I was taking my teenage daughter to do a little gravel biking on the C&O Canal towpath over the weekend. This is one of the few things that America does right. They convert old canal paths and railroad beds into long-distance bike trails.
The C&O trail runs 184 miles from Georgetown in D.C. to Cumberland, Maryland. It is clean, covered with a verdant canopy of bucolic trees and runs parallel to the Potomac River, which seems to peak out around every bend.
On the way there, I hit the gas station to fill my 20-gallon tank at $4.08 a gallon. My daughter was giving me the business about global warming because this is what they teach these days, and it's what teenagers do.
I told her she should find better things to worry about. I used to fret about global nuclear war, which is a much better thing to be afraid of. It has real teeth and is a real horror show.
The risk is still out there with Putin just as it was with Gorbachev, but people have moved on. Fear changes with the seasons. It has fashions just like clothes or equities.
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But for the sake of argument, and putting aside teenage rebellion for a moment, let's say that Earth is getting warmer, that this is a tragedy, that it is being caused by humans burning fossil fuels, that our fearless leaders want to do something about it other than skim money, and that they know what to do and this will somehow be effective.
Assuming all of that, they are still going about it all wrong. Because the goal shouldn’t be to make fossil fuel more expensive; it should be to make it less so, for the simple reason that cheap energy in the form of oil, coal, and natural gas is good for humanity and the planet.
All you have to do is look at where global pollution comes from. It comes from developing countries like China, India, and Indonesia. On the flip side, developed countries like Japan, western Europe, and most of North America don’t pollute nearly as much as developing countries.
Here are annual CO2 emissions by region:
You only have to get on a plane and fly to Africa or India and you will know it is true. One well-known stat is that 90% of all seaborne plastic comes from just eight rivers in Asia. This is why people talk of a Great Pacific Garbage Patch, not an Great Atlantic Garbage Patch.
Don’t get me wrong, there is no morality at play here. Developed countries used to pollute. Dickensian England and Sinclairian Chicago can attest to that. But by using cheap hydrocarbon energy instead of actual horses and people, they were able to attain an economic model beyond simple sustenance.
They got rich by using low-cost energy. At that point they spent some money and passed some laws to clean up the environment. U.S. carbon emissions, per capita and in total, peaked in the 2000s and have been dropping ever since.
Get Rich and Save the World
The only way to solve global warming (which no one in power really wants to do) is by transforming the developing world into the developed world. Historically, the only way countries get rich is through manufacturing and trade. And to achieve that you need a low-cost source of energy, which is still coal and natural gas for electricity and oil for transportation.
However, people don’t want to hear this as there is no money in it, nor is there room for heightened feelings of self-worth. When the shaman rattles his bones and shakes his feathers and the rains come and the corn grows, everyone is happy with the slight exception of the disemboweled virgins.
But you can do something to help. You can buy Alliance Resource Partners (NASDAQ: ARLP), an international coal company, for $19.33. It has a P/E of 3.5, pays a 13.82% dividend, and has a 29% profit margin.
And when someone questions your piety toward Gaia, you can sit them down and explain to them that they have been misinformed and that you are in fact saving the planet and helping poor people at the same time.
All the best,
Christian DeHaemer Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
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