Grantham on cooking the planet

Find below another fantastic video of Jeremy Grantham on global warming, Malthus and other doomsday scenarios. It really is disturbing when such an eminently smart guy gives it to you straight. Not to be missed.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.


  1. As a numbers man, he does mention that global fertility has approx halved but does not realise that peak population is more than likely this century due to the demographic paradox. There are some long range forecasts by the UN that have global population at 3 billion by 2300. So much for those population alarmists…..

    He also does not seem fully aware of Thorium.

    ‘Older people have to work harder’….

    ‘A great surge of debt blew up the property bubble’…..

    ‘ I would have let a few of the big banks go’…..

    • From the Sept. 2012 UK Govt National Nuclear Laboratory report on Thorium:

      In summary, in solid-fuel, water-cooled reactors thorium nuclear reactors (which some countries are working on) still produce a waste product that lasts an extremely long time and is very toxic; are an an easy terrorist target or source of bomb-making ingredients; and don’t seem economically efficient to develop.

      Other unstated downfalls of at least some (if not all) thorium reactors include: extreme susceptibility to disasters, including droughts; and truly unknown longterm effects on life via the regular releases of very small quantities of radioactive elements.

      • And incidentally, AFAIK there no working thorium molten salt reactors at present. None.

        Another Castle in the Air. 🙄

        • “The Chinese aim to beat them to it. Technology for the molten salt process already exists. The Oak Ridge National Laboratory in Tennessee built such a reactor in the 1960s. It was shelved by the Nixon Administration. The Pentagon needed plutonium residue from uranium to build nuclear bombs. The imperatives of the Cold War prevailed.
          The thorium blueprints gathered dust in the archives until retrieved and published by former Nasa engineer Kirk Sorensen. The US largely ignored him: China did not.”

          China blazes trail for ‘clean’ nuclear power from thorium
          The Chinese are running away with thorium energy, sharpening a global race for the prize of clean, cheap, and safe nuclear power. Good luck to them. They may do us all a favour.

          • Commercial nuclear power station
            India’s Kakrapar-1 reactor is the world’s first reactor which uses thorium rather than depleted uranium to achieve power flattening across the reactor core.[37] India, which has about 25% of the world’s thorium reserves, is developing a 300 MW prototype of a thorium-based Advanced Heavy Water Reactor (AHWR). The prototype is expected to be fully operational by 2013, after which five more reactors will be constructed.[38][39] The reactor is a fast breeder reactor and uses a plutonium core rather than an accelerator to produce neutrons. As accelerator-based systems can operate at sub-criticality they could be developed too, but that would require more research.[40] India currently envisages meeting 30% of its electricity demand through thorium-based reactors by 2050.[41]


        • So R2M, none? Really? As an AGW supporter I would have thought you would welcome Thorium as a green solution.

          • A report from the UK’s National Nuclear Labs (NNL), based at Sellafield, was pretty dismissive of the thorium option- it would take years to develop land there weren’t many obvious benefits, given that uranium was plentiful.

            NNL estimated that it would be likely to take ‘10 to 15 years of concerted R&D effort and investment before the Thorium fuel cycle could be established in current reactors and much longer for any future reactor systems’. It went on ‘Thorium fuel concepts which require first the construction of new reactor types (such as High Temperature Reactor (HTR), fast reactors and Accelerator Driven Systems (ADS)) are regarded as viable only in the much longer term (of the order of 40+ years minimum)’.

            What about the thorium breeder concept? NNL says ‘The use of thorium in place of U-238 as a fertile material in a once-through fuel …only yields a very small benefit over the conventional U-Pu fuel cycle. For example it is estimated that the approach of using seed-blanket assemblies (the blanket being the surrounding fertile thorium material) in a once-through thorium cycle in PWRs, will only reduce uranium ore demand by 10%. This is considered too marginal to justify investment in the thorium cycle on its own.’

            And on the alleged avoidance or reduction of proliferation risks NNL says ‘Contrary to that which many proponents of thorium claim, U-233 should be regarded as posing a definite proliferation risk. For a thorium fuel cycle which falls short of a breeding cycle, uranium fuel would always be needed to supplement the fissile material and there will always be significant (though reduced) plutonium production’.

            On the economics, NNL says that ‘while economic benefits are theoretically achievable by using thorium fuels, in current market conditions the position is marginal and insufficient to justify major investment. There is only a very weak technical basis for claims that thorium concepts using seed-blanket PWR cores will be economically advantageous. The only exception is in a postulated market environment of restricted uranium ore availability and thus very high uranium prices. This is not considered very likely for the foreseeable future.


        • Existing thorium energy projects
          The German THTR-300 was the first commercial power station powered almost entirely with thorium. India’s 300 MWe AHWR (pressurized heavy water reactor) reactor began construction in 2011. The design envisages a start up with reactor grade plutonium which will breed U-233 from Th-232. After that the input will only be thorium for the rest of the reactor’s design life.[42]
          The primary fuel of the HT3R Project near Odessa, Texas, USA will be ceramic-coated thorium beads. The earliest date the reactor will become operational is in 2015.[43]

        • China is building one right now.

          Several have been built in the past – the number one problem with them is their lack of weapons grade material – they are one of the most heavily lobbied against of all the technologies by almost every sector – and yes they are viable yes all the hype is true.

          Thorium is the future of nuclear outside fussion.

          • As I said, there are no working commercial Thorium reactors right now. They will have the same problems as other nuke reactors: proliferation, waste, cost, delay.

            Not the answer.

          • R2M
            The German THTR-300 was the first commercial power station powered almost entirely with thorium. India’s 300 MWe AHWR (pressurized heavy water reactor) reactor began construction in 2011.

          • Wassa matter with you, man? The THTR-300 was shut down. Everything I have written is accurate.

    • Demographic paradox? WTF! A forecast of population in 2300 is meaningless. The usual half baked demographix crap you peddle.

      • Perhaps you should google ‘demographic paradox’ and educate yourself about demographcs before calling ‘crap’

  2. For a Vegemite-centric view: Grantham comes out in support of pink batts, smart meters and budget deficits. (~45min mark)

    “…If you have people unemployed go and do useful projects to employ them […] go and insulate every cold area, it will have a high societal value, you’ll never regret it […] redo the grid system, you’ll never regret it […] debt is vastly exaggerated”

  3. General Disarray

    His view on markets makes much more sense than the ideological nonsense that plagues so much business commentary.

    We need more thinkers like Grantham.

  4. Grantham makes gives good argument but like PhilB above loses me a little when joining the ‘extreme weather is global warming’ chorus.

    Plus I reckon he’s looking mortality in the eye giving rise to tendency to see ‘the end’ everywhere.

  5. GunnamattaMEMBER

    ‘Being bullish sells. You will not easily hear honest advice when it is bearish.’

    ‘I would rather stimulate the economy directly through the fiscal system than play games with the monetary system.’

  6. That was fantastic – from whoa to go.

    “debt in the long run is not as significant as people think… distracts us from the real world… are you being inventive, training etc”

    nothing like having you core understandings smashed by a guy much smarter than you!

    And boy is there a message there for the unfettered development enthusiasts:

    “propaganda has been suburb – have they no grandchildren these people”.

    Wonderful stuff from a great deep thinker real analyst.

  7. yesss phill…… on a geological timeframe we all end up as fossils. i’m thinking you have got there ahead of schedule.

  8. Hmmm. Watched it all, can’t understand the fuss. Yes, he is thoughtful, dignified, and eloquent. But I’m afraid that I didn’t hear one genuinely original thought or insight. Everything said, has been said by various others too, at some point, and in many cases, repeatedly.

    Most interesting observation he made, was more of an anecdote anyway – his lecture to the 1,200 financial analysts/traders resulting in these “people who were doing the dirty work” near-unanimously acknowledging agreement with him that a bear market was inevitable, and yet, their bosses preached the opposite to clients and the media … “You will not easily hear, honest advice when it is bearish”.

    No surprises to this cynical little black duck, but interesting nonetheless to hear someone of Grantham’s stature testifying to the truth of it.

    Finally, I think he is dangerously wrong in downplaying the significance of debt. It would appear that he cannot see by far the biggest bubble of them all (“money”). Somewhat like a fish being unaware of water, because it is his whole world.

    • +1
      Why do I get so sick of hearing all the Green bollocks when:
      1) Birth control is taboo;
      2) Just keep borrowing, rely on population growth to make you a few bucks, get your rental property now and f*** the next guy;

      Next time you’re at an airport, watch the human race at work collecting their luggage at the baggage carousel. The rules are:

      Crowd the belt so:

      1) You can’t see your bags because everyone is trying to do the same thing;

      2) You have to push people aside to get your case off the carousel;

      If we all stood back 3 meters there wouldn’t be a problem.

      The smart money is on the insect world where the next 2 million years are concerned.

      • Mining BoganMEMBER

        None of us go near the baggage carousel. We all carry one backpack with us. Contents being mp3 player, tablet and one Unique Cars magazine. Possibly a UFC jumper.

        Baggage carousels are for those with one home only.

        • Ohh like wow dudes – I’ve been too mine site too – just don’t it t the front where the props are noisy.

          As a rule of thumb – if you need to go to the site then you re way way way down the pecking order.

        • I question Mining B has seen a site in some time… (not sure MB just a feeling) I’ve done my stints in Africa and South America – long haul FIFO!

          Go to Perth Domestic, you’ll see what we mean.

        • Mining BoganMEMBER

          Never claimed to be anything but a bottom feeder aj.

          I know my place in the world. That’s the problem with everyone else but me. They don’t.


        • I am not mining 3d – but I loved the yarns from a gold miner that had done time in Korea – drinking vodka by the glass etc. bloody cold too by all accounts.

    • desmodromicMEMBER


      As in many intellectual pursuits, the truth when spoken always seems obvious and unoriginal because many of us have already mulled over some of the parts. However, the power in what is being said comes from how the parts are linked in time and space. Grantham is the first market person I’ve heard that has explicitly recognised that for the current model of human existence to continue we must deftly manage demand and use of a few finite resources. That we have mostly failed to do so since the start of the Industrial Revolution and increased our numbers six-fold while doing so is rightly cause for concern.

    • Op8 – your disdain with usury is clouding you on this one. Usury is as old as humanity and always part of the economy. Tax, usury and prostitution – old as life itself.

      G’s point is anti- debt – debt is irrelevant, just numbers on a page.

      • No. Grantham is wrong. Debt is not irrelevant.

        Yes, in one sense it is “just numbers on a page”. One that I wholeheartedly agree. But he misses the most vital point, that a debt-as-money-at-interest “money” system … where the interest is not created, only the principal, in the form of loans… means, by definition, a world of artificial scarcity, and of exponential “growth” thus resource depletion, as more and more “just numbers on a page” have to be issued to keep the “growth” moving up and repayments on loans coming in to the bankers. The debt-money system reduces humanity to an increasingly low-virtue, immorality-riven competition for money between individuals and groups. The “smartest”, the “cleverest”, and the most conscience-free, win more and more of the pie, leaving ever more with nothing.

        BTW, there are plenty of examples throughout history where taxes and/or usury either did not exist at all, or, were applied in a very different (and egalitarian) manner. It well suits the beneficiaries of the present status quo to have most folks believe taxes and usury are “normal”, and/or “necessary evils”. It’s BS.

        Read “Debt: The First 5,000 Years” by David Graeber as a primer.

  9. Don’t forget kids…

    Resource sector lobbying actively at the highest level for the status quo of dirty energy and making squillions in the process = heroic, inspirational, job creating, nation saving entrepreneurs beyond reproach

    Alternative energy sector lobbying actively at the highest level for alternative energy sources and making squillions in the process = dubious, money grabbing, valueless, progress hating, NIMBY hypocrites

  10. What possible relevance is this? The climate is changing rapidly and irrevocably, bringing widespread and far-reaching economic destruction.

    Instead of regurgitating the Rolling Stone, why not ask what should be done to arrest further destructive climate change?

  11. Phil,

    Generally love your work. But “I hate bankers” is not an argument against the existence of climate change and I’m sick of deleting them so it’s 24 hours off for you!

  12. China’s molten salt thorium reactor program was established by The China Academy of Sciences (CAS) at the Shanghai Institute of Applied Physics (SINAP) in 2011. SINAP apparently has about 400 researchers working on this program with about 100 more at four cooperating CAS research institutes. Program researchers pretty much “cleaned out” Oak Ridge’s experience with this technology as a starting point.

    The China MSR program is targeting small (~2MW thermal) pilot molten slat cooled and then molten salt fueled reactors – probably in the 2017-2020 time frame, with subsequent scale ups to ~10MWt pilot and then ~100MWt commercial demonstration reactors.

    This program is headed up by one of the CAS vice chairs – Dr. Jiang Mianheng, who is the son of a former China president – both suggesting this is a serious program.

    The SINAP program appears well conceived and resourced and with a potentially realistic schedule. If successful this program could lead to commercial technology in the 2025-2030 time frame, but probably not sooner.

  13. That was a very interesting interview.

    We still have long way to go before the messages about debt and the misuse of low interest rates and monetary policy in general, penetrates the grey matter of most policy makers (RBA in particular) and commentators down under.

    Unfortunately, most of them learnt their economics during the 1970/80s when the great debt mountain (and the industries that feed on it) started rising from the plains and they struggle to see beyond this paradigm.

    Time to allow the soft rain of higher interest rates commence the slow (decades long) process of eroding debt mountain.

  14. Always have time for Grantham. Slightly baffled by his oil prices. He says oil was $16.00 for 100 years until 1974, then jumped around for 30 years and is now at $85 and it won’t return to $16.00. Check those nominal prices on the US inflation calculator and oil at $16 in 1970 is $95 in 2013. What’s missing or has Grantham elided an element in the argument on real prices?