Jeremy Grantham on Climate Change

Richard T. Stuebi

Jeremy Grantham is one of the world’s most successful investors, over a very long period of time. He founded Grantham Mayo Van Otterloo in 1977, which now manages $100 billion of capital for sophisticated investors from around the globe. He tends to take positions for his clients that anticipate the formation of bubbles and defend against their collapse. His quarterly newsletters are extremely well-written: thoughtful and deeply researched. In short, he’s someone who’s thoughts matter, and the thoughts of his readers also matter.

So it’s with extreme interest to me that Grantham devotes pages 7 and 8 of his most recent quarterly newsletter to the issue of climate change. It’s well worth reading. He breaks down the topic in a way reflecting the mind of a long-term strategist who is smart enough to understand risk-reward tradeoffs in a world of imperfect information. And, of someone who is deeply concerned about the environment — as reflected by his founding of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

His closing paragraph is both stunning in its sweep and unsettling to those of us in the cleantech capital markets: “Global warming will be the most important investment issue for the foreseeable future. But how to make money around this issue in the next few years is not yet clear to me. In a fast-moving field rife with treacherous politics, there will be many failures. Marketing a ‘climate’ fund would be much easier than outperforming with it.”

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

2 replies
  1. Anonymous
    Anonymous says:

    Global Warming is real and so is Excess CO2 emissions I believe they are separate birds. The problem with excess CO2 emissions is their effect on Ocean chemistry. The stratification of the worlds Oceans has effected the solubility pump causing CO2 to enter as Carbonic acid. The Oceans are in dire straights the Southern Ocean gives off more CO2 than it sequesters. The Oceans are becoming more acidic. New Dead zones appear yearly. The stratification is preventing natural upwelling starving phytoplankton of needed nutrients. If the phytoplankton succumbs to the elevated temperatures and elevated acidity we will struggle to survive.I have a solution to both problems. We have patented a Mechanically Produced Thermocline Ocean Temperature Regulatory System using our patented turbine design. We propose to pump cold water to the surface to promote Phytoplankton growth. The resulting cold water thermocline will cool the air resulting in lower temperatures.

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