By Alejandro A. Tagliavini *


The most discussed issue in Davos – by the way, a forum believes itself “pro market” when infested with regulatory bureaucrats – is the possibility of a “green swan”. The Bank of International Settlements states, in a document entitled “The Green Swan,” that climate-related events could cause the next financial crisis.

“Green swan” comes from the “black swan” that became popular during the financial crisis of 2008 and refers to an unexpected and surprising event with an important effect, popularized by the mathematician Nassim Taleb with his book “The black swan: the impact of the highly unlikely ”.

The immediate transition of the entire system, which is required against climate change, could have effects that would affect each actor in the economy and the price of each asset,” says Deutsche Bank, adding that “we will enter a stage in which will produce an understanding of the immense economic and personal concessions that we will have to make ”. I wonder what will happen when those who campaign against the oil companies, for instance, see the cost of transport greatly increased because of the regulations and prohibitions they promote?

That is, many investors and companies are thinking in terms of “the new realities,” given global warming. But what if the “black swan” occurs, that is, if climate change does not occur? It is not my intention to discuss the theory of warming, but what would happen to these investment trends and changes in regulations and companies if the change does not occur?

If we rely on mathematical probabilities, the possibility that a catastrophe does not occur is very big. The announcement of calamities is a classic of humanity that has its depressive and fearful tendency, from the Apocalypse and before too.

Just to name a few cases, in 1803 Malthus said a global famine would ensue because the population grew faster than food. In 1966, they claimed that oil would last only 40 years and in 1970 that the world would end its natural resources by 2000. In 1974, satellites “showed” that an ice age was approaching and the scientific consensus Planet Cooling announced imminent famines . In 2008, Al Gore “predicted” that, due to climate change, the Arctic would run out of ice in 2013.

Everything turned upside down. Thus, the “green swan”, mathematically, may well not occur and, therefore, in my opinion serious investors should bet on “black”: that climatic catastrophes will not occur. So the theory that global warming exists – prior to the Age of Glaciers – and is a natural phenomenon that man does not influence can may be true. Credible theory or, rather, it is unbelievable that the tiny human being can distort the development of the infinite mother nature. Only politicians, who believe themselves to be gods, have so much pride.

And exagereted pride ends in violence. As I said, I am not going to discuss the theory of climate change – beyond stating what I think is credible – but it is important to make it clear that there is no right to be violent. Those who believe that climate change is due to human acton, should know that science – if they really are following it – is always wrong, to a lesser or greater degree. Ergo, they have no right to violently impose – with the police force of the State – their ideas – their regulations – that could cause much harm.


* Senior Advisor, The Cedar Portfolio