Looking Back at 30 Years of Art, Combatting Climate Crisis

at track sales in the secondary market. He joins us to talk about the firm's Intelligent Report, which looks at changes in the art market of the past three decades. He's back in our Bloomberg Interactive Broker studio. Welcome back, Well, thank you. Thanks kind of wrap up our day. It's been chuck full of news. Tell us little bit about the art market, because Jason I spent a lot of time I feel like talking about alternative assets and certainly

the art market is part of it. What are you seeing in terms of a longer perspective about what's been going on there and in terms of valuations and and trends. Yeah sure, um, yeah, and all report we're looking back at thirty years in the market. And it's actually the time when we started the company, and the market has completely changed since then, I think. Um, you know, now we had over sixty billion and in total art sold per year, and back in the day it was one

one six of that. So the market has grown a lot. Um. We have given the market transparency, We've introduced you know, the art the database um as we have discussed last time also and m and given the market access to price and that helped, you know, the market grow. How

is that transparency changed the market there? Um? Yeah, Well you have to you have to imagine, you know, someone wanting to buy a piece of art in nine and you know he had to rely on you know, the people selling selling it to him, or you know, on friends and can I trust them exactly? So it's it's it's been very, very complicated and and you had actually people profiting from from that in transparency, you know. And yeah, and so you know, giving people access to data is essential,

you know, for any market to grow. And so when you think about especially over the last thirty years, it's safe to say the contemporary art world has radically changed. The values placed on contemporary artists, which the Born Post ninety five. Is that how you uh, sort of how do you define the contemporary art market? Do I have that right? Yeah, that's have that very right, and it's it's it's a it's a very good point. Um. You know, the contemporary market has totally exploded and um and and

it's been driving the entire market a little bit. And in the last thirty years. And you know, in nineteen nine, auction halls has didn't even so contemporary are that notched it? That was what what galleries did and you know they only recently started doing that. And you know that has really completely transformed to market. And why why was that? I mean, what what accounts for that change? Because I think when you say it, it's obvious, and yet the

catalyst is not obvious. What was it? Well, you know, traditionally galleries are you know, it's it's it's sort of their job to discover artists and you know, and to manage their careers and and and to make sure that

they become popular. And you know, auction hallses, you know, typically come in once once you know, they have a market, and you know, and the contemporary market is the market that really has a lot of potential and you know where you see tremendous growth rates, and you know, and and and that's why the auction hall is of course

are interested in it. When it comes to growth, if you look around the world, I mean, I'm assuming it follows the trends where there's wealth creation because I think about how, um, the Asian countries and the Asian markets have become much more involved in the art markets. I think about China, right, we do stories day in and day out about you know, millionaires and billionaires being minted over in China as that economy has become much more

of a capitalistic and and developed economy. So I'm curious what you've seen in terms of who are the buyers where the market, the art market in particular, is really seeing some significant growth. Yeah, sure, it's a it's a good question. Um, the US is the market leader, has always been number one. Yes, Um, China is number two. Third is the UK and together they make around seventy of the total market. And yeah, China particularly was very

very has been very very interesting. You know, if we've seen a lot of growth until about two thousand fourteen, and you know, and since then a little bit of decline, you know, when you know, the government cracked down on corruption. So the middle of the middle market has disappeared a little bit, but you know, in the in the top segment, we even in China still see a lot of demand.

What's also interesting is that China is more and more interested in Western art traditionally, and five years ago even you know, Chinese wouldn't wouldn't even be interested in Western What like, what are they buying? Like, you know, is it, um, contemporary Hackney? Is it? What is it that they want you mean today? Um? Yeah, like the the big the big names, Yeah, Warhol, Hackney and and so on. Yeah.

And what about demographically, I mean, is this a market especially as technology gets introduced, You're able to see online catalogs and whatnot. You don't have to show up at the auction house necessarily. Are you seeing the demographic exchange. We've got a lot of wealth that's created, say out in Silicon Valley by the tech bubble. What what are the sort of contours of who's buying the art? Yeah? Um, I think that a lot of the same people are

buying the art. You know, we um, you know, we have a very strong core of people who are very interested in art and regularly buy and that's always stayed the same. But outside of that, the market has grown a little bit. And you see, you know, of course Silicon Values is one example, and you know, and then other other countries China, Russia and so on. I have to say this art report, it's really comprehensive. I think

it's like something over fifty pages here. But what's fascinating is I think when you kind of get into, you know, who are today's most bankable artists? And you know, is it still in the art market where you want to find And we're talking with Eli Broade about this, you know, and his team that you know, he really went after some artists that weren't necessarily well known but bottle out of their art and they eventually became really well known.

And I'm just wondering, what's the strategy are people are art collectors still looking for that unknown trying to get in on their work early, or is it that in terms of you want to go after those reliable, bankable artists that's where they want to invest. Well, it's it's it's both. But you know what I find very interesting, if you know, looking for artists that are not really famous yet and and discovering them, and you know, and and and you know, and taking a bet on that.

That's that's I think, what what is an interesting of course all the time anytime. Alright. Jacobops is chief executive officer of art Net. They have just released their thirtieth anniversary intelligence report, looking Back, looking forward, and a lot has changed in the art world, for sure. Yeah. Absolutely. I was thinking about the story of the magazine. Recently we profiled an artist, uh and her story. Um, it's fascinating. It's photographs, its drawings, um, but it's also a supplied

demand thing. She doesn't put out a lot of work. She's been known and I forgive me, I forget her name, and I'll try and tweet it out. But it's just interesting to see some of the dynamics. It's not easy being green Daily. Great week this week because all week we've been featuring stories, reporters and guests on climate change. Is part of our participation in the Covering Climate Now initiatives.

It's a global collaboration of more than news outlets to highlight climate change and it's led by the Columbia Journalism School. So with us having said that, Garvin J. Bush is back with us. He's co founder chief investment officer of Green Alpha Advisers based in Boulder, Colorado. Returning to our Bloomberg Interactive Brokers studio. So we have been talking about climate change, and one of the interesting stories I thought was when we talked about renewables and how it's really

become a viable industry. Whereas twenty years ago, thirty years ago, forty years ago, maybe it was kind of a cool thing. It sounded like a nice thing to do, but people were not all in it financially, it didn't quite make sense. That's not the case anymore. Yeah, that's extremely true, Carol. The rise of renewables and the plummeting of the cost of renewables has been dramatic just in the last ten years. You know, you said twenty but it's really been even

more recent than that. And it's and it's all about scale right rights law and a different version of Moore's law in the case of of silicon p V photovoltaic panels, means that every time there's a doubling of deployment, because comes down about and so there's been enough doublings in the last ten years that now you know, the cheapest power purchase agreement the utilities are signing with solar is

under two pennies that kill a lot hour. You know, this comes up against natural gas at five pennies and coal at five to ten. So it's extremely economically an amazing math right there. No, and it's and it's why it makes a fantastic forward investment because if your utility, what do you want to buy twopenny power or fivepenny power because you get to keep the difference because what you can charge your rate payers is mandated by law.

And so you were testifying just recently down in Washington the House Select Committee on the Climate Crisis, and it does feel like, and this goes to your exact point a minute ago, we seem to be at a moment where people are starting to take notice a little bit. And it's not just because of UH initiatives like we're talking about this week, but lawmakers started to get more serious about it. It's not just celebrities being like, hey, save the earth, that's cool, we don't want it to disappear. Um.

Why is that? Because the risks are now so much more apparent. You know, we were talking about how fast renewable energy economics have changed in the last ten years, will so to have the risks associated with the climate crisis. There's so much more evident now that people really are

taking notice. That's that's part one. In Part two is the younger generation that are really going to have to live through the worst outcomes of the climate crisis are becoming politically aware, and so they are starting to make a lot of noise. Well, and you know, I even think about this, it's interesting, you said, because I think

about this from a consumer perspective. We just had an author on a couple of weeks ago last week, I believe, was new book out called Fashionopolis that's really about consumption and production and manufacturing and consumers, especially younger consumers seem to be voting with their feet. That that feels like an investable theme there, right, Yeah, no question between. A lot of the sustainability topics are very investable right now.

It isn't you know, like Carol, like you were saying, with renewable energy, it's a super viable investment right now, not because it's green or green or warm and fuzzy, but because it makes economic sense all across follow the money essentially right, and it tries. But okay, So having said that, I'm just thinking, if I'm running a business and I'm looking at cutting my costs right to improve

my you know, profit structure. If I see that difference between that gas versus solar, why isn't everybody ramping up? Or is it just a case it's not as viable maybe in the northeast as it is in the southeast. Like, what's tell me the dynamics there? As we look at our country and maybe the world, a handful of things going on there. But yeah, one is just the geography. Some places it's windier than others, some places it's sunni

or than others. In the sunniest places, solar makes no sense economically, not just in terms of how will it works, although those things go together. Uh, the same could be said for wind. Now. The other part though, is that there is political structure. There are some places where the local government doesn't want to see it coming and so

they put up barriers to prevent it. So even historically I understand what the wind like, the pushback because they don't want them, you know, you know, off of Martha's vineyard or what have But solar the same reason. Yep. Sometimes it's numbism like that they just don't want to be able to see the solar panels out out their window.

And other times it's a little bit more ideological. You know, maybe it's an older generation that grew up with the fossil powered utility and they just saying that's how the world should be in so they sort of will put up regulatory barriers to to block it. What about lobbying in terms of political by the energy space, and that, of course is a big factor because the fossil energy space still has more money and more political clout than

the renewable energy space forgiving. I mean, everybody's lobbing, but fossil versus Yeah. So speaking of politics, tells about your experience testifying. What were the questions like, what was the tone? What was your takeaway? You know, first of all, I want to compliment Kathy Castor, the congresswoman from Tampa who is the chair of that committee, the House Selight Committee on the Climate Crisis. I thought it was interesting that she wanted to invite an asset manager to testify before

the climate crisis. It shows that she's perceptive, you know, investing where capital is deployed is where the economy flows from. Where you invest is where stuff happens. And she correctly perceives that if you can fix investing, you can fix the economy and maybe solve the climate crisis. Right, And so that's what I told them, you know, they to answer your question directly. They asked me, what's the biggest

risk coming from your industry? And I said, from the investment management industry, the biggest risk related to the climate crisis is that, by and large, my industry is ignoring it. But I also think, you know, it would be interesting to look at the portfolios of various lawmakers too to see how many exposure to fossil energy companies At this point. My guess is they all do. And that's the problem, because it's just so endemic to simply buy an index fund and forget it. You know, the SMP five has

sixty fossil fuels companies. Correct, And if I'm thinking like a fiduciary, I don't want to own the causes of the climate crisis because those are going to be dramatically, Like Mark Carney says, there's gonna be a Minsky moment from the carbon facing economy and they're going to be dramatically repriced at some point. You don't want to be in front of that. It's so fun to talk with you. Thank you so much, Garvin. Great to see you, Garvin J. Bush.

He's a founder, chief investment officer over Green Alpha Advisers based in Boulder, Colorado. Back in Oar, Blomberg Interactive Brokers to video. On this Thursday, you're listening to Bloomberg Radio m