According to an article at Times Online, the London School of Economics has recieved a £12 million donation to set up a new institute to study the economics of climate change. The philanthropist concerned is Yorkshire born Jeremy Grantham, founder of a £55 billion investment fund called GMO. He is clearly a very successful investor and has endowed the Grantham Foundation for the Protection of the Environment, from which the funding comes, with £165 million of his own money.
Grantham grew up in Yorkshire and went to university in Sheffield before moving to America in 1968 to take an MBA at Harvard. However, his decision to invest some of his foundation’s money in Britain was not a nostalgic one. It followed the publication of Lord Stern’s report on The Economics of Climate Change and it is now Stern who heads the LSE institute.
Those choices are already paying dividends. The LSE’s research seems likely to play a key role in this December’s UN negotiations in Copenhagen where world leaders will seek agreement on cutting greenhouse gases.
Grantham clearly takes ‘the environment’ very seriously. Here is what he told The Times about why he is being so generous:
“Because climate change is turning into the biggest problem humanity has ever faced. I wanted to invest my money in places where it might actually help tackle that problem,”
“We are destroying the planet. We are in the middle of one of the greatest extinctions of species Earth has seen. If it continues unchecked, humanity will soon be running out of food and water.
“What it means is that the environment, especially climate change, is going to be the central issue for all society, including business, politics and the economy. Capitalism and business are going to have to remodel themselves and adapt to a rapidly changing and eventually very different world.”
These views extend far beyond the world of mainstream science, all the way to the wilder shores of environmental activism and alarmist propaganda; not at all the kind of speculation that you would expect a respected academic institution like the LSE to be associated with. It would also seem that Grantham has a pretty low opinion of anyone who is not either a scientist or, presumably, a financier like himself:
“Humanity is largely innumerate,” said Grantham.
“They don’t understand how frightening the numbers behind climate change really are. What’s more, the people who can count, the scientists, are paralysed with fear about overstating their case. They have consistently understated the risk and so allowed politicians to ignore it.”
Presumably Grantham considers that he does understand numbers; after all he has become very rich working in a field where innumeracy might be seen as a distinct disadvantage. On the other hand, his understanding of climate research really does seem to be somewhat naive.
The article goes on to say that Grantham was one of the few financiers who anticipated the collapse of the housing market and the onset of the credit crunch. One of the causes of this disaster was reliance on mathematical models that attempted to predict future risks and are very similar to those used to predict future climate. So it appears that this is a financier who has closed his mind to some of the consequences of relying implicitly on people who ‘understand numbers’.
Philanthropy on this scale can clearly have a considerable impact on research effort and public policy. The article goes on to mention what The Times evidently considers to be a shortage of private funding directed towards climate change:
Professor Cathy Pharoah, co-director of City University’s Centre for Charitable Giving and Philanthropy, suspects climate change is such a big problem that many would-be donors do not know how to donate or who to give to.
“Climate change has yet to become an attractive issue for many donors,” she said.
She also found that the top 50 environment charities had income of £977m in 2007 – less than half the £2.1 billion achieved by the 50 top overseas aid charities, such as Oxfam.
In these days, when we have become used to politicians and economic pundits talking in terms of billions and trillions, £977 million is still a non-trivial amount of money, even to those of us who Mr Grantham may consider to be innumerate. I have no idea what donations have been made to British organisation that are sceptical about climate change, but it is quite safe to assume that they would be dwarfed by Professor Pharoah’s figure.
I am delighted to know that overseas aid charities receive so much support. The beneficiaries are attempting to alleviate very real problems that still cause preventable poverty, disease and death in places beyond the cosy confines of the developed world, although some NGOs, like Oxfam, are also energetic advocates of climate alarmism. But the irony of nearly half as much money being directed towards advocates of a perceived threat, rather than organisations that are actually trying to save lives that are unquestionably at risk right now, seems to have passed the learned professor by. It is a measure of the extent to which group-think, once established in academia, can subvert rational analysis. But no doubt Mr Grantham would consider Professor Pharoh to be another of those fortunate souls who ‘understand numbers’.
The Times reporter only seems to have one reservation about what Grantham is doing:
Some might argue that Grantham would have been better off spending his money on donations to political parties. After all, history has shown how a few million pounds in the right political pockets can buy influence.
Grantham never considered it.
“I don’t approve of that kind of government. It’s very sleazy.”
No doubt that is very high minded, and anyway why bother to use your £165 million endowment to buy here-today-and-gone-tomorrow politicians when, for a trivial £12 million, you can buy yourself a whole research institute to promote your views at the Copenhagen Summit at the end of this year under the imprimatur of Lord Stern and the London School of Economics.
Now that’s the kind of investment that a financier would really understand.
This is a good post, Tony, and there are plenty of ironies here. One thing that stands out is the great discrepancy between the utterances of the scientists – for the most part relatively cautious and conservative – and the overblown pronouncements of the politicians, financiers and journalists. “Might possibly” is routinely transformed into “will definitely”, as if fed into a grinder with the lean meat of science going in one end and alarmist sausage coming out the other. I agree that there is a very good case to be made that those who are overstating the likelihood and dangers of Global Warming stand to gain considerably by doing so. When environmental issues are at the fore (as they were until recently in the UK) politicians vie with each other to appear ever greener and aware of the GW menace. Because bad news generally sells, the media tend to jump immediately to worst-case scenarios (although constantly bingeing on catastrophe can lead to fatigue, and it’s possible to have too much of a bad thing.) And of course there are those tycoons, advisers, consultants and traders who are positioned to make a great deal of money out of Global Warming, whatever happens (or doesn’t happen) to the climate in the next few decades. A related irony is that those of us who are sceptical of CAGW are often accused of being in the pay of Big Oil or similar sinister corporate entities.
“But the irony of nearly half as much money being directed towards advocates of a perceived threat, rather than organisations that are actually trying to save lives that are unquestionably at risk right now, seems to have passed the learned professor by.” Totally agree with this; it is something that never fails to amaze and dismay. In a world where thousands of actual lives are being lost to war and disease in places like the Congo and Sri Lanka, these deaths somehow seem to be less significant than the hypothetical future deaths due to Global Warming. IMO, Bjorn Lomborg has plenty of intelligent things to say about this.
“Humanity is largely innumerate”. Jeremy Grantham may be a philanthropist but that statement sounds like it is coming from the mouth of a misanthrope.
Alex
In the UK at least, I suspect that there will be more than enough very real catastrophes in the coming years to discourage the media from focusing too much on imaginary ones.
It would be interesting to know how the Grantham’s GMO fund is invested, but I haven’t had time to try and find out.
What do they say about a fool and his money ?
If you review WuWT, and note the comments and their references some wonderful gems come to light, like this one…
http://mickysmuses.blogspot.com/2009/05/quote-for-day.html
Mmmm that Man Stern popping up again. Hasn’t he taken advantage of the whole global warming / Climate Change alarmist fairy-tale? I would like to see him put on the spot by a switched on investigative journalist (if one of those actually exists). The only way these people will stop the alarmist nonsense is if it were compulsory for them to have a 10 minute public question and answer session before they had their views published, plus public access to their data.
Its going to happen one day soon as I believe that once we have finished with MP’s expenses someone will turn to the far greater millions wasted on this current misadventure. We just have to find a journalist with integrity. Opps is that a contradiction in terms?.
Peter Gearny:
I certainly seem to remember that after Sterb published his report he was criticised by many of his fellow economists, although this didn’t get much coverage in the MSM then. On the other hand, the Grantham Institute at the LSE are being very critical of the Met Office regional predictions. See link added as an update to the header post here:
http://ccgi.newbery1.plus.com/blog/?p=197