Target $18.72, page-6575

Hey sorry for the delay - I tend to get quite busy through the week. As for the engagement - no problem and thank you to you also. If we cannot engage respectfully we end up in a bad place. We don't have to agree, but it is useful to understand the perspective of another.

I have to say, as a WHC shareholder, watching the stock gun this week has been a real pleasure.

Interestingly, and I know a lot of people are concerned about pollution of the thread, but it is important to help understand the context of institutional thinking in the market. When I review WHC in light of consumer and broader sentiment, there has been a subtle change in the "talk" around different investment tables. From almost a blanket ban on investment in coal, there has been a shift that I noticed as recently as last week, with some senior players suggested that finance is still frowned upon, but the impediments are reducing. Given the financial position WHC are in, they have introduced an important level of insurance against the drying up of capital, and it will be very interesting to see how this plays out, given the projects they have on their books.

This was a surprise to me, but a very import shift in commentary.

Which leads to the 'why', which is where this discussion is important, as more information is becoming available.

I don't believe there is any contention with the fact that CO2 has the ability to reflect heat. It is quite predictable and the calculations are pretty reliable. Obviously, the issue is considerably more complex than that.

Which leads nicely to your link. I first saw this quite a while ago. In the detail of that document it states "Thus, an evaluation of model projection performance should focus on the relationship between the model forcings and temperature change, rather than simply assessing how well projected temperatures compare to observations, particularly in cases where projected forcings differ substantially from our best estimate of the subsequently observed forcings." (the underline is mine).

Actually, that is absolutely the only thing that is important. We are making decisions based on the projection of these models. In fact, as the researchers state, they have adjusted for forcings. This is not a prediction, this is retrofitting, and invalid if we are to use this as a basis for decision making.

To be able to make decisions, there needs to be a stated prediction that is demonstrated to have accurately occurred, that is repeatable (we do this, we get that), and can be clearly attributed to AGW. I still have not seen this. There are simply too many variables.

Then to the point of materiality. If such a prediction appears, that can clearly state that a threshold of X demonstrates an impact of Y, (if Y is for example 3 degrees)...then we have to move to the "so what" test. If it does increase, so what? There has, to date, been no, significant, negative impact, as a result of a predictable AGW action.

We know, for certain, that humans will survive - we adapt, and a few degrees won't hurt. What about the environment around us? Who knows? We have no data to base anything on. Any prediction to date has been demonstrably false.

What we do know, and this is essential to many of our current investments, is that the current grid in Australia will require in the order of $7T to move from its current state to 100% renewables. And that is only for current demand, which we know is increasing.

We also know that we are unable to state the outcome of that spend on the thing we are trying to influence (the climate). So, what is the sense in the investment?

It is for this reason that coal will be with us for quite a while now. It is established, cheap and works with our infrastructure - and that of the WHC customers. We see more and more countries starting to acknowledge what science and economics already tell us:

1. We can't accurately determine a catastrophic outcome (even if we can calculate the reflectivity of increases in CO2)
2. We can measure the cost required for the risk mitigation (despite not being able to risk rate it)
3. We have no mechanism to determine if the spend will mitigate the risk anyway, but we have significant quantifiable data to suggest it will have zero impact (Australia is too small)

So - we think we have a risk, we don't know how big, or what the impact will be, and if we spend truly astronomical amounts money, we can't do anything about it.

Unless you can see how we can answer (1) - what is the materiality and what is its impact, and can demonstrate that (3) is incorrect, what on earth are we doing?

I'll stay with WHC.