ESG and All the Other Attempts at Replacing A Free Market in Energy Are Imploding

Robert Bradley is proven correct yet again. Call it what you will, but Net Zero, the Green New Deal, ESG, the Energy Transition, etc., are all imploding simply because what can't go on, won't.

Guest Post by Robert Bradley, Jr. at Master Resource.

The “socially responsible” investing bubble–a combination of government subsidies and political correctness–is leaking air. Yesterday’s post reported the demise of the Net Zero Banking Alliance. Now the wind and solar Exchange Traded Fund [ETF] is in freefall. As Eric Balchunas, Senior ETF analyst at Bloomberg Intelligence, recently reported:

Solar, Wind ETF Closures Show Just How Much the Climate Has Changed. 5 ESG ETF closures in Aug, now 21 for year, 74 total… with 50 more in danger bc under the $50m mark. Basically when all is said and done about half of all ESG ETFs launched will likely be shuttered

One wealth analyst commented: “It seems to be a category started with good intent (ESG/Impact) but was quickly hijacked by politicians for their own causes and that dilutes any initial good intent.”

But good intentions are not enough. As Milton Friedman noted:

One of the great mistakes is to judge policies and programs by their intentions rather than their results. (1975)

Concentrated power is not rendered harmless by the good intentions of those who create it. (1962)

Wind and solar, and other politically correct, economically incorrect energies and technologies are not per se good. They are really a per se bad if the market rejects and government enables. And wind and solar have environmental issues that are opposed at the grassroots by the on-the-spot landowners and ecologists.

Editor’s Note: The collapse of Net Zero (a/k/a Green New Deal) is staring everyone in the face these days. I asked Perplexity to share examples:

• Boris Johnson, former UK Prime Minister, recently stated: “This aggressive pursuit of net zero is currently not only economically destructive, but an active danger to efforts to tackle climate change.” He criticized the pace and approach of net zero policies as harmful to economic stability and climate goals.

• Richard Tice, Deputy Leader of Reform UK, a mainstream UK party questioning net zero, said: “People are starting to wake up” regarding how soaring energy prices and rising living costs are linked to net zero policies. His party labels net zero as “net stupid zero,” pushing back politically against the climate consensus.

• U.S. President Donald Trump withdrew the U.S. from the Paris Agreement upon returning to office and promoted expanded fossil fuel drilling with the slogan “drill, baby, drill,” arguing against climate policies that restrict fossil fuel use and signaling a major rejection of the net zero path.

• Peter Dutton, Australian Coalition leader, suggested that current net zero targets are unrealistic and that Australia should submit less ambitious emissions reduction goals, emphasizing practicality over strict adherence to international climate targets.

• Kemi Badenoch of the UK Conservative Party bluntly stated: “Net zero by 2050 is impossible,” indicating a pragmatic rather than idealistic stance on climate action that questions previous government commitments.

• New Zealand’s current government plans to reverse some green policies, including lifting the ban on oil and gas exploration, postponing agricultural emissions pricing by five years, cutting investments in climate projects, and removing EV financial incentives.

• Brazil presented an emissions reduction target with wide ranges for 2035, casting uncertainty on its true ambition level. The government has notably been unclear on sector-specific decarbonization plans, raising doubts about the credibility of its net zero roadmap.

• Japan has submitted targets that remain “highly insufficient” and has postponed revisions to its net zero goals, raising questions about the government’s seriousness in meeting 2050 climate neutrality.

• Major banks in the U.S., Canada, Australia, and Japan have withdrawn from the Net Zero Banking Alliance (NZBA) essentially collapsing it. Political pressure and concerns about the financial costs of transition have been cited as driving these withdrawals.

• Microsoft, Procter & Gamble (P&G), Unilever, Walmart: In March 2024, the Science Based Targets initiative (SBTi) removed 239 companies from their net-zero commitment list because these companies missed deadlines to submit updated targets for validation. While a few have since had near-term targets approved, most have not renewed validated net-zero goals.

• Amazon: A co-founder of The Climate Pledge, Amazon had its net-zero commitment removed by SBTi in 2023. The company remains committed but with significant flexibility, especially around the use of offsets.

• Exxon Mobil: Quietly abandoned a 2025 algae biofuels production goal in 2023, citing the need for more research, reflecting a slowdown in some clean technology investments as part of weaker climate ambitions.

• BP: Scaled back and eventually dropped a 2030 fossil fuel production cut goal since 2023. The company’s new CEO cited having “gone too far, too fast” and shifted more budget back to oil and gas investments.

• Equinor: The Norwegian energy giant abandoned its goal to invest more in renewables than fossil fuels by 2030, citing the slow and uneven energy transition.

• Eneos Holdings (Japan): Pulled back on a hydrogen production target by 2040, noting the decarbonization shift appears to be slowing.

• Alphabet (Google’s parent) and Microsoft: Both have faced rising emissions due to expanding AI data center operations, leading to challenges in maintaining carbon neutrality or negativity commitments. Alphabet ended a longstanding carbon neutrality program in 2024 due to surging emissions.

• Shell: Abandoned its 2035 target to reduce carbon intensity by 45%, citing uncertainty in the energy transition pace.

• Coca-Cola, HSBC, Wells Fargo: These companies, among others, have dropped or weakened environmental goals due to the inadequacy of voluntary actions and increasing challenges in implementation.

• The IEA recently said that some additional fossil fuel investment may be needed, contradicting its earlier uncompromising stance against new fossil projects. This rhetorical shift is partly a response to global anxieties around energy security, affordability, and supply disruptions in politically complex years.

The collapse cannot be denied.

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