By Mitchell Beer
In this hour-long interview with TV host Charlie Rose, legendary money manager and investment analyst Jeremy Grantham cites the decline in fertility rates and the rise of renewable energy as his two sources of hope for civilization.
Grantham, co-founder and chief investment strategist with Boston-based Grantham Mayo Van Otterloo, famously predicted a series of market failures, including the U.S. housing bubble of 2007/2008, the turn-of-the-century dot.com crash, and the Japanese equities and real estate bubble in the late 1980s. He told Rose he does it by focusing strictly on the numbers, rather than the gut instinct that drives many money managers.
Today, those numbers tell him that unburnable carbon will be a serious challenge for money markets—since the only plausible alternative is for fossil fuel production to drive climate change out of control. Grantham said he opposes the Keystone XL pipeline because “the carbon math is pretty simple.” The world’s proven oil and gas reserves already far exceed the global carbon limit of 565 Gt, so “by licencing that pipeline… we’re going to start facilitating the flow of such utterly dangerous energy resources that we have no reasonable hope of surviving with the planet as we know it.”
He cautioned against blind faith that science will solve the climate crisis, noting that our deeply-held confidence in technological solutions is itself a product of the fossil fuel era: before humanity began digging coal and pumping oil at the turn of the 19th century, population growth and human development rose and fell with the availability of food supplies.
As the fossil fuel era enters its twilight, renewable energy development is where Grantham has the greatest hope for technology. “Solar, wind power, storage, a new, state-of-the-art grid system, all of those suppress the need to use our finite resources, and that is wonderful,” he told Rose. “The cost of a solar panel has dropped in two years to 25 cents on the dollar. These are Moore’s Law-type reductions, the kind of efficiency increases we only saw in semiconductors.”