Looking after the climate change Big Picture by supporting people and managing fossil fuel production

1. WHO'S LOOKING
AFTER THE BIG
PICTURE?
Fossil fuels need stewardship
info@rethinkingchoices.com

2. Since Kyoto our energy use per
capita has increased by 18.6%
from 63.6 Gigajoules to 75.4
gigajoules per capita to 2019. At the
same time, our fossil fuel share only
dropped by 3% from 86.2% to
83.2%. With 2 billion more people
since 1997, even with renewables
increasing by 1,350% we have in
every way become more
dependent on fossil fuels.
With over 83% of our energy
coming from fossil fuels, and
using 100 million barrels of oil per
day, cutting fossil fuels by 1%
means taking away the entire
energy consumption of Malaysia for
a year.
Continuing fossil fuel use is increasing
our atmospheric CO2.
As 2021 and 2022 is showing us,
impacts from storms and changing
weather are affecting our
economic resilience, impacting our
government fiscal situation,
household budgets, insurance
capacity, supply chains and
economic output.
WE ARE ALL DOING WHAT WE CAN
BUT WE ARE STILL FACING A TICKING TIME BOMB
# We need a way to limit fossil fuel use
without hurting people
info@rethinkingchoices.com

3. # Governments face the same conflicts as everyone else;
they do not have magic bullets
Governments face pressures from all sides. They cannot ban fossil fuel use
because we are totally dependent on them, and their own budgets to support the
energy transition still relies on a fossil fuel enabled economy.
info@rethinkingchoices.com
Increasingly, electorates and businesses on all sides are finger
pointing at governments to relieve them of their own responsibilities,
calling for action to support their different fragmented interests.
With people lacking patience and with
no willingness to accept any imposed
costs themselves, and with all
governments facing deteriorating
finances globally, coordinated
political action on fossil fuels is
virtually impossible.
Climate events are increasingly threatening the stability of
the developed world's economic system as insurance and
emergency response costs break new highs and risk
becoming unaffordable.

4. Businesses have made big
strides in acknowledging and
accepting their roles in fighting
climate change.
However, even with the carbon
intensity of each business
reducing over the pasts years,
their aggregate emissions
have still increased as
activities increased and
moved from region to region.
Carbon pricing is three times
cheaper in California at than in
Europe. This creates
opportunities for three times the
emission to be bought for same
amount of money and prompts
innovations to focus on
exploiting the difference.
Controlling fossil fuel supply
drives innovations uniformly
to finding alternatives.
If we use too much fossil fuels,
whether we get to net-zero or not,
we will still go beyond 2° warming.
To prevent going beyond 2° by 2050, we
need to reduce CO2 emission by 1.4
billion tonnes a year, every year.
In 2020, the Covid pandemic brought
global lockdowns and travelling bans.
This reduced CO2 emission by 1.9 billion
tonnes. As a comparison, the 1.4 billion
tonnes reduction we need is like asking
for a 9-months lockdown every year to
2050.
The risk is without explicit
restriction on fossil fuel supply we
simply breach the carbon budget.
# It's about protecting the carbon budget
Source: Met office
COP 26 Science Pavillion,
Global carbon budget
info@rethinkingchoices.com
Tradingview.com

5. # Whoever controls fossil fuel production will
control our future
We use 580 Exajoules of energy
globally a year, enough for 2 billion
Saturn V rocket trips to the moon*.
In 2020, we used 557 exajoules of energy globally with 83% of this
provided by fossil fuels. Total CO2 emission was 37.4 Gt of CO2 with 93%
from fossil fuels. Fossil fuels further contribute directly to significant
methane emissions and indirectly to emissions from other sources.
Even in a lockdown year, fossil fuels dominated our energy and
emissions. 2021 sees us back at peak levels: CO2 emissions are
estimated at 39 Gt of CO2 and energy use at 580 exajoules.
With this much energy provided by fossil fuels, reducing CO2
emissions by 1 Gt means taking offline 13.5 exajoules of energy –
the amount of energy Germany uses for a whole year.
We need to repeat this reduction year after year for the next 39
years, and we will still have breached the carbon budget for the
1.5° target and will be closer to 2° of warming.
All this is BEFORE considering the additional energy we will need to build
the new infrastructure for net-zero.
83% OF OUR ENERGY COMES FROM FOSSIL FUELS
Annual energy use by country
WHOEVER CONTROLS FOSSIL FUEL PRODUCTION
WILL CONTROL OUR FUTURE
FINANCIAL OWNERS WILL ALWAYS PLACE MONEY AHEAD
OF PREVENTING THE NEXT ENVIRONMENTAL DISASTER
Even when laws are in place,
when the final owners go
bankrupt the failures of
decommissioning fall back on
the environment and the tax
payer.
Major oil companies are increasingly
responding to public pressure by
selling off fossil fuel assets to
financially motivated investors.
Shell's oil divestments in 2021
It does not matter who owns
fossil fuel asset, their end of life
will still need looking after.
info@rethinkingchoices.com
*www.quora.com/How-much-fuel-does-it-take-to-travel-to-the-moon

6. # Transformational Ownership transforms fossil fuels
ownership into stewardship
Do your part. Please email us at thebigpicture@rethinkingchoices.com

7. HOW
DOES IT
WORK?
Transformational Ownership takes over fossil
fuel producing companies and commits them
to reduce production at a pace guided
independently by science and economics. It
distributes the dividends from the companies
to support local projects nominated by
people throughout the world.
A ROLE FOR ASSET
MANAGERS
Science through the IPCC and other independent organisations
provide guidance on the safe range for reduction to protect
people and the environment.
A ROLE FOR
BUSINESSES
People are the Transformational Owners. They are the ultimate
beneficiaries through the projects they nominate and can vote
on the level of reduction within ranges guided by science.
A ROLE FOR THE
FOSSIL FUEL
INDUSTRY
Transformed companies are ethical stewards; managements are
free to continue their business plans in all respects subject to
the reduction in production, providing energy essential to our
decarbonisation, to keep us alive, and generate profits to
support people. In 2021, dividends from the major oil producers
totalled $110 billion.
A ROLE FOR SCIENCE
Asset managers call on businesses to contribute directly to the
Transformational Ownership Fund out of money that would
otherwise be paid as dividends. In 2021, dividends from the
MSCI ACWI companies totalled $1.22 trillion. The market cap of
the major fossil fuel companies is about $2.2 trillion. This
provides sufficient money to bring about a qualified majority
vote to change the memoranda to commit to fossil fuel
reduction. In 2021, if carried out in full, this is a one-off give-up
of 1.74% in dividend yield out of a 19% index total return.
A ROLE FOR PEOPLE
Businesses contributing to this will be publically acknowledged
and praised as accepting the need not just for their own
individual transitions but in ensuring the total fossil fuel usage
does not expand. Supporting this is the clearest and
unequivocal response to accusations of greenwashing.
Recognising the real physical constraint to our planet is the
best way to promote lasting business innovations.
A ROLE FOR
GOVERMENTS AND
REGULATORS
Governments can now sanction fossil fuel producers which do
not comply. This can provide them with revenues and help to
promote behaviour change and address energy demand.
Regulators and businesses can coordinate through reporting to
determine and allocate energy in the most beneficial way.
# Controlling fossil fuel production protects the
carbon budget and strengthens existing efforts for
systemwide change
Do your part. Please email us at thebigpicture@rethinkingchoices.com

8. ABOUT US
Dr David Ko worked for three decades in the investment
industry. He joined LTCM at its inception leaving a
lectureship in physics at Oxford University. Dubbed the
“Dream Team”, the hedge fund dominated the investment
industry with huge returns before taking the world to
financial Armageddon. He was a partner of the ensuing JWM
Partners fund which grew ten times in size before he left in
2007 side-stepping the Great Financial Crisis to return later
to start a macro and liquidity fund under the Janus
Henderson umbrella. He later moved into the equity space to
head research at Horizon Asset LLP.
Richard Busellato is a senior investment manager with
three decades of experience taking investment risks in
hedge funds and financial institutions. He joined Sweden’s
oldest merchant bank in 1990 as a market maker after
university, moving to manage JPBank’s whole balance
sheet, progressing to proprietary trading for Tokai Bank,
before moving to the hedge fund world as a portfolio
manager with Moore Capital. He was a Director at Bank of
America during the Great Financial Crisis in charge of
managing substantial investments and later partner of
LindenGrove Capital with strategies taking advantage of
central banks’ ultra-low rate policies. He joined Horizon
Asset Ltd in 2017 as a special advisor to develop the
business.
Rethinking Choices is a sustainability advocacy co-founded by
David and Richard to provide services to businesses and
communities to face the significant challenges ahead. Coming
from an investment background and having navigated through
numerous financial and real-world crises, they share
fundamentally a risk management approach.
Climate risks cannot be hedged, nor can they be divested or diversified away.
Transformational Ownership is their project to ensure the source of our
climate problems is addressed, using a capital market approach that clarifies
the moral and ethical dilemmas and strengthens our existing climate efforts.
Their Thinking Tools for the Great Warming provides guidance for executives
and businesses on how to rethink your business in the context of "unknown
unknown" risks; their Umbrella for Unscalable Things is a venture to reduce
economic hurdles for people allowing everyone to contribute.
Their book, The Unsustainable Truth, emphasises how investments with too
much money inevitably corrupt our intentions and lead to unsustainable
practices; good comes not from what we do, but from what we don't.
info@rethinkingchoices.com