

The Senate rejected the Kyoto Protocol by a vote of 95-0 in 1997 and more recently rejected the Kyoto-like legislation offered by Sen. John McCain and Sen. Joe Lieberman in 2003 and again in 2005. A Senate staffer told me this week that such legislation won’t likely be enacted anytime soon.

Goldman’s “market-based” ideas for reducing greenhouse gas emissions are rather dubious, particularly the promotion of so-called emissions trading markets.

Goldman essentially wants to profit by acting as the middleman for businesses that are compelled by the Kyoto Protocol and other similarly misguided greenhouse gas reduction schemes to trade carbon dioxide emissions allowances — that is, legal permits to emit hot air. The Kyoto Protocol, in fact, makes a commodity out of hot air — ennobling it with the status of real commodities such as gold, wheat and crude oil — “allowing” nations to buy and sell emissions allowances depending on whether they will meet their hot air emissions limits spelled out in the treaty.

Created and regulated by an international bureaucracy — literally out of thin air —– greenhouse gas emissions allowance trading makes a mockery of true markets, where physical commodities of real value are traded.

Goldman also boasts of its partnerships with Shell Wind Energy and BP Solar. But wind and solar power are expensive and unreliable. Neither is viable as an energy source without significant government subsidy. General Electric’s concept of supplying U.S. energy needs by covering 7 percent of Arizona with solar panels, for example, would cost $16 trillion for solar panels alone at current market prices. Wind power is only available in offshore or remote locations.

Two critical needs of the developing world — affordable and reliable electricity, and the ability to develop natural resources — are blocked by Goldman’s policy.

“We will adopt explicit prohibitions against financing or investing in industrial activity in certain limited areas which are so environmental sensitive that they must be preserved in their present condition,” says Goldman’s new policy.

What this likely means is described in Paul Driessen’s new book, Eco-Imperialism: Green Power, Black Death. A dam project in India’s Gujarat province, for example, was halted after eco-activists pressured international lending agencies to withdraw financial support. The dam was stopped because it would “change the path of the river, kill little creatures along its banks and uproot tribal people in the area.”

One resident angrily called the activists’ handiwork “a crime against humanity,” as the project would have provided electricity for 5,000 villages; low-cost renewable power for industries and sewage treatment plants; irrigation water for crops; and clean water for 35 million people.”

Without offering realistic alternatives, Green activists led by the International River Network blocked the 200 megawatt Bujagali dam project in Uganda because it would ruin kayaking and river rafting. Meanwhile, less than 5 percent of Ugandans have access to electricity.

Goldman’s policy also targets so-called “illegal logging”— which certainly sounds bad, but what does it really mean? Through non-governmental organizations and the United Nations, environmental activists have developed the unmitigated power to designate virtually any tract of forest as “sensitive” or “endangered,” so that any logging conducted there can be considered as illegal.

If the environmentalist-directed United Nations can’t coax, coerce or compel developing nations to designate forests as off-limits to logging, environmental NGOs promote eco-labeling standards that, when enforced in the commercial markets, make wood from such forests unmarketable or “illegal.” Goldman cites such standards in its policy.

Either way, local populations are prohibited from earning money from developing their own natural resources and, therefore, blocked from raising their standard of living.

Goldman may tout its new environmental policy as a “market-based” solution, but it actually seems as more of a “market-erased” solution. Goldman’s capitulation to Green activists and the accompanying white-washing of its submission is a dark moment for a business that was once a proud symbol of the prosperity made possible by free markets and free enterprise; it’s a darker moment for the desperate, disease-ridden poor in the developing world whose only hope is economic development.

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Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.


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