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Why RIAs (Republicans, too) need to snap out of willful ignorance about climate change to claim the mantle of wealth stewardship

Conscientious financial advisors must engage in real due diligence of original documents related to this subject

Author Guest Columnist Ron Rhoades May 20, 2014 at 6:37 AM
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Ron A. Rhoades: I don't believe that Republicans are immune to the persuasion of science.

Ron Rhoades



May 20, 2014 — 11:40 AM

Man made global warming is a MYTH…once again proven false, in a peer reviewed study, then was ban from being published because it would “hurt the cause”...stop your nonsensical twaddle. Admit you’re just trying to make money through fear.

Ron A. Rhoades

Ron A. Rhoades

May 20, 2014 — 12:51 PM

Whether the topic of an academic paper is a new investment strategy or an issue involving basic science, I always wait until many peer-reviewed papers are released which test, and support, the insights offered. Such tests should involve out-of-sample data, in order to avoid the possibility of data mining. Different causes (or factors) should be looked at, to explain the data. I hope that the citation by anyone of a single “peer-reviewed study” (unpublished) is not taken as proof of anything. Rather, I hope that my colleagues will, as I have, examine the body of scientific / academic research available, before reaching a conclusion. If we don’t trust this process of scientific inquiry – whether it be relating to investment strategy or issues of natural science – what are we left with? Anecdotal evidence? Hyperbole? I hope the discussion here, should it occur, can be both substantive and respectful, not only of the issue of man-made global climate change, but also whether those who are professionals should seek to let their opinions be known to their political leaders. Thank you.



May 20, 2014 — 12:53 PM

Wow Conservative Republican here. So lets take your points one by one
“We’ve seen an unprecedented string of years with near record-level global average high temperatures” – Okay you are correct that in the last LONG TIME we have seen this. However I would suggest the following, first in climate this is not unprecedented, second it is not damaging ( well to some things it is to others it is a boon, in all things there is a give an a take ). So does CO2 increase temperature. The answer is yes at least the physics of it are sound. Is it something to be WORRIED about. The answer is… Maybe. But based on all of the research out there versus what has ACTUALLY happened, not really. I mean if it really was something to be worried about we would be building nuclear reactors which are pretty safe for what you get and going hog wild on them to provide predictable power.

Look I have been looking into Climate Science for a little over 20 years now. I have gone from alarmed, to Worried to actually happy about it occurring as I have really come to understand just how limited CO2 can be as far as the amount of Warming it can assist with.

Talking points… Ummm… the reason you bring up those talking points is because they are valid. For instance, The world, even with lower CO2 levels in the last 12,000 years has been warmer than it is NOW. How is that not a valid talking point? Or for instance The world even with MORE CO2 has been much colder than now? Argh the fact that people like yourself ignore these talking points and simply say. But the warming is unprecedented. No it isn’t. The real issue is that EXCEPT for the amount of CO2 in the atmosphere which physics suggest must absorb on a narrow spectrum of energy and there fore increase the temperature due to the conversation of energy which is then radiated back into space, there has been nothing else to look at. Even the IPCC will only say that HALF the amount of warming can be attributed to CO2.

I do not really trust what the IPCC puts together. Let me explain. If you had a study done by an oil industry showing that CO2 is a minor issue what credence would you give it? I can tell you I would use it for toilet paper and chuck it out. Why? There is a basic conflict of interest in production of the data. Same with Pharmaceutical companies. However you take what the IPCC says as the truth without questioning it. It is the intergovernmental PANEL on CLIMATE CHANGE!!!

What would happen to this organization if they came out and said that Climate Change was something that was occurring in minor ways that odds were everything was easily manageable and mitigation was not only achievable but the best course of action? That is right, they would lose their jobs. Why because there would be no point to have them. I read the IPCC reports with a great deal of eye rolling. There is good science in it, more than anything it is the political portion that makes me want to yack.

Look based on everything I have read, over the last 20+ years I simply am not concerned about 'Climate Change’ I actually see it as a boon to mankind so long as it does not go too far. I would be much more worried if we were going the other direction. Which with the sun, and the climate in general is VERY possible to have happen.

Here let me put it to you this way. I believe that there is a good chance as we pump more and more CO2 into the atmosphere that three things will occur. First the temperature of the world will become MORE stable. This is a GREAT thing. I base this on the fact that CO2 absorbs a narrow band of energy and radiates it out at a predictable rate. That due to the increase of CO2 and a little bit due to temperature increase, for the most part we will have more predictable crop growth and yields. Finally that the world being warmer versus colder means life will flourish for longer seasons than it used to.

I HOPE that climate change in some small part is 'real’ because the truth is that we could better stabilize the planets ability to give life to us. Now if the whole feedback loop which was hypothesized and I have seen no evidence of being real actually occurs then that is a different matter. But to date the temperature increase appears to only be due to CO2 increase which would mean that I am indifferent to the increase as the amount of CO2 added will not cause 'runaway’ global warming. Will it cause an increase? sure, will it be horrible. No.

I would suggest you have an almost religious fervor in regards to the science. That you are more interested in headlines and ridicule than you are to understanding the science. I am a Conservative Republican. I do not believe what I want to believe because it makes me feel good ( dear lord I would much rather hob nob with the cool kids and have the actors and actresses that are liberal democrats like me, I would love if the media would fawn over me like they do Mr. Obama, and for goodness sake I would love for articles like this one that seem so superior in 'knowledge’ and 'understanding’ be about my point of view. How great would that be ) rather I am it because I see it as a method of reasoning that allows me to produce and succeed in life. I know you see things differently to which I am happy to discuss them with you.

Additionally I would suggest that both sides are fairly dogmatic in their responses. This is due to different understandings of base belief. If you have a different base understanding then your tenets for action will be diverse as well. Anyway I mean to go point by point but in the end you really only had one point. republicans are stupid. Great got it, we can’t accept science. Joy. This of course is your understanding rather than the truth.

Charles Shaffer

Charles Shaffer

May 20, 2014 — 1:30 PM

The reasons that republicans, or “conservatives, deny man is causing climate change are pretty clear. One, the GOP is the party of big business and carbon fuels are big business. Two, since Reagan embraced the religious right back in the 80s, the GOP has become more and more evangelical. Evangelicals not only believe in end times, they welcome them. The end times are when they get to see all those kids who made fun of them in school get theirs. It is part of their anti-science mindset that the GOP has been drawn into. All of this is meaningless though. We have always had an alternative to carbon fuels. Thorium reactors have been a proven concept since the 60s when they ran one at Oak Ridge. Thorium is less radioactive than Uranium (half life of 100 years). The reactors will not melt down so there would be no accidents and there is no need for containment domes. It is cheap and plentiful. We have enough in the US to last for many generations. Thorium was always the appropriate choice for civilian power generation. The only reason Uranium was selected was because it produces weapons grade fuels (Thorium reactors don’t). But we continue plodding along, ignoring the obvious. The status quo is so entrenched that we, apparently, can’t change to save our lives.

W Busenkell

W Busenkell

May 20, 2014 — 2:40 PM

Forrest, while your response is better laid out than James (who seems to have the more typical response) and would have been more powerful had you left out the second to last paragraph, but I think you missed the point. This is about making sound financial decisions for the future, and that can not be done without coming to terms with the fact that the planet is warming, more than likely due to human influence. You do not seem to disagree with that, so perhaps it is just a matter of how you would invest. I would not recommend beachfront property in Florida but rather put money towards solar and wind or energy storage solutions, but maybe you would invest in the positive side of warming with vineyards and olive oil in England. If cities and countries are preparing for sea level rise then there are opportunities to be had in construction industries. However, to sit back and call foul, conspiracy, or evil liberal plot to take down capitalism, to deny the objective science without your own due diligence, will end in missed opportunities for you – and for those who you advise.

If warming does continue, the US does not fare well in that scenario. Warmer waterless West, shifting less productive agriculture in the Midwest, and I am not sure what exactly is planned for the East/South, but most industry has been built on what was, not what will be. So, we need to plan financially for those changes. The short term should focus on increased efficiency of energy and transportation sectors. Very little is lost with more efficient use of resources, and has the added benefit of less pollution (water, air, or land). The cost is perhaps less immediate profit, but the gain is longer term revenue.

With change comes opportunity, but only if you acknowledge that change is occurring and look to where it is headed. If we are not prepared, then we will be left behind. I would like the US to become a leader again, not just in military might, but in the future industries of energy production, sustainable agriculture and water use, efficient design, and scientific discovery. Hard to achieve in the current climate – politically speaking (pun intended).

Ned Flanders

Ned Flanders

May 20, 2014 — 4:36 PM

I question what this has to do with RIA’s as opposed to a political soapbox, but here is my take: Start with a false (or at best scientifically unproven) premise that Global Warming / Climate Change / Climate Disruption is real (they have to keep changing the name to make it more vague and sound scarier). Tap into the fear and emptiness of people who, without a cause larger than themselves, decide that the earth/environment is their religion (who could argue with saving the planet?). Call anyone who uses the scientific method to question the validity of the science a “denier”, which again reinforces the false premise. Tap into the ignorance of people who are willing to risk wrecking our economy and way of life by allowing a central government authority to decide what kind of energy we can use and how much, in the name of “saving the planet”. I fear that people who in well-meaning earnest clamor that we should accept this as proven enviro-religious dogma opens the door to a government solution to an unproven problem, which means more government control by people who interested in the environment only in how it can assist them in creating a state-controlled energy industry (just like they manufactured a crisis with Healthcare to take over 1/6 of our GDP). We should make damn sure the science is there (and not created by self-interested “scientists” looking for grant money) before we hand over control to a bunch of bureaucrats that couldn’t manage a lemonade stand (see Obamacare). Peace. Out.



May 20, 2014 — 4:47 PM

The “Climate Change” debate is about control; it’s about turning the guns of government on rivals and making a healthy profit while claiming altruistic intentions. There is no actual (existing) evidence of warming or cooling for the past 17 years and independent scientists cannot peer-review these “reports” because the “data” on which they are based was “deleted to make room”. The mundane “socialists” hope to use “climate change” to punish the wealthy while the wealthy “socialists” (like Al Gore) see it as a great opportunity to sell fear and make some profit. Want to know a secret?...even if it’s true that the globe is warming and it’s an impending catastrophe – the United States Government is the absolute worst steward one could imagine putting in charge of correcting it because it is the biggest polluter on the planet and it will continue to be…how could giving unaccountable politicians billions more dollars do anything but make them even more rich?

Brian Schreiner

Brian Schreiner

May 20, 2014 — 5:37 PM

Not so fast, Ron! The complexity and uncertainty around climate science is vast. Anyone who says otherwise either hasn’t studied the issue carefully enough or is promoting a political agenda. To understand what makes climate science so complex and uncertain, listen (or read) Judith Curry of the Georgia Institute of Technology and blogger at Climate Etc. Here is a great interview she did recently with Russ Roberts of EconTalk.org: http://www.econtalk.org/archives/2013/12/judith_curry_on.html – Thanks, Brian Schreiner, Schreiner Capital Management, Inc. www.calculated-success.com

Jeffrey McClure

Jeffrey McClure

May 20, 2014 — 6:31 PM

I too have read, and read, and read on this issue. More, I have gone out and looked, not just at what is and was recently, but at historical records that reveal what the environment was like a hundred years, a thousand years, and several thousand years ago.

First, climate change is happening. To suggest otherwise is to be a dedicated luddite with ones head buried deep in the sand, or some other dark place. When I was in the Army, four decades ago, when we deployed to and from Europe in early autumn the northern polar regions were solid ice, and blindingly bright as we crossed them. Now, at that same time of year what one sees out the airplane window is mostly blue water. A hundred years ago, there were farms, towns, and villages in the Big Bend, Texas area where vegetables and crops were grown each year without irrigation. Today those areas are gravel deserts. When Charles Dickens was alive, there was typically several inches of snow on the ground in London at Christmas. Now it is exceptional to have snow at any time. When Currier and Ives made their prints, they illustrated ponds in New England where horse-drawn sleighs were common on the ice. Those ponds in the 21st century do not normally freeze over, and when they do, the ice is at most quite thin. Climate change is happening.

Going back a bit further, during the time of the Roman empire, North Africa was the bread basket of the empire. Carthage was on a verdant plain covered with grain crops and not at all in need of irrigation. Today it is a desert. The barbarians who sacked Rome came in the winter because the Danube and Rhein rivers froze over each winter to a depth of several feet. They simply do not freeze today. Global warming is real.

Now, how much of the accelerating global warming is caused by us humans? That is debatable. What I can say though is that on top of Mona Loa in Hawaii there is a CO2 detector that has been there for about half a century. During that time the air crossing at that high altitude has had an ever increasing percentage of CO2. CO2 does block infrared reflective radiation and thereby trap it at lower altitudes. If I place a reflector in front of a radiating body, denying that the radiation becomes more concentrated on the reflecting side is silly.

Whether we can make a significant difference in this issue is also questionable. I just read that it would only cost about $44 trillion to stabilize the CO2 level… and that was just in the United States and Europe. We spewed massive amounts of air and water pollution into the environment in our industrial revolution and now that we are post industrial, we howl that the Chinese and Indians are doing the same thing. Note here that we drive “eco-friendly” hybrid cars, but the batteries, and the materials in those cars is made generally in China. The overall carbon “footprint” of a Civic and a Prius is almost identical (the Civic is smaller), but the mass of that carbon footprint is generated by Chinese manufacturing plants, so we pat ourselves on the back whilst at the same time cursing the polluting Chinese. That is not a very sensible approach.

What is rock-solid real is that the sea levels are rising and the rainfall patterns are shifting pretty much as the climatologists warned they would. Florida will be mostly underwater in the not too far distant future. New Orleans and a host of other coastal cities will either be on platforms above the water or simply will not be. Barrier islands are going to be submerged and/or move inland. Hurricanes will be more severe, as will tornado generating thunderstorms. Ironically, winters in northern North America will likely be more severe and Northern and Central Europe may become very unpleasant places as massive snowfall and blizzards become routine. Leave a lot of water open as winter closes in over the Arctic, and a lot more water vapor is released into those polar cold fronts. More water in a cold mass of air equals more snow when it finally gets over land and encounters warmer air.

The only question is “when?” That is in fact an open question, but so far things are happening faster than the early published papers predicted. It is well within two standard deviations that we would see ocean levels up by several feet in just a few decades. Take a long, hard look at what that means. Don’t build houses or businesses in flood plains, or even near them.

There is nothing theoretical about anything I just wrote. Those are the facts. Plan accordingly.

Ken Weber

Ken Weber

May 20, 2014 — 6:48 PM

Bravo, Brooke, for goading Ron Rhodes to write this important column. That could not have been an easy decision. Perhaps you can get others in our investment community to follow your lead.
And a big thumbs up to Ron for his carefully considered take on this controversial topic.

Da Vinci

Da Vinci

May 20, 2014 — 6:51 PM

Beware anyone who suggests or – gasp – declares that science is settled. This is the domain of hacks, politicians, and hucksters. No self-respecting scientist would utter those words.

It is utterly disturbing and revealing how many have, in fact, resorted to this line of “argument” – the science is settled. While Mr. Rhoades is certainly entitled to his opinion, and his colorful view of politics, his suggestion of the irrefutable evidence of science is telling.

Consensus is for PTA meetings and coitus.

RIABiz would best heed the advice of Sammy Kershaw, and avoid Politics, Religion, and Her.



May 20, 2014 — 7:14 PM

I’m sorry… Please forgive me if I’ve been too busy shivering here in the Midwest in the midst of one of the region’s coldest years ever with near record amounts of rain and snowfall to notice the latest tiresome round of apocalyptic “man-made-global-warming” hysteria.

Seriously, Ron and Brooke, what I find far more appalling and alarming, aside from your decision to use RIABiz as a platform to solicit progressive political activism, is how you’ve unbelievably chosen to either conveniently overlook or flat-out ignore the Climategate scandal which has rocked the global warming doomsayer community over the past five years… Yes, I’m talking about the one in which a bunch of leaked e-mails revealed how UN global scientists were blatantly and deliberately colluding with one another to fudge and manipulate data so that critics couldn’t use it to discredit and debunk the existence of man made global warming! Imagine that… you have a movement (the core of which is home to left-wingers, Marxists, and anti-capitalists) resorting to spreading fear and lies to advance its agenda by persuading gullible good folks like yourselves to feel so guilty about your lifestyle to the point where you become all too willing to surrender your personal freedoms and autonomy to a centrally-planned new world order.

Sorry, no sale here.

However, I’ll allow for the possibility that you may simply be misinformed about Climategate, one of the greatest scandals of our time, given that much of the “mainstream” media has elected not to cover this inconvenient truth since it doesn’t suit their own ideologically-driven agenda. So please allow me help bring you up to speed here with a few articles for your reference (you can also Google “fudged data global warming” for more):

“Climate Change: This Is the Worst Scientific Scandal of Our Generation” (11/28/09):

“Climategate 2.0: New E-mails Rock the Global Warming Debate” (11/23/11):

“Again! Massive Fudging on Global Warming Temps”(1/27/14):

Mister RIA

Mister RIA

May 20, 2014 — 7:58 PM

Socialism masquerading as environmentalism. Aussies To Slash 90% Of Global Warming Funding From Budget http://dailycaller.com/2014/05/19/aussies-to-slash-90-of-global-warming-funding-from-budget/

Ron Rhoades

Ron Rhoades

May 20, 2014 — 8:26 PM

Please permit me to reply.

Science, by definition, is inherently connected to knowledge and facts. We rely on science to expand our understanding of the world around us. I am not saying that science should not be challenged – any preliminary observations of science can and should be. Yet, in the face of compelling scientific evidence, from thousands and thousands of researchers across the globe, we still often reject information based on our personal bias.

Why is this so? In an article by Erza Klein in Vox on April 6, 2014, “How politics makes us stupid,” she wrote: “In April and May of 2013, Yale Law professor Dan Kahan — working with coauthors Ellen Peters, Erica Cantrell Dawson, and Paul Slovic — set out to test a question that continuously puzzles scientists: why isn’t good evidence more effective in resolving political debates? For instance, why doesn’t the mounting proof that climate change is a real threat persuade more skeptics? ... Kahan and his team had an alternative hypothesis. Perhaps people aren’t held back by a lack of knowledge. After all, they don’t typically doubt the findings of oceanographers or the existence of other galaxies. Perhaps there are some kinds of debates where people don’t want to find the right answer so much as they want to win the argument. Perhaps humans reason for purposes other than finding the truth — purposes like increasing their standing in their community, or ensuring they don’t piss off the leaders of their tribe. If this hypothesis proved true, then a smarter, better-educated citizenry wouldn’t put an end to these disagreements. It would just mean the participants are better equipped to argue for their own side … In another study, he tested people’s scientific literacy alongside their ideology and then asked about the risks posed by climate change. If the problem was truly that people needed to know more about science to fully appreciate the dangers of a warming climate, then their concern should’ve risen alongside their knowledge. But here, too, the opposite was true: among people who were already skeptical of climate change, scientific literacy made them more skeptical of climate change … most of the time, people are perfectly capable of being convinced by the best evidence. There’s a lot of disagreement about climate change and gun control, for instance, but almost none over whether antibiotics work, or whether the H1N1 flu is a problem, or whether heavy drinking impairs people’s ability to drive. Rather, our reasoning becomes rationalizing when we’re dealing with questions where the answers could threaten our tribe — or at least our social standing in our tribe. And in those cases, Kahan says, we’re being perfectly sensible when we fool ourselves.”

For the full article, please visit: http://www.vox.com/2014/4/6/5556462/brain-dead-how-politics-makes-us-stupid.

This article is an experiment in and of itself, in my view. Should major issues of the day (not just political ones, but those which affect the future of our economy in hugely significant ways) be the subject of discussion by and among investment advisers? Do editors and writers have a duty to explore these issues, or should we just confine ourselves to the traditional issues which more directly affect the investment adviser industry and/or our clients? This is an open issue, in my view.

Lastly, I have already been accused of “being interested in headlines” and “religious fervor.” I desire neither. Those who know me are well aware that I enjoy my life as an academic, don’t intend to run for office, nor do I even desire to grow my own small RIA firm. Nor am I paid to write this occasional column. I regard myself as a political moderate. And, as I try to instruct my students, I try to avoid argument by means of anecdote.

But I do care. About the future of the investment advisory and financial planning professions. About the issues which affect the economic future of our country, and the financial futures of my children and grandchildren. For these reasons I agreed to write this article, and for no other.

In the field of risk management we analyze risks based upon loss exposures. We question the probability of the loss occurring (“loss frequency,” in essence), and we also look at the probable size of the losses which may occur (loss severity). In examining the evidence, I have reached the conclusion that catastrophic losses, on a scale never before seen in human history, are highly probable. Even if the probabilty of loss was far less, the severity of loss still warrants our close attention. Even then we should be planning to avoid or prevent (unlikely, at this point) the loss from occurring, mitigate its severity, or plan for its consequences. And, as I tried to point out in my article, developments in the cost effectiveness of renewable energy solutions can propel us down a future path which is economically viable. This search to weigh the probability and severity of risk, and an examination of alternative paths to avoid/mitigate the risk, is just following the fundamental principles of risk management – nothing less, nothing more.

I hope that this dialogue can continue. This is an important issue of our time. And I hope, in the process, that we can all examine our own decision-making processes, and – through self-reflection – examine our innate biases, our tendency to rationalize, and our own conclusions.

Despite my own conclusions on this issue, I will continue to keep an open mind – and self-reflect. I look forward to watching the video in the link set forth by Brian Schreiner, for example. I look forward to reading more scientific research as it comes out on this issue.

In fact, I truly hope that my conclusions regarding the fact of man-induced global climate change (and those of so many thousands of scientists), and its present and potential effects, are proven wrong. That would be a truly wonderful outcome.

Da Vinci

Da Vinci

May 20, 2014 — 8:38 PM

Ron, supporting your claim with Ezra Klein is the equivalent of supporting portable alpha strategies because David Letterman mentioned it in a monologue.

Would you run your RIA with modern portfolio theory if half the industry thought its fundamental premise was not only bunk, but made up and fraudulent? Your passion aside, “science” would call for investigation. Rubber meets the road.

One can hope and wish and pray all they like. If “thousands of scientists” repeatedly hide their evidence from the great unwashed, I’m more amazed that you would find it hard to believe people don’t trust a word out of their mouths.

These guys could be discovering gravity – but all us simpletons know is we’re being lied to, manipulated, and that there are also “thousands of scientists” that laugh at the total lack of humility in understanding how the climate works. It’s profiteering, and control of others, no less. Some do it through science, others through government. But all do it through strong arming manipulation.

The real story here is your astonishment that people don’t buy what’s being sold.



May 20, 2014 — 8:51 PM

“In fact, I truly hope that my conclusions regarding the fact of man-induced global climate change (and those of so many thousands of scientists), and its present and potential effects, are proven wrong. That would be a truly wonderful outcome.”


Well, the links to some articles I provided in my previous post might be a promising start, Ron. Have you read any of them yet? Why are you and others here who believe in man-made global climate change remaining so conspicously silent on the Climategate scandal of the past five years?

Roger Streit

Roger Streit

May 20, 2014 — 9:10 PM

It saddens me that climate change is so politicized. This space is not adequate to convince anyone of the science. Debating that question here is likely to just get people upset. As you say, talking points are not going to get us anywhere. But for those people who think that we are taking too much risk and possibly endangering our children’s future, there is a group that you should know about. Citizens’ Climate Lobby (CCL) is a grassroots, nonpartisan group creating the political will for a stable climate.

We meet with members of Congress and other thought leaders. We write letters to the editor and get editorials and op-eds published. The focus is on passing a revenue-neutral carbon tax (RNCT), which will speed the transition from fossil fuels to clean technology. This is an approach that conservatives can embrace. If you study it carefully, and do not dismiss it out of hand, you may find that this market-based approach answers some of your concerns about: big government, China, economic growth, etc. A RNCT does not involve picking winners, just a price on carbon that reflects the true costs of its retrieval and combustion.

A revenue-neutral carbon tax is actually a conservative idea, and many economists (liberal and conservative) endorse it. Former Secretary of State George Shultz is on CCL’s Advisory Board. So is former Congressman Bob Inglis, who is a Republican.

CCL volunteers are informed and inspired. Our growth has been impressive. Citizens’ Climate Lobby started 2013 with 74 chapters in the U.S. and Canada. We now have more than 180 chapters, including new ones in Sweden, Bangladesh and India.


I welcome corresponding with people who have an open mind regarding this issue. I hope I do not get attacked, because I have come to a different conclusion regarding this very important issue.

Brooke Southall

Brooke Southall

May 20, 2014 — 10:30 PM

To my critics:

There is an enormous burden of scientific proof that falls on deniers and agreers of human-made climate change. People espousing the theory … well, you brought it up, so prove it. It’s a sort of innocent til proven guilty argument.

On the other side are people who say that the circumstantial evidence is strong enough that we should keep Willie Horton in jail until we can give him a proper trial. Yes, he’s still technically innocent but maybe a keen judge will see fit to set his bail high enough that he sits safely in a cell until that trial.

Considering the matter that hangs in the balance, I choose to err on the side of those who want to confront global warming and human-emitted carbon as one and the same. The costs of doing that seem like cheap insurance relative to the cost of being on the wrong side as a denier.

Here is a local (to me) scientist whose mind-change made an impact on me: http://www.nytimes.com/2012/07/30/opinion/the-conversion-of-a-climate-change-skeptic.html?pagewanted=all&_r=0

Chris Scheller

Chris Scheller

May 20, 2014 — 10:53 PM

Whoever this Ron Rhoads is, one thing for sure is that he is at best uninformed. At worst a moron.

Brooke Southall

Brooke Southall

May 20, 2014 — 11:16 PM


I was about to delete your comment. Maybe I should because I don’t think it adds anything to the discourse and in fact casts a chill, which presumably was your intent.

But then I noticed tha you did one thing that I admire — which was to put your name to the remark. If you want to have an ad hominem attack represent your full say on this matter, I suppose that is your prerogative.


Ron Rhoades

Ron Rhoades

May 20, 2014 — 11:48 PM

Please bear with me, as I answer the Climategate-fueled skeptic and explain the fallacy of argument by anecdote.

In terms of scientific inquiry, I follow the rationale espoused by Robert Merton man decades ago – i.e., that any conclusions born from scientific research be subjected to organized skepticism. “Organized skepticism” simply means that all research is checked by rigorous, structured scrutiny of peers.

Whenever there exists scientific controversy of a very public nature, it is not unusual to find scientists who act more like passionate lawyers in a trial, more concerned with building a convincing case than they are in seeking the ultimate truth. This was the fault of the three scientists who appear to have participated in what is now known as “Climategate.” I believe the actions of these scientists were indefensible. It shows us that scientists are humans, subject to the same failings and biases which infect us all.

It also shows us that the rigorous scrutiny of peers can serve to uncover biased research, when it does occur.

Yet the existence of Climategate is but an anecdote. As I instruct my students, anecdotal evidence is present when premises are based on a single experience, or a set of experiences. Anecdotal evidence is little evidence at all; the evidence is too slight to form the rational basis for a conclusion through inductive reasoning. This is not to say that anecdotal evidence has zero value; such evidence, in combination with a great deal more evidence, can lead to the basis for rational inferences to occur.

Similarly, isolated instances of observed climate change, such as the increased duration and severity of wildfires in California, the drought in Texas and much of the U.S. southwest, are but anecdotal evidence as well. Alone they prove nothing. Only when many hundreds of observations occur, and other causes for the changes are ruled out, do such isolated instances form part of a larger picture and lead to inferences which are worthy of contribution to the scientific discourse.

Again, a singular anecdote (or even a few) of scientific misconduct does not mean that all science is biased and incorrect. It has been implied that “since a few scientists cheated on their data, hence all scientific data is not to be believed.” This seems to be source of the great “conspiracy” theories of the day.

Climategate is an outrageous incident involving unjustifiable conduct by a few scientists. But it is only a single experience, or a few experiences. This anecdote does not represents anything at all. It neither proves or disproves the central issue of the scientific inquiry. Rather, Climategate fails to be considered in reasoned debate, because it proves nothing. In this sense, it is a kind of fallacy of relevance.

The strong warming trend that was observed in the 20th century was reported by a Climategate scientist, and his work (and data set) has since been discredited. But the misrepresentations made do not mean that the warming trend did not occur. The fact that this scientist misrepresented or falsified his data renders that data set meaningless. But the fact of the misrepresentation does not prove that all data on the temperature record is, therefore, misleading. Nor does it support the greater generalization that all climate change scientists are wrong or that they are part of some great conspiracy.

Instead, we must look to other, independent sources for a reconstruction of the temperature record. As one example, the Berkeley Earth Surface Temperature (BEST) Analysis was released in 2012. In summary the analysis shows that the rise in average world land temperature globe is approximately 1.5 degrees C in the past 250 years, and about 0.9 degrees in the past 50 years. Moreover, the report indicates that the upward trend is likely to be an indication of anthropogenic (man-made) changes, while short-term spikes in temperature were seen to be the result of volcanoes.

Note, as well, that Berkeley Earth team made its results public, together with the analysis programs and data set in order to invite additional scrutiny as part of the peer review process. The BEST study was published in a peer-reviewed journal in early 2013.

But, as I stated in the article, one scientific study, alone, does not prove that anthropogenic climate change has occurred and is occurring. But it is not just one paper. There exists thousands of academic papers which have taken a position on the issue of climate change. And there is overwhelming scientific evidence that man-made climate change has occurred, and will continue to occur.

There exists a misperception among many Americans regarding this scientific consensus about human-caused climate change. As I surmise, I believe this misperceptions are largely the result of political leaders who live in a state of denial, and the media which feeds upon their statements. As a result, Americans are far less likely than citizens in other developed countries of the world to believe that climate change is happening, human-caused, will have serious consequences, and is solvable (i.e., can be mitigated through concerted action).

I am inherently suspicious of government intervention in markets and societies. The appeal by those interests who continue to oppose the scientific consensus should appeal to me. But it does not. For I recognize that the risks posed by anthropogenic climate change are too great. I choose to look through the arguments, usually posed by vested business interests, and examine the entirety of the science. After such analysis, I choose to believe that scientific consensus has occurred, and that it is time for us to act on that consensus.

But first, we must extricate politics from the debate. We must convince our political leaders that the issue of whether anthropogenic climate change is occurring is no longer doubted. We must move forward to discuss in a serious conversation about how to manage the risks of climate change.

And, unlike the situation which occurred at the time of the 1997 Kyoto Accord, the tremendous progress made in the recent decade in the efficiency of renewable energy technologies provide us with the opportunity to shift our nation’s energy policies to foster not only a substantial reduction in carbon emissions but also lower-cost energy solutions. Indeed, several energy purchase agreements have taken place in just the past year in which utilities purchased renewable-energy-generated power for less than the cost of energy that could be produced by nuclear energy, natural gas, and even coal. As continued improvements in the efficiencies of wind power and solar PV power occur over the next several years, such technologies will likely be the low-cost solution which utilities voluntarily turn to, and without the aid of any federal or state tax credits.

I cannot, in these comments, set forth all of the evidence on global climate change. Nor can I set forth herein all of the huge economic costs which will likely occur absent the achievement of global consensus on prudent measures which can and should be undertaken to mitigate global warming.

But I can ask that you re-consider the scientific evidence. And, then, I hope, undertake action as Roger Streit in his comment suggests. Or some other action designed to change the political discourse from “whether this is a problem” to “what should we do?”

Kevin Condon

Kevin Condon

May 21, 2014 — 1:26 AM

Thanks for a thorough article and great Q & A, Ron. My background, unlike many, included graduate study in climatology (Department of Geography and Meteorology, Kansas), and I was in grad school when the Club of Rome proposed global cooling with lots of modeling. They were wrong. They created in me a skeptic. I agree that there is climate change and understand the greenhouse effect, but I also believe the climate is waaaay too complicated for any of the models to be trusted. Climate change has been a government prod for years. Arbor Day was created because scientists were sure that “rain” came with forests early in our settlement history. So, I’m OK with careful observation and am fully behind energy efficiency and good stewardship. But, I’ll sit out the panic. I dislike the political and “scientific” distortions in an Inconvenient Truth. I don’t believe in settled science. I will not participate in large scale, political environmental programs that hurt the poor and lower income people in order to appease those who think they are superior because they can read computer simulations. The rate of change is not so rapid or certain and our adaptability is not factored in correctly. Change is constant and will continue. Let’s work with it intelligently.

Steve Smith

Steve Smith

May 21, 2014 — 1:45 AM


Seems to me the question for an RIA is less what political action should be taken than what portfolio action should be taken. Would you as an otherwise committed believer in thorough diversification recommend fossil fuel divestment to your clients?



May 21, 2014 — 2:59 AM

As a customer, regarding global warming – Recently I have wanted to know more about these things.

Asset loss potential: What is there a return reduction for the risk reduction when betting against fossil fuel?

FTSE and Blackrock think there is a downside risk to fossil fuel investment because of the potential for stranded assets. These companies got where they are today by paying attention to the evidence.

Over time if more people believe global warming is a problem then there is a risk that the powers-that-be will make companies leave fossil fuels in the ground. That strips the fossil fuel industry of assets. And there is a shift underway in public thinking. http://www.gallup.com/poll/161645/americans-concerns-global-warming-rise.aspx

Impacts for insurers:
Ceres indicates there may be impacts to profits down the road for insurers due to global warming.

Full disclosure – My perspective on global warming
I work in the power industry and we estimate the impact of global warming for load and generation. We look at these impacts for long term planning purposes. We can’t ignore them. When a glacier loses mass, it means there is more power now and less hydro power for the future. When less precipitation falls as snow and comes instead as rain, it changes the timing of inflows to a run-of-the-river generator. Warming reduces load in the winter and increases it in summer. We watch. The impacts are slow and small but there is a trend.

W Busenkell

W Busenkell

May 21, 2014 — 2:11 PM


I respect the reason and quality of your skepticism, it is healthy. I agree with your post, I am not hitting the panic button either. However, to bring in things like Club of Rome, and the models were wrong in the 1970’s so we can’t really trust models – I find a bit troublesome. We have come a very long way in data collection and computer modeling ability. I am sure the computer you typed your post on is more powerful than anything we had in the ’70’s. The number and quality of satellites dedicated to studying Earth systems(8 by 1979; over 40 since then) has added greatly to our understanding, coupled with the ever-increasing computing power, and I think our models are pretty good, and improving. There is still the human component however. Models can only use the data we input, and ultimately humans have to decide what final interpretation to present to the general public, and how to present it. That is where the individuals need to start looking more closely at the studies/data themselves to avoid the political or other agendas and make their own informed decisions.



May 23, 2014 — 2:36 PM

Gotta ask – regardless of one’s position on the topic, what the heck does this have to do with our businesses? Can we keep the social proselytizing to other more appropriate channels? What’s next – a pro-life/pro-choice debate? Come on…

Brooke Southall

Brooke Southall

May 23, 2014 — 4:57 PM


I think that’s a fair question in the context of climate change as one of a dizzying array of polarizing political issues. It’s a question that came up before the article was written and we sallied forth with some trepidation. It is certainly a political issue. I’m not sure it should be. I think global warming bears on wealth like perhaps no other issue. RIAs are nothing if not trying to push forward the idea of 'wealth’ as a concept. I think the more 'held away’ assets an RIA can encompass in the discussion they have with clients the more valuable they are and the richer their professional experience.

I’d add that it is 'good business’ in general to think about this issue, painful as it may be. Top executives at companies like Apple, Virgin Airlines and Goldman Sachs are taking the issue head on.

It might be a bit much, for now, to ask RIAs to proselytize, as you say, on the issue. I’m not sure it’s out of school to bring up the topic when carbon-producing activities come into conversation. Taking a page from your diplomatic approach to your comment here, I might be inclined to say to a client contemplating purchase of motor yacht, as an extreme example, to say: Depending on how you feel about how carbon in the atmosphere, those boats are known to really as carbon emitters. If you know somebody has green leanings, I think you can come on stronger. Based on the growing interest in socially responsible investing, I’m guessing there are plenty of clients who would welcome having an advisor who doesn’t see the potential bulldozer of rising seas and frazzled wheat fields coming their way as a straight political issue.

thanks for asking,


Peter Bryn

Peter Bryn

May 24, 2014 — 4:04 PM

First, before anything else, kudos to anyone in any tribe with any belief for having the guts to stand before a crowd and deliver his/her belief knowing it wont be popular.

Second, I’m not a climate scientist, as I trust most folks out here aren’t, so I don’t argue the science. However, I am a fiscally-conservative engineer in the oil/gas industry. And among the voices I trust on this topic are that of my employer, who says:

“Rising greenhouse-gas emissions pose significant risks to society and ecosystems. Since most of these emissions are energy-related, any integrated approach to meeting the world’s growing energy needs over the coming decades must incorporate strategies to address the risk of climate change.”

...and I can see the replies now, “But ExxonMobil is a well-known left-leaning, enviro-terrorist organization hell bent on killing the fossil fuel industry!”

Roger Streit

Roger Streit

May 24, 2014 — 4:37 PM

I, too, am not a climate scientist. I am a conservative financial planner, who believes in taking seriously the risk of possible catastrophic events. Clients don’t want to think about the chance of needing to go into a nursing home. I nudge them to address this issue in a sensible, cost-effective way. IMO, denying this issue is not a viable strategy.

I also believe in free market solutions, whenever possible. Regulation should be a last resort. The GOP is making a serious mistake, in my opinion, if they remain aloof from discussing market-based solutions to the risks of climate change.

Checking out ExxonMobil’s web site, I found this:

“Throughout the world, policymakers are considering a variety of legislative and regulatory options to influence technology development and consumer choice to affect GHG emissions. If policymakers do move to impose a cost on carbon, we believe that a carbon tax would be a more effective policy option to reduce greenhouse-gas emissions than alternatives such as cap-and-trade. And to ensure revenues raised from such a tax are indeed directed to investment, and to assist those on lower incomes who spend a higher proportion of their income on energy, a carbon tax should be offset by tax reductions in other areas to become revenue neutral for government. It is rare that a business lends its support to new taxes. But in this case, given the risk-management challenges we face and the policy alternatives under consideration, it is our judgment that a carbon tax is a preferred course of public policy action versus cap and trade approaches.”

Citizens’ Climate Lobby has a similar approach: http://citizensclimatelobby.org/carbon-tax/:

Justin Haskin

Justin Haskin

May 27, 2014 — 6:31 PM

Brooke, you stated, “It’s a question that came up before the article was written and we sallied forth with some trepidation. It is certainly a political issue. I’m not sure it should be.”

You made a previous post with distinct use of the term “deniers”, and even referenced Willie Horton to drive home your point.

You certainly are free to your beliefs, and even more so in your role here. You should know combining the power of the term “denier” with a belief that man-made global warming shouldn’t be a political issue gives a great many people tremendous pause.

I equate the theme of these two comments as approaching the cusp of totalitarianism. Perhaps the benign, “good for you” type, but all the same…. Certainly nothing that resembles freedom. You state “RIAs are nothing if not trying to push forward the idea of 'wealth’ as a concept.” I would counter that RIAs are nothing if not beacons of liberty.

Keep that in mind – we are a free people, littered with grievous histories of total power run devastatingly wrong. Even using the word “denier” in any context outside of the Holocaust is probably ill-advised, frankly. But, it’s a free country. Do as you like.

Roger Streit

Roger Streit

June 12, 2014 — 9:11 PM

Recent articles/op-eds:

Polling Data Swinging Against Climate Denial

New economic study shows carbon tax refunded to households would create jobs

Buffett Ready to Double $15 Billion Solar, Wind Bet

Opinion: Destabilization of Earth’s climate system is bringing real impact to N.J. communities.

Obama on Obama on Climate by Thomas Friedman

Ron Rhoades

Ron Rhoades

June 15, 2014 — 8:45 PM

If we can ever move past “whether” man-induced climate change is occurring, and conclude that it is, then we can begin discussing the economics of potential solutions.

We know that significant costs will occur in many countries due to climate change. But we must consider whether the costs of solving the problem of climate change might be even greater. Economists are studying this, and their is a lot of uncertainty in the projections. Some preliminary assessments seem to indicate that “doing nothing” might be far cheaper than “spending to fix the problem.” Yet other economic assessments suggest, with different assumptions, that “doing nothing” is likely to lead to catastrophic economic costs, relative to costs which might occur with reasonable carbon reduction targets. Suffice to say, there is a lot of uncertainty in the projections of future economic costs.

From what I have read, I am not in favor of a carbon tax, as a means of solving the problem of carbon change. It seems to me that the level of a carbon tax, to be effective to reduce carbon-based fuels energy consumption significantly, would have to be quite high. And such a high carbon tax would unlikely be adopted by many countries, thereby providing some countries with an unfair advantage (cheaper energy) in our global competition. This could lead to many distortions, including where global companies decide to locate energy-intensive plants and operations.

Yet, from another standpoint, a carbon tax which targets the all-in costs of carbon emissions seems appropriate. In other words, carbon producers get away with a free license to pollute. However, determining the all-in costs of carbon (and other) pollutants is difficult. And, taxes have a way of never going away, and increasing. Also, there exists the problem, again, of global economic competition distortions if some countries adopt a carbon tax, and others do not. We are far from having any form of “global government” with the ability to enforce a fair carbon tax worldwide, and hence I don’t see a carbon tax as a preferred solution.

Rather, the solution to climate change might lie with innovation. The costs of solar energy and wind energy have significantly declined over the past decade – more so than I ever thought possible. New and promising technologies will further drive price declines. These also include grid-scale battery storage solutions, and developments in auto and mobile device battery solutions. Developments are occurring in materials sciences which promise much cheaper, longer-lasting and lighter battery solutions within the next decade.

We can also hope for safer nuclear fission plants through developments in technology, fuel cell technology deployment (which must include a way to cleanly and cost-effectively produce hydrogen), and even – at some distant future time – nuclear fusion plans. For now it seems as though solar and wind technologies appear more promising, but one never knows where technological breakthroughs will occur which will drive cost reductions in energy production.

I don’t overlook the substantial benefits of energy conservation. In the short term, increased deployment of energy conservation measures in homes and business appear more cost-effective, at a microeconomic level.

Hence, it seems to me that the prudent national, and perhaps global, policy initiative, is to continue to fund research into renewable energy solutions, through our university systems and in collaboration with industry. Perhaps funding of certain research initiatives should be contingent upon open-access to any patents which result (... Way to Go – Tesla!).

The economic solution – lower-cost renewable energy solutions whose development is accelerated by a devotion of global resources to accelerate innovation – is much more likely to succeed than a government-intrusive carbon tax system. If we can further the development of lower-cost renewable or clean energy solutions, this can in turn lead to progress on many different fronts – clean water, food production, global internet deployment, etc.

Peter Fiekowsky

Peter Fiekowsky

June 17, 2014 — 2:08 PM

Here is a radical notion: climate change isn’t the issue. It’s transforming the energy economy. The cost of renewable energy is falling rapidly—even more rapidly than the cost of fossil fuels are increasing. Wind and solar have already reached price parity, without subsidies, in 11 countries, including much of the US. There is a huge investment opportunity which you may or may not want make available to your clients. The buggy-whip investors did not give up easily, and fossil fuel investors won’t either. But those who make money from now on will continue being renewables investors. Have you checked out SolarCity and their competitors?

If making a good return over the next 10 to 20 years also saves the climate, then that’s great. On the other hand, If the deniers are correct, and climate change is a hoax, then the renewables investors will still be the ones making money.

Roger Streit

Roger Streit

June 19, 2014 — 3:50 PM

Ron, I agree that there is uncertainty regarding global warming, but that doing nothing involves significant risks. I maintain that society is not very good at dealing with short term sacrifice to achieve long term goals. We see that in individuals not saving enough for retirement. And politicians may be more interested in getting elected or re-elected, than in their legacy.

We know that the cost of greenhouse gas (GHG) emissions is not reflected in fossil fuel prices. The market cannot respond properly until the external costs of GHG emissions are reflected in the prices we actually pay. That is why many economists believe that “putting a price on carbon” is so important. It simply corrects a market failure.
http://www.realclearpolitics.com/articles/2013/04/08/why_we_support_a_revenue-neutral_carbon_tax_117849.html So the first reason for a carbon tax is to level the playing field, so that we see real costs in market prices.

Frankly we want prices of fossil fuels to go up, just as we want prices to go up when there is a shortage of something. There is a social cost of GHG pollution, and so far it is externalized.

I believe that a carbon tax is the least intrusive option. It does not include government regulation or vast government bureaucracies. It does not pick winners and losers. It allows the market to work.

Citizens’ Climate Lobby (CCL) proposes a gradually increasing carbon tax, so that consumers and producers have time to respond. This also encourages energy efficiency and innovation, things you favor. Since the tax is revenue-neutral, in that all of the revenues are to be returned to American households, the macro effects are negligible. A recent study actually shows positive aspects of this plan. http://www.theguardian.com/environment/climate-consensus-97-per-cent/2014/jun/13/how-revenue-neutral-carbon-tax-creates-jobs-grows-economy In short, we do not have to choose between cleaning up the environment and economic growth.

As for getting the world to go along, three points. We don’t need world government. As Tom Friedman says, “When the United States leads, the world follows.” That may not be a sure bet, but the reverse is definitely true. If we do nothing, it is a sure thing that no one else will lead.

Second, the CCL proposal for a carbon tax includes border adjustments. If another country does not have a carbon tax and it wants to export goods to the United States, it will pay us a tax when the goods arrive at a port of entry. I think a country will respond by imposing their own carbon tax and keeping the revenue rather than pay us. Similarly, US manufacturers will get a carbon tax rebate, when they export to a country without a carbon tax.

Third, world population is expected to grow by 2 billion people in the foreseeable future, many of them wanting our lifestyle. The future entails a hot, crowded world, where green technology will be the 21st century growth industry. US innovation can dominate energy efficiency and renewable energy just as it has dominated microchips, Information Technology, the Internet and social media.

CCL’s revenue-neutral carbon tax is exceptionally well thought out. See http://citizensclimatelobby.org/carbon-tax/
Frankly, I am in favor of whatever has the best chance of being implemented. I think a carbon tax has the best shot, but if cap and trade can be implemented, I’m for that. Third choice is government regulation, because the costs of regulation are hidden. Doing nothing is a distant fourth choice. Some magic innovation may save us, but I view that as wishful thinking, equivalent to planning on winning the lottery to pay for retirement. Which financial planner would advocate that?

Roger Streit

Roger Streit

June 27, 2014 — 6:41 PM

More information, if you are interested.

Risky Business Report Shows Investors Are Ready For Climate Action


And now, with the publication of the Risky Business report, a new powerhouse group of players has entered the arena. The report, which brings together a bipartisan group of three former Treasury Secretaries (Hank Paulson, Robert Rubin and George Schultz), the former mayor of New York Michael Bloomberg and the billionaire investor Thomas Steyer, is a deliberate attempt to depoliticize the issue of climate change, which has become a toxic and highly partisan issue in the US. You might disagree with their conclusions, but you can’t ignore their credentials.

Bob Inglis: The free enterprise case for climate action


The role for the government is being the honest cop on the beat, that brings accountability to all the fuels, that figures out an effective way to say all fuels have to be fully accountable for all of their negative externalities, all of their hidden costs. We think that’s best done by a 100 percent returnable emissions tax, so it is revenue-neutral.

Brooke Southall

Brooke Southall

July 7, 2014 — 6:51 PM


Thank you for continuing to keep this board informed.

I noticed Barry Ritholtz is doing a similar thing on his blog.





October 1, 2014 — 10:18 PM

Well said. The science should not be the political issue, the questions about what to do with it are where the political debates should be occurring.

brooke southall

brooke southall

October 1, 2014 — 10:41 PM

Thanks BL.

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