Another meaningless virtue signal

Stuff reports:

Fossil fuels and illegal weapons will be excluded from all future Kiwisaver default funds.

The changes announced on Saturday mean investments in fossil fuel production and illegal weapons will be excluded from future KiwiSaver funds that are default providers.

There are currently nine default fund providers, and their terms expire in mid-2021.

This is typical of this Government. A policy that achieves nothing to distract from their total failure to actually lower greenhouse gas emissions.

Having default KiwiSaver funds won’t lead to even one less chunk of coal or litre of oil from being extracted. Fossil fuels will continue to be supplied so long as there is demand for them.

If the Government hiked the price of petrol by 50 cents a litre, that would lead to a reduction in fossil fuel extraction as demand would drop. But that would be unpopular (yet effective) so instead they go for something totally ineffective.

The irony is that this move, if it has any effect at all, will be to increase the yield for those investing on fossil fuel companies.

The share price for fossil fuel companies may drop very very slightly because of this. The profit made by those companies will stay the same. This means the profit to price ratio or yield will increase very very slightly.

So the overall impact of this move is:

• Impact on greenhouse gas emissions – zero
• Impact on share prices of fossil fuel companies – a minuscule decrease
• Impact on yield of fossil fuel companies – a minuscule increase