I do not pretend I understand enough about equity markets, but if pension plans outside the USA are creating a non-trivial uptick in demand, and if your momentum premia notion from the other article is correct, then it might eventually push USA pension plans to allocate more and more to these ESG investments (not exactly a Madoff Ponzi scheme, but it kinda behaves like that from where I sit). Furthermore, if actual removal or decrease of subsidy to traditional fuel happens (during Biden?) in the USA, even value investing for certain power/energy/utilities would quickly swap with "green" energy no? Even now I think the tax breaks (in the USA) are being reverted back higher for those investing in solar power.

But what is truly investable?

If I put on my engineering hat, the actual efficiencies are still uncomparable between fossil fuel and current alternative technologies. But with a subsidy, these alternatives will financially be more viable. But then the wholistic end-to-end view on waste and related effects on the ecosystem (e.g. worn-out batteries anyone?), what are we really doing?

There are actual solutions today that reduce harmful emissions and truly provide an incremental positive effect - except they are not sexy, or at least they are not being promoted as sexy.

"Attractive" investment is somehow equated to soundbites (or twitter feed) where perhaps a popular personality might vilify one particular target and the masses of uneducated followers take it as gospel because the masses do not even understand the different aspects of power - supply, storage, transmission, distribution - especially in the context of the WHOLE planet. But a lot of influencers, from the government to the financial advisors touting these "sustainable investments" are a) not educated enough or b) maybe they know, they just do not believe they will be alive long enough to suffer the effects of their folly (is this why the pricing of carbon credits are being manipulated despite we are already in the 2020s)?

Are humans really just a lucky collection of dumb carbon atoms that will eventually end up in maximal entropy despite our belief we are "intelligent" beings?

What do you think?

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Lots to unpack here and more than I can tackle. But two things: I have written about the tipping point for the adoption of renewable energy in my book on geopolitics. In short, wind and solar are already the cheapest power sources in most countries (including the US) even without subsidies. There is a reason why Exxon uses wind energy from the West Texas plains to power it’s fracking pumps. More here: https://www.cfainstitute.org/en/research/foundation/2021/geo-economics-ch-8

Second, your “Ponzi scheme argument “about flows is exactly what is going on in the ESG space right now. See this post: https://klementoninvesting.substack.com/p/the-truthiness-of-esg-criticism-part

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