News & Analysis

British Pound high shows that many view climate change as just a tax-raising hobby horse

Andrew Saks, Tuesday, 1 June 2021

How can this be? Especially when the pragmatic British public has calmly given the short shrift to the plethora of gushing predictions from mainstream media which began a few weeks ago suggesting that the British economy was about to boom to an extent not seen in generations whilst omitting the important matter of a government-induced 300 year low point, followed by more superlatives which were uttered by clicks-over-substance journalists stating that the end of lockdowns will place the United Kingdom in pole position.

All of this baseless speculation was largely ignored, and the British economy still languishes in the doldrums, however the Pound's performance is somewhat fascinating.

Across the pond in North America, and across the now strictly bordered channel in mainland Europe, the chattering classes and the glory hungry left-leaning politicians are banging the climate change drum once again.

It is quite astonishing that there is such a huge order of human beings whose government-employed titles involve being responsible for 'climate change' policy. Surely that is the work of nature?

The United Nations thinks otherwise, and has enormous human cognitive resources tied up in pontificating about the weather.

The COP26 Climate Change Conference is looking for a host city, and it may well end up in the United Kingdom if the government, intent on putting obstacles in the way of hard-working citizens, has its way, however the sentiment of the British public and its continuance with normal life differs from the increasing pressure by global zealots, and the Pound's strong value shows it.

The Group of Seven (G7) finance ministers have a history of making big decisions, dating back to the Plaza Accord in 1985 when the G7 acted to devalue the dollar.

This year, Rishi Sunak, the man who used government money to pay people to stay home from work and then transferred the responsibility of the destroyed businesses that his government's lockdowns caused into the hands of the banks and the taxpayer, is looking to get in on the action as the public are wise to lockdowns, and he has to think of another ruse to introduce restrictions on businesses and livelihoods.

Climate change will be a big part of the agenda at the G7 meeting which is scheduled to take place in Cornwall. Mr Sunak as chairman has already warmed up his counterparts with a request for the development of international standards of green financial reporting.

The difference is that the British business community and the national population are a responsible, highly well-organized bunch. Most people know that they are not intentionally destroying the planet and that Britain, like most of European and North America, is a modern, socially conscious society.

There is far more clamor in the US and Europe, where ministers are intent on railing against large companies on the grounds of climate impact, including among fossil fuel giants. For example, an 'enemy within' situation has been in place at oil giant Exxon, which elected a whole new set of shareholders with green viewpoints who then performed a ruthless display of shareholder power on climate change May annual meetings of the company in the US.

The growing fear in the United States that President Biden, keen to demonstrate his anti-capitalist views, may invoke 'climate lockdowns' is very apparent, whereas that fear does not exist in the United Kingdom, hence the dollar may well be weakened by bearish views on the future of large companies if they are inhibited by over-the-top climate orientated restrictions, and of the buying public if they are not allowed to move freely or conduct their work or leisure without a man in a uniform policing them.

According to one of the City of London's most respected commentators, Alex Brummer, each country that emits more than the per capita world average of carbon dioxide would pay a fee into an incentive fund.

Mr Brummer said today that the annual payment would be calculated by multiplying excess carbon consumption per capita by population. There would be a tax-tariff set on each extra tonne of carbon dioxide and that if the tariff were to be started at say $50 a ton then the UK would end up paying $6billion into the fund (on present emissions), the US $130billion and China $63billion.

It is quite clear that the British taxpayer is more concerned with paying billions into the massive Covid lockdown black hole and interested in restoring their liberties and livelihoods than a potential odious demand for $6 billion on climate levies beige blazer-wearing UN officials.

Britain knows that the current lockdowns and business closures are costing billions more than a non-enforceable tax levy from an outside organization.

For that reason, the GBPUSD is at a three year high today at 1.4221 and this is a very important metric, because it is all very easy to say "this is the biggest boom in 70 years" if the last few months have been lower than 300 years but with GBPUSD values, the figures are there in black and white, and today's pound value genuinely represents a boom.

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