Companies Are Going 'Green' – But Not for the Reason You Think

by Andrew Zatlin

Gone are the days when only hippies cared about the environment.

These days, big businesses are focused on going "green."

The thing is, this color rush isn't about saving endangered animals or conserving trees...

It's all about that other green – money!

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

Companies Are Going 'Green' – But Not for the Reason You Think

Before you break out the torches and pitchforks, let me make something crystal clear:

I'm a big advocate of the environment. I believe that, left unchecked, mankind is a danger to Mother Nature. And I support reasonable checks and balances on industries in order to protect our planet.

However, I also recognize that modern environmental policy is really just a front for big business.

Climate change is all about public policy. And there's big money to be made here – trillions of dollars' worth of opportunities.

The thing is, once we figure out where the big guys are placing their bets, all we have to do is follow along for major profits...

The Clean Air Act

Fifty years ago, America passed the Clean Air Act, a law intended to reduce and control air pollution nationwide. (By the way, what a great name. Only a truly evil person could be against something called the Clean Air Act.)

What it really did, though, was create an oligopoly of oil refineries. You see, since 1970, no new oil refineries have been built. Only existing refineries can be expanded and updated.

Essentially, the long-standing oil companies have dominated the industry for decades. And one of the primary beneficiaries is a pair of brothers...

Those Against Us Are Scum

I'm referring to Charles and David Koch – the Koch brothers. These guys run Koch Industries, a multinational conglomerate with annual revenues north of $110 billion and a big stake in oil.

This company is continuously lobbying against any changes to the Clean Air Act. Anyone who tries to tinker with it is made out to be anti-environment – total scum. They're portrayed as being against things like American values, Mother Nature, and apple pie.

The situation is truly a page out of the bait-and-switch playbook. Companies like Koch can appeal to the morality of being pro-environment, when really they just want to keep the profit machine churning.

Keep in mind, it always starts with morality. That's the fairy dust to sell to the public. And we saw the same thing recently with arguably the biggest environmental initiative in the world...

The Paris Accords

In 2016, nearly 200 countries, including the U.S., agreed to the Paris Accords, a global effort to reduce the effects of climate change.

This was a major initiative by then-President Barack Obama. But when Donald Trump became president, he renounced America's participation. Why?

One aspect of the agreement was an annual $100 billion tax on the developed world, money that would go to aid underdeveloped nations. But these "underdeveloped" nations were China and India.

Another aspect was creating a carbon credit market. Essentially, this turned pollution into a tradeable asset. And everyone, including Swiss bankers, wanted in on a market they believed would be worth $2 trillion in just a few years.

This didn't sit well with Trump. So he started asking questions...

Asking the Right Questions

For example:

Why is the U.S. footing the bill and basically giving money to China and India, two of the world's worst polluters?

Why aren't we asking China, the world's second-largest economy, to clean up its act?

Why are environmentalists yelling at the U.S., which is dropping carbon emissions rates annually, while emissions are rising in other nations?

You get the idea: It wasn't about saving the environment. It was about money and wealth.

Trump refused to play ball with this arrangement. And as a result, he got kicked to the curb. Then on his first day in the Oval Office, Joe Biden signed the U.S. back into the agreement.

Now we have a resurgent effort to be pro-environment. And it's not just happening in Washington D.C.

It's also happening on Wall Street...

Wall Street's In on It, Too

You might be familiar with ESG investing, which stands for "environmental, social, and governance" investing. Essentially, it's a focus on investing in initiatives and companies that are pro-environment.

But did you know that this trend was started by one of the world's largest investment funds? Believe it or not, Blackstone (BX) came up with the concept of promoting ESG investing. Here's why...

Blackstone invested in or acquired multiple alternative energy technologies, then got the government to start putting public money in the promotion of these technologies.

It's like if I bought a water treatment plant and then convinced everyone that they needed a pool.

At the end of the day, climate change is big money. And big money is behind it.

Electric vehicles... alternative energies... carbon tax trading – there are trillions of dollars at stake in these trends. And they will eventually pay off...

This means we need to get our investments aligned so we can capture our share of the profits.

If you're a "Pro" subscriber, I've got an idea on how to get this alignment started. In the meantime, we're in it to win it. Zatlin out.

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Andrew Zatlin
Andrew Zatlin
Moneyball Economics