5 ms·

Couldn't he just buy out the major coal energy companies and force them to become 100% wind+solar+etc within x years.

keenmaster 7y ago
That works as long as: 1. Startup costs for a coal company are high (I assume they are, but it depends on the region) 2. The company has exclusive right to their coal, and it's hard to find other sources of coal that aren't claimed by other companies (not sure on this one, but it also depends on the region) (these first 2 conditions are in place to make sure that no one starts another coal company after the buyout) 3. The marginal cost of buying a coal company for that purpose is lower than the marginal cost of starting a company which has the same net amount of positive climate change externalities.
legitster 7y ago
A lot of the worst polluters are state owned coal plants. There are some private energy producers, but from what I understand, most energy companies just act as interstate brokers between local agencies.
- phillc73 7y ago
  Then, buy the biggest coal mining companies and shut them down (or convert to renewables). In 2016, Australia was the world's biggest net coal exporter[1] with 32% of global exports and the fourth highest producer. As far as I know, all coal mining in Australia is undertaken by private companies who hold a mining lease. The $10billion could be used to buy controlling interests in some of the 10 biggest listed coal mining companies in Australia[2] and stop mining. What I don't know is if the Australian Government can withdraw a coal mining lease if it's not being used (then just reduce production to miniscule levels) or what the impact would be when the lease expires. Still, I'd suggest such a move would have a crippling near term impact on the coal mining industry, which might be enough to kick renewables along further to fill the gap. [1] https://en.wikipedia.org/wiki/Coal_in_Australia#Production,_exports_and_reserves https://en.wikipedia.org/wiki/Coal_in_Australia#Production,_... [2] https://top10companiesinaustralia.com/top-10-listed-coal-companies-in-australia/ https://top10companiesinaustralia.com/top-10-listed-coal-com...
  - legitster 7y ago
    It's an interesting idea. Buy up any lease you can and sit on it. Probably a risky way to burn through a few billion, and at the risk that new companies pop up anyway and undo all your work. I would rather they focus on drowning out coal on the supply side, or furthering carbon capture technology.
  - Smoosh 7y ago
    Don't forget to allow a few hundred million to donate to political parties (particularly the incumbents), as the current minerals/mining lobby is quite entrenched.
  - loeg 7y ago
    Australia also might not be keen on a foreign alien buying up all of their natural resource extraction infrastructure, private or not.
KerryJones 7y ago
This is an interesting idea but impractical to implement. Not all companies are for sale, there are still real uses for coal, and "forcing something to happen" doesn't always makes sense. It's his job to be the best capital allocator he can be, and buying a company just to shut it down is a way to lose a lot of money. Since they are sinking on their own, fighting to find better solutions for the future might have been a calculation he made that has better long term benefits.
- toomuchtodo 7y ago
  You would find economic ways to disable these companies from operating. You mustn’t buy a whole company to do this. Maybe you buy a key piece of real estate they need and tie them up in court for years. Maybe you find key employees and hire them away and pay them to garden at the Spheres in Seattle. Maybe you convince a port to no longer allow the transfer of coal through there using economic coercion or donations to city hall. Or you acquire the water rights near a coal plant so it can’t run its cooling operations, forcing early retirement. Lots of ways to skin a cat. Find the linchpin and apply as much force necessary with as little cash possible. One can be efficient and expedient simultaneously. I agree you have to do the math to pick the opportunities that allow for offsetting/retiring as much CO2 per dollar spent as possible. I’ve put together notes along these lines if someone with deep pockets is interested. Economic warfare is the most exciting exertion of force imho.
  - codekilla 7y ago
    Do you think there is any appetite for funding these types of alternative ‘campaigns’. I’ve also thought a bit about this.
    - toomuchtodo 7y ago
      I get mixed reactions from potential wealthy benefactors when I discuss these ideas. Some definitely shun them and would rather play a clean ballgame, but I have had exactly two who have asked who to make the check out to. In front of the right audience, there is an appetite.
soVeryTired 7y ago
Presumably the minor coal energy companies would quickly become new major companies in the vaccuum left behind.
- deleted 7y ago
  [deleted]
- mediaman 7y ago
  Not really. Coal is not economic to make new plants. New plants are generally natural gas or renewable. So shutting down old plants shifts demand to NG or solar/wind.
maximente 7y ago
Spain bought out their coal miners recently: https://www.theguardian.com/environment/2018/oct/26/spain-to-close-most-coal-mines-after-striking-250m-deal https://www.theguardian.com/environment/2018/oct/26/spain-to... surprisingly not /that/ expensive considering the early retirement and training for newer miners
- toomuchtodo 7y ago
  It’s really not expensive at all, but you have to have policymakers with the will to implement these policies. Arby’s has more employees than there are coal miners in the United States, for example. The problem is there’s an enormous amount of investors and entrenched interests who are going to have trillions of dollars in stranded assets from these policies. Those folks should not be made whole for bad investment decisions.

That works as long as: 1. Startup costs for a coal company are high (I assume they are, but it depends on the region) 2. The company has exclusive right to their coal, and it's hard to find other sources of coal that aren't claimed by other companies (not sure on this one, but it also depends on the region) (these first 2 conditions are in place to make sure that no one starts another coal company after the buyout) 3. The marginal cost of buying a coal company for that purpose is lower than the marginal cost of starting a company which has the same net amount of positive climate change externalities.

legitster 7y ago

A lot of the worst polluters are state owned coal plants. There are some private energy producers, but from what I understand, most energy companies just act as interstate brokers between local agencies.

phillc73 7y ago
Then, buy the biggest coal mining companies and shut them down (or convert to renewables). In 2016, Australia was the world's biggest net coal exporter[1] with 32% of global exports and the fourth highest producer. As far as I know, all coal mining in Australia is undertaken by private companies who hold a mining lease. The $10billion could be used to buy controlling interests in some of the 10 biggest listed coal mining companies in Australia[2] and stop mining. What I don't know is if the Australian Government can withdraw a coal mining lease if it's not being used (then just reduce production to miniscule levels) or what the impact would be when the lease expires. Still, I'd suggest such a move would have a crippling near term impact on the coal mining industry, which might be enough to kick renewables along further to fill the gap. [1] https://en.wikipedia.org/wiki/Coal_in_Australia#Production,_exports_and_reserves https://en.wikipedia.org/wiki/Coal_in_Australia#Production,_... [2] https://top10companiesinaustralia.com/top-10-listed-coal-companies-in-australia/ https://top10companiesinaustralia.com/top-10-listed-coal-com...
- legitster 7y ago
  It's an interesting idea. Buy up any lease you can and sit on it. Probably a risky way to burn through a few billion, and at the risk that new companies pop up anyway and undo all your work. I would rather they focus on drowning out coal on the supply side, or furthering carbon capture technology.
- Smoosh 7y ago
  Don't forget to allow a few hundred million to donate to political parties (particularly the incumbents), as the current minerals/mining lobby is quite entrenched.
- loeg 7y ago
  Australia also might not be keen on a foreign alien buying up all of their natural resource extraction infrastructure, private or not.

KerryJones 7y ago

This is an interesting idea but impractical to implement. Not all companies are for sale, there are still real uses for coal, and "forcing something to happen" doesn't always makes sense. It's his job to be the best capital allocator he can be, and buying a company just to shut it down is a way to lose a lot of money. Since they are sinking on their own, fighting to find better solutions for the future might have been a calculation he made that has better long term benefits.

toomuchtodo 7y ago
You would find economic ways to disable these companies from operating. You mustn’t buy a whole company to do this. Maybe you buy a key piece of real estate they need and tie them up in court for years. Maybe you find key employees and hire them away and pay them to garden at the Spheres in Seattle. Maybe you convince a port to no longer allow the transfer of coal through there using economic coercion or donations to city hall. Or you acquire the water rights near a coal plant so it can’t run its cooling operations, forcing early retirement. Lots of ways to skin a cat. Find the linchpin and apply as much force necessary with as little cash possible. One can be efficient and expedient simultaneously. I agree you have to do the math to pick the opportunities that allow for offsetting/retiring as much CO2 per dollar spent as possible. I’ve put together notes along these lines if someone with deep pockets is interested. Economic warfare is the most exciting exertion of force imho.
- codekilla 7y ago
  Do you think there is any appetite for funding these types of alternative ‘campaigns’. I’ve also thought a bit about this.
  - toomuchtodo 7y ago
    I get mixed reactions from potential wealthy benefactors when I discuss these ideas. Some definitely shun them and would rather play a clean ballgame, but I have had exactly two who have asked who to make the check out to. In front of the right audience, there is an appetite.

soVeryTired 7y ago

Presumably the minor coal energy companies would quickly become new major companies in the vaccuum left behind.

deleted 7y ago
[deleted]
mediaman 7y ago
Not really. Coal is not economic to make new plants. New plants are generally natural gas or renewable. So shutting down old plants shifts demand to NG or solar/wind.

maximente 7y ago

Spain bought out their coal miners recently: https://www.theguardian.com/environment/2018/oct/26/spain-to-close-most-coal-mines-after-striking-250m-deal https://www.theguardian.com/environment/2018/oct/26/spain-to... surprisingly not /that/ expensive considering the early retirement and training for newer miners

toomuchtodo 7y ago
It’s really not expensive at all, but you have to have policymakers with the will to implement these policies. Arby’s has more employees than there are coal miners in the United States, for example. The problem is there’s an enormous amount of investors and entrenched interests who are going to have trillions of dollars in stranded assets from these policies. Those folks should not be made whole for bad investment decisions.