May. 20, 2022
TO: Security Exchange Commission (SEC) May 19, 2022 From: Don Williams Subject: Comments re SEC File Number S7-10-22 : The Enhancement and Standardization of Climate-Related Disclosures for Investors The proposed SEC rule should not be imposed because it will greatly damage national security, it will dump much misery and poverty onto the American People and its one-sided biased market signals will encourage massive malinvestment, waste and loss of national wealth. The SEC is not competent to analyze the multiple, complex tradeoffs needed to address climate change and it is unilaterally making and imposing decisions that should be the responsibility of the US Congress. Most of my following comments apply to Section IV (Economic Analysis ) of S7-10-22. A) Damage to National Security 1) As a result of Washington’s push to expand NATO into Ukraine, support Taiwan and start a trade war we are now in a second Cold War 2.0 with Russia and China. 2) It is stupid to make US transportation 100 percent dependent upon an electrical grid that is vulnerable to collapse from a solar Carrington Event or from EMP (Electrical Magnetic Pulse) caused by a nuclear warhead detonated in space. A nuke that could be sent by a Russian proxy (Iran) or Chinese proxy (North Korea). If food has to be delivered to our cities by electrical trucks and trains, then our cities will suffer major famine if the fragile electrical grid collapses. Note the failure of the Texas electrical grid last winter. 3) China currently controls almost 80 percent of global solar panel manufacturing. It is stupid to make US energy and transportation totally dependent upon supplies from our enemy. It is also stupid to make us totally dependent upon distant foreign supply chains that could be cut at any time ( e.g the massive amounts of lithium and rare earths needed for batteries and electrical cars, EHV electrical transformers from South Korea/Germany with 18 month delivery lead times, etc.) In my opinion the Chinese monopoly will continue because some US factions are pursuing their selfish interests (e.g, the Solar Energy Industries Association ) and are pressing Washington to enslave us with a dependency on Chinese solar panels at the expense of US manufacturers. Most recently shown by criticism of the Commerce Department’s investigation of Chinese dumping. 4) The Green Energy (solar, wind) encouraged by this Rule is vastly inferior to fossil fuels. If it wasn’t it would already exist, government would not have to impose it with punitive carbon taxes/regulations, and we would not need to spend an additional $650 BILLION per YEAR to implement it.(Mckinsey Report). Most of that $650 billion will enrich China, give China the means to greatly increase her military power and provide us with no benefit except a reduction in CO2 emissions. Solar farms are feasible only because Chinese solar panels are (currently) cheap and they are cheap because China burns vast amounts of coal to make them. Solar has a poor EROEI (Energy Return on Energy Invested). Heavy Burden on the American People 5) $650 billion per YEAR is almost equal to the US military budget. Where will the money come from? The $30 Trillion federal debt now equals 124 percent of our GDP, the highest level in 100 years. Plus the federal government has $90 trillion in unfunded Social Security/Medicare liabilities for the huge cohort of retiring baby boomers --- whose 55 years of payroll taxes were stolen and spent long ago. To fight Cold War 2.0, the Pentagon is also asking for $Trillions to upgrade and increase our Triad of nuclear weapons. 6) The $650 BILLION per YEAR for the Green Energy Transition will NOT come from Wall Street, the Big Banks or other major political campaign donors. They do not give money away. They will demand that the US Government ensure that any investment they make will be returned along with a hefty profit. That is why a few billionaires have purchased 42 million acres of land in the high wind area of the Midwest. With a royalty of $1000 per acre for wind turbine generators, those billionaires can collect $42 billion per year in rent from US consumers -- for the next 100 years. Of course, the proposed Green electricity will have to be carried long distances to major cities on the East Coast – which is why electricity transmission giants like Exelon have seen their stock price RISE 50% this year while the S&P 500 is down almost 20%. 7) The $650 Billion per YEAR for Green Energy Transition will be paid by the American People. Part of it will have to be paid by our poor, our sick, our elderly and our children – in the form of major real cuts in Social Security, Medicare, healthcare, social services, food stamps and education. The rest will be paid by our 100 million plus households – in the form of much higher energy bills and inflationary price increases for many products. As is already happening. The SEC claims this Rule was requested by some investors -- although it seems to me that it is motivated by a few rich financiers wanting to use government influence to bully corporations into supporting the financiers' political goals. That would be financiers who are bloodsucking parasites versus corporations who actually produce useful products. Why doesn't the SEC also consider the needs and wishes of US consumers who use those products? Consumers who care about the product's cost and quality --not whether the corporate CEO hugs a tree. 8) A further reason why the American People should not be burdened with the heavy costs of a Green Energy Transition forced by this SEC Rule is the explosive growth in our NIIP (debt we owe to foreigners minus what they owe to us). Currently $18.1 Trillion, our NIIP increased $4 Trillion in 2021 alone and is up $15 Trillion since the start of Obama’s term in 2009. Part of the reason Washington has been able to borrow so freely on our national credit card is the dollar’s role as the global reserve currency – but that privilege may change. The dollar’s value is based up our guarantee of Saudi Arabia’s security in exchange for the Saudis requiring that oil be purchased with dollars. But look at the map – President Biden’s recent withdrawal from Afghanistan gives China a clear land corridor to Iran and Iraq. When Chinese military forces are on the nearby Iranian coast, the Saudis will accept Chinese yuan for oil, China will no longer need dollars, the dollar will lose its value and China will no longer feel inclined to sell us products cheaply or give Washington $Trillions more in loans. Especially since Washington’s sanctions against Russia has shown that any dollar assets can be stolen at will. 9) Dealing with climate change has always depended upon the major economies cooperating to prevent cheating that would let cheaters benefit from cheaper fossil fuels. However, Washington’s recent actions has destroyed international cooperation: a) EU carbon taxes don’t influence Russian actions if Russian exports are already blocked by sanctions b) China’s leaders would burst out laughing if the SEC tried to order Chinese corporations to comply with File S7-10-22 and make climate disclosures. SEC has no way to determine how Chinese exports will benefit from the massive quantities of Russian fossil energy that Washington has now diverted to China. How can US corporations compete with China if they are hamstrung by a SEC regulation that Chinese corporations can ignore? How can the US economy and the Pentagon compete if we are hamstrung by energy shortages or high energy prices that do not afflict our enemies? c) Russia benefits in several ways from global warming. It is now able to grow huge amounts of wheat instead of having to import it. The melting of Arctic ice is creating a short Russian maritime route between China and the EU that will support massive shipments while avoiding the long routes through the Suez and Panama canals. Why should Russia listen to US climate czar John Kerry? d) Washington has no way to enforce international climate agreements -- not even the vague promises that some countries made at the recent COP26 to move away from coal in the far distant future. 10) While climate change will adversely affect some parts of the USA, other parts in the north will benefit. The question of how to respond -- mitigation versus adaptation via internal migration – is complex and one the SEC is not competent to address. The News Media has been strangely silent re who gains and who loses. The sobbing reports of threats to ocean front property, for example, have not noted that few poor and working class Americans own ocean front property. Nor are many of them positioned to collect rents on solar farms, wind turbine real estate or $650 billion/year government climate projects. The SEC hilariously holds up the California wildfires as an example of a climate risk that should be reported. But how is a corporate manager supposed to foresee that a few individual arsonists will exploit a stupid government forestry management policy that let flammable debris accumulate over decades? SEC rule suggests agricultural companies report climate change’s adverse impacts such as drought. But what about the adverse impacts on food production of diverting 2.7 million flat acres on the East Coast into solar farms? How is an agricultural company supposed to predict and report massive soil erosion from rainfall running off the impermeable cover of a solar farm located uphill from it? 11) It is true that some foreign nations will suffer from climate change – but much of their problem is due to them having populations far in excess of what their land can support. America has no obligation to help them. US birth rate is roughly 1.5 kids per couple because our economy makes it difficult for most American couples to rear even one child. In Africa, meanwhile, the birth rate is roughly 7 kids per woman. Yet the word “overpopulation” does not appear within the hundreds of pages of the United Nations IPCC AR6 report. 12) In closing, what investors need is a detailed roadmap from the Congress showing clear decisions and commitments on how we will respond not just to climate change but also in the context of our other challenges (Cold War 2.0, aging population, debt,etc.). Including how we will obtain the massive quantities of raw materials needed, the specific technology we will implement, how the response will be funded, how the burdens will be shared, what tradeoffs will be made and why the American People will benefit compared to the alternatives. The greatest risk investors and our corporations face is political risk -- chaotic, constantly changing, muddled and poorly considered laws and regulations that waste huge amounts of wealth , cripple national power, increases our poverty, increases our debt and undermines our ability to compete. A risk which this SEC Rule does nothing to reduce and much to increase. The SEC does not have the power to impose climate reporting requirements on our foreign competitors -- as was tacitly admitted by the SEC within this Rule. Absence of such a requirement will give our competitors an advantage over US corporations in attracting global capital. Where has the Senate approved a treaty with all other nations to establish the same reporting requirements on our competitors as the SEC is imposing on US corporations?