One of the main critics of government investment in renewable energy in Scotland – the Citigroup investment bank – failed to predict the financial crisis, was one of the four banks most involved in and hardest hit by the sub-prime mortgage crisis – and invests heavily in tar sands, oil and coal (1). Given it’s inability to know what it should invest in itself in it’s own area of expertise – banking – why should anyone accept Citigroup as experts in an entirely separate area – energy policy?
The New York Times website reports that Citigroup required not one but three government bail-outs in the US, totalling $45 billion. The US Securities and Exchanges commission also charged Citigroup with telling investors it had invested only $13 billion in subprime mortgages, when the real figure was $50 billion (2).
This makes me less inclined to take their advice on anything. These are bankers who can’t run a bank and lie to investors, offering advice (with likely ulterior motives) on energy policy – something they have no expertise in.
Their other ulterior motive is likely to be their own heavy investment in coal, oil and tar sands compared to a relatively tiny stake in renewable. The Rainforest Action Network found that in 2010 Citigroup invested $34 billion in the former and less than 2% of that amount in renewables , including heavy investments in tar sand projects in Canada (3).
It could well be that some of the investment banks who are writing reports praising the Scottish government’s renewable energy targets also have ulterior motives (perhaps having invested in renewable themselves) and wanting to promote them as a result.
There are other more reputable groups criticising the Scottish government’s renewable energy target of 100% by 2020 as being unrealistic and likely to increase fuel poverty – like the Institution of Mechanical Engineers - but I still wouldn’t trust a company with a record like Citigroup’s to advise me on picking my nose never mind on energy policy.
(1) = CNN 15 Oct 2007 ‘Citi profits tumble as execs scramble’, http://money.cnn.com/2007/10/15/news/companies/citigroup_earnings/index.htm , ‘Citigroup is among a handful of banks that have been hard hit by this summer's subprime mortgage crisis. Three other banks - JPMorgan Chase (Charts, Fortune 500), Washington Mutual (Charts, Fortune 500) and Bank of America (Charts, Fortune 500) - are scheduled to report quarterly results this week.’
(2) = NYT.com Business 19 Oct 2011 > Companies > Citigroup Inc, http://topics.nytimes.com/top/news/business/companies/citigroup_inc/index.html
(3) = Dirty Oil Sands blog 11 Mar 2011 ‘Citi needs an intervention’ By Brant Olson | Rainforest Action Network, http://dirtyoilsands.org/blog/article/citi_needs_an_intervention
(4) = Institution of Mechanical Engineers ‘Scottish Energy 2020? A target too far?’,http://www.imeche.org/Scottish-Energy-2020?WT.mc_id=HP_110661