Wednesday, November 01, 2006

ANZ: Poor Money Management

John McFarlane is a typical community member. A member who wants to do their part in society. To help the world as we know it today and to make to make it ideal for the generations of people he will never see in the future. But he makes one critical mistake in his write-up, something which makes his entire article completely irrelevant, and that is his first sentence:

While the debate among scientists about climate change continues

In other words, he admits (there are few that do so), that scientists are unsure if humans are the cause of global warming, that scientists are unsure if a warming of the planet might be good for us or bad, that scientists are unsure if our greenhouse gasses are warming the planet or if it’s due to natural causes, or even if the globe is warming at all.

But that still doesn’t deter John McFarlane. With no scientific proof whatsoever that our actions will make any difference (either good or bad), he suggests that we should not wait till “conclusive proof” to act. That’s right, we should spend billions of dollars on a hunch. Something that might not be right, might not have an effect, and even if it did, the effect might be even advantageous.

Given that the debate could swing either side due to lack of evidence, there is a significant chance that global warming is not hyped up to what some say it to be. If so, are you, John McFarlane, going to take the blame for the thousands of starving dead in Africa, for example, who’s billions of dollars wasted on global warming could have saved? I agree with you that we should act now, but I also think that we should act on the now. We should focus on today’s problems where our money can be spent rather than spending every penny of it on a scientifically unproven, debatable phenomenon that not even our children’s children will likely see any effects. Does it make sense to spend billions of dollars on the off chance that our offspring 250 years down the track might live a better life, when at the moment thousands are dying from malnutrition?

Whilst I admire John McFarlane’s leadership and commitment to help the planet and make it a better place for countless generations to come, his decision to be part of the movement to spend billions of dollars (which could be better spent elsewhere) on something that has limited scientific justification is what every ANZ financial risk advisor would classify as poor money management.

No comments: