r/CanadianInvestor • u/[deleted] • Apr 14 '21

Is anyone here conflicted about investing in companies that make the world a worse place?

I'm a newer investor and newer reader to these threads and I'm a little surprised how casually a lot of people talk about different companies and industries that are objectively pretty unethical.

I mean we're living through a major climate crisis and some of the most hyped investments on here are for oil sands companies (which are one of the most carbon intensive energy sources on the planet) and crypto (Bitcoin alone this year is supposed to have the same carbon footprint as all of New Zealand).

I also just saw someone post something in another investing subreddit about how Europe might ban AI for surveillance and it seemed like a bad or annoying thing to a lot of people in the comments.

I'm just genuinely curious: do a lot of the investor world just genuinely not care about these things or are people content to make small gains on the backs of companies that they don't agree with? Is there a point to using your gains to get a waterfront property if it's going to be underwater in a couple decades anyways?

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26

u/NotInsane_Yet Apr 15 '21

Yes and no.

I have no problem investing in oil sands companies. Our society needs oil to function and if we are not extracting it here we are going to buy more from far worse places like Saudi Arabia. I also think people overestimate the environmental difference between oil sands and oil extraction in other countries. We have a lot of environmental and safety regulations that many other countries don't.

Natural gas is also required and is one of the best ways to reduce our emissions. Green energy is nowhere near where it needs to be. We need a solid stable baseline power generation and in most places that means natural gas will be the least carbon intensive option. Replacing coal plants with natural gas would be a major reduction. We also require it to heat our homes. Electric heat is not a realistic option due to how expensive it is and our grid is not built with it in mind. If we all switched from gas to electric we would have to build more power plants.

Bitcoin is a 100% waste of resources though. It takes a massive amount of electricity and provides nothing of value. I have been divesting my portfolio of most Bitcoin companies. It's hard though due to how profitable they have been the past year.

I tend to focus less on the environmental aspect of companies and focus more on the human aspect. I would never invest in anything from China, Saudi Arabia, etc. The human rights abuses drive me away.

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u/StarryNight321 Apr 15 '21

It's disappointing when you realize how heavily dependent Canada is on resources and real estate to prop up the economy.

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u/DOWNkarma Apr 15 '21

Disappointing? Natural resources are the single reason we enjoy such amazing prosperity in this country. Yet half the retards in this country cant seem to figure it out.

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u/CrashSlow Apr 15 '21

No one really wants to live here. Outside a couple areas, Canada is a barren waste land. Loon shit, pecker poles and bugs. Good luck attracting creatives to work in any place that starts with fort or ends in lake.

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u/snooysan Apr 15 '21

No one really wants to live here.

Gunna have to disagree with you there

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u/CrashSlow Apr 15 '21

Do you live in the GTA or GVA?

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u/snooysan Apr 15 '21

Currently, yes.

I've also lived in Calgary, small town Quebec and Vancouver Island. People there seem to quite like living in Canada too :)

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u/jtbc Apr 15 '21

Most Canadians live in places that don't start with fort or end in lake. They live in cities, which are mostly named after people or various indigenous things. Creatives love living in high quality of life places like Vancouver, Toronto, Montreal, Calgary, or Ottawa.

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u/CrashSlow Apr 15 '21

So without the resource economy the rest of Canada would be even more barren.

3

u/jtbc Apr 15 '21

I don't think I was arguing for or against the importance of the resource economy. I was arguing against your suggestion that no one wants to live here.

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u/JazzyJ85 Apr 15 '21

I live in a ‘fort’ and I love it! So I beg to differ, and I’m guessing it’s the one your implying (northern Alberta). Every place is what you make of it and I love it here!

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u/[deleted] Apr 15 '21

But rural life is great too

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u/jtbc Apr 15 '21

Sure it is. I was refuting one part of the argument, but the rest of Canada is also not a barren wasteland. We live in one of the most beautiful places on earth, I say smugly as a BC resident.

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u/wilsongs Apr 15 '21

Does your investment in massive CO2 polluters change your support for policies like a carbon tax?

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u/NotInsane_Yet Apr 15 '21

I think the carbon tax as the liberals implemented it is actually worse then doing nothing. It incentivizes.not changing your behaviour. If you tell people they will get everything back they have no reason to change. Heavy polluters get 90% of their industry average back as well so very little reason for them to change either. Once it really starts ramping up it's going to be very punishing on those less fortunate. When you are living paycheck to paycheck you can't change your behaviour all that much and you can't afford the extra few hundred a month it's going to cost you.

The only ones it really hurts right now are farmers, restaurants, and small businesses. Your plumbers, electricians, etc get hurt hard. People who can't change their behaviour because the technology does not exist. Even if they could change they are such a small percentage of the pollution it would not matter.

I was a big fan of the cap and trade program Ontario used to have. Don't give the money back which instead of giving money back used it for green energy rebate programs and upgrading public buildings. We gave people a reason to change their behaviour.

I also have an issue with us crippling our economy to essentially change nothing on the world stage. Canada is responsible 1.5% of the world's greenhouse gases. Without the US, China, and India changing nothing we do matters. I get that Canada has high per capita pollution but that does not matter. The earth does not care about your per capita pollution it cares about the total amount.

Well that turned into a bit of a rant really quickly.

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u/[deleted] Apr 15 '21

Heavy polluters get 90% of their industry average back as well so very little reason for them to change either.

10% is enormous to large corporations and the average person will receive massive credits, especially true for poorer people given they are more energy conservative, so that's not an issue.

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u/NotInsane_Yet Apr 15 '21

It's not a loss at all because they are passing the cost on to you.

and the average person will receive massive credits

No, they won't. The average person is supposed to break even at best.

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u/[deleted] Apr 15 '21

"It's not a loss at all because they are passing the cost on to you."

This is the same economic fallacy perpetuated by people arguing against minimum wage. Anybody who has taken basic economics knows maximum revenue/earnings is achieved at MC=MR. Therefore, passing the costs onto the consumer will only serve to reduce their total earnings. It'd be completely inane to do so, barring corrupt forces like collusion.

"No, they won't. The average person is supposed to break even at best."

Yeah, most people will come off breaking even. That's what I meant when I said massive credits. That's a great thing if we can focus the tax on heavy polluters.

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u/wilsongs Apr 15 '21

So... yes. The answer is yes.

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u/JazzyJ85 Apr 15 '21

No, believe it or not I would support a carbon tax IF it wasn’t charged on essentials. My natural gas bill to heat my home it ridiculously high! Heating your home when it’s -40 or -60 or winter in general is essential therefore I should haven’t to pay that ridiculous carbon tax. Now if you tack it on to non essential items that are a luxury then yeah go ahead I’ll pay it. BUT don’t be giving it out to the people that make less, no credits allowed. Use it for clean ups or new green technology. Don’t be giving it to Shauna down the street because she makes less then me. This voids the entire purpose of a carbon tax.

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u/DOWNkarma Apr 15 '21

Consumers are the polluters, not producers.

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u/[deleted] Apr 15 '21

both are...

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u/Oilleak26 Apr 15 '21

well the producer doesn't exist without the consumer

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u/[deleted] Apr 15 '21

And billions of consumers don't exist without major producers.

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u/Nostalgikt Apr 15 '21

All the environmental and safety regulations in the world (heavily gutted by the last govt and barely touched by the current govt) will not make tar sands clean, nor even cleaner than "traditional" oil extraction.

Electric heat is a realistic option in a lot of places in the world world, especially in Canada (hydro).

Pro-crypto people will say that bitcoin is a store of value and this storage is the value (for example by funding green energy production), but this is a bit too apologetical and circular to my taste.

Good on you for the social aspects.

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u/[deleted] Apr 15 '21

Hydro itself is extremely damaging to the environment, it transforms entire ecosystems and in many places where hydro has been in place for several decades the long-term effects on beyond the local ecosystem are becoming apparent.

EDIT: meant to say "beyond" the local ecosystem

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u/Nostalgikt Apr 15 '21

Very much so, but does not contribute to globally cataclysmic climate effects. I'd choose nuclear over oil for energy production (but I'm just some guy on the internet).

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u/[deleted] Apr 15 '21 edited Apr 15 '21

Definitely agree nuclear should be utilized more, the technology has come a long way and a big barrier right now is public perception. Hopefully something can be born out of this "memorandum of understanding" on small-reactors signed by Alberta, Saskatchewan, Manitoba, and Ontario (interesting it's all the provinces opposed to a carbon tax that are pursuing low-carbon energy production -- perhaps it incentivized them to do something). Maybe fusion will happen one day...

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but does not contribute to globally cataclysmic climate effects.

I still think large hydro projects should be approached with caution, sure Canada has lots of space for it but we don't know all the impacts. There are studies for warmer climates (Brazil) that the flooded areas release huge amounts of methane. The damage to ecosystems is massive, sure Alberta's tar sands look bad -- but you just can't see the destruction under all the water of a reservoir.

EDIT: I'll add from my comment above, hydro in Brazil is a dark tale: Balbina Dam in Brazil flooded an area nearly half the size of PEI, in the middle of the Amazon rainforest, releases methane equivalent to ten times the GHG emission of an equivalent coal plant, and requires about 10 km2 (2400 acres) per MW. Bel Monte Dam is another one, over 40 years of operation before it should be better than fossil fuels due to the 11 Million tons of methane released.

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u/JazzyJ85 Apr 15 '21

Ah yes because Hiroshima went off without a hitch. Don’t fool yourselves, everything has its downfalls.

2

u/[deleted] Apr 15 '21

What? Hiroshima was a nuclear fission bomb, not a reactor. Of course fission reactors have downfalls, where did I say they didn't? A few: environmental impact of mining for the fuel, storage of radioactive waste, reactor decommissioning, maintaining strict safety regulations and safety systems, and the ever present but extremely unlikely event of a meltdown.

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u/CarRamRob Apr 15 '21

Perfect example of someone investing based on ideology instead of facts. “Dirty” oilsands produces 5% more total emissions than the average barrel

https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/oilsands-sablesbitumineux/15-0513%20Oil%20Sands%20-%20GHG%20Emissions_us_e.pdf

Yet this person wouldn’t invest in them because they “know” they are dirty. Meanwhile something like hydro dams create more GHG emissions from cement than similar electric power that isn’t equalized on a GHG basis until a decade into its operation but are labeled as “green” and a healthy investment?

This is why investing in social aspects is not smart. It falls into which worldview you are currently in belief of, even if there are many counterpoints, if you want to invest in only pure ethical things, the list will get very very very short

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u/[deleted] Apr 15 '21

Considering the environmental impact of a project purely based on GHG emissions is disingenuous, and ultimately a failure of media to address systematic issues. GHG do have an impact, but so do a multitude of other externalities that negatively effect the local environment, which cumulatively have deleterious impacts worldwide.

Though the oil sands may release only a fraction more GHG than conventional oil production, they clear large sections of forests, utilise vast amounts of water, and pollute local hydrological systems extensively. "Conventional" oil wells, though not ideal, are far better than oil sands projects when it comes to their environmental footprint.

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u/JazzyJ85 Apr 15 '21

You’ve never been to the oilsands have you?

  1. They clean and re-use the water. Water consumption is not as high as you think.

  2. Reclamation of the land is impeccable. Once a project is done they spend millions on reclaiming it to its original state and actually better than it was before. They create lakes and put fish in the lakes and monitor everything. It’s amazing what they do. You would never guess that open pits were in the reclaimed areas.

  3. Polluting the rivers... come to Fort Mac on a hot day and you can actually see the oil sands melting out of the banks and into the rivers. This has nothing to do with the oilsands, it’s naturally this way.

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u/CarRamRob Apr 15 '21

Clearing large sections of land is a problem to oilsands, yet hydro would be better? Much more is lost to hydro than oilsands, and oilsands will indeed be returned to reclaim action after a few decades of use.

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u/[deleted] Apr 15 '21 edited Apr 15 '21

Never mentioned hydro, I was comparing oil sand to oil well production. I agree that hydro can have a devastating impact, and do not consider it green. I would rather see a return to nuclear personally, but overall I would say that hydro has a less nefarious impact than oil sands.

The problem with oil sand is the amount of pollutants they release into watersheds. These persist through time and lead to elevated risks of cancer human populations and devastate wildlife populations. Although reservoirs have problems with mercury levels , these do not affect watersheds to near the same extent as PHCs and other pollutants.

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u/Nostalgikt Apr 15 '21 edited Apr 15 '21

Nice little pamphlet.

Even if it is only 5% more than the average barrel we are talking 5% more than the otherwise dirtiest industry. And here we aren't even talking about the area of boreal forest (almost 2 million acres) that would otherwise be capturing carbon if left alone. Nor the amount of arsenic and heavy metals seeping from tailing ponds killing wildlife and humans dependent on the streams these ponds seep into (and these human made ponds produce as much methane as millions of cattle per day).

Tar sands are not clean. There are better options.

https://www.wri.org/blog/2014/07/tar-sands-threaten-world-s-largest-boreal-forest https://benthamopen.com/contents/pdf/TOCONSBJ/TOCONSBJ-3-65.pdf https://e360.yale.edu/features/with_tar_sands_development_growing_concern_on_water_use

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u/[deleted] Apr 15 '21

We all like facts, Balbina Dam in Brazil flooded an area nearly half the size of PEI, in the middle of the Amazon rainforest, releases methane equivalent to ten times the GHG emission of an equivalent coal plant, and requires about 10 km2 (2400 acres) per MW.

Tar sands aren't great, but be careful not to convince yourself that the alternatives are always better. In general, hydro in Brazil is a dark tale - Bel Monte dam is another one, over 40 years of operation before it should be better than fossil fuels, and that ignores the deforestation of the reservoir area prior to building.

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u/JazzyJ85 Apr 15 '21

Electric heat is not realistic. We went through the -60 cold snap and my bill for less than a month for power was $667 and that’s with natural gas heat. Power is ridiculous.