Based on an article from zerohedge.
Investor Confidence Wanes in Renewable Energy
A recent article highlights a notable shift in investor sentiment away from renewable energy.
“Reuters reports that renewable energy funds suffered a net outflow of $1.4 billion in the July to September 2023 quarter.”
This marks the largest-ever quarterly outflow, signaling a significant retreat from the sector. The S&P Global Clean Energy Index, which encompasses major renewable energy companies, has also seen a decline of 30 percent this year, further illustrating the dwindling investor confidence in the net zero mission.
Political Skepticism Surrounds Net Zero Goals
Political voices across the globe are expressing skepticism and concern regarding the feasibility and impact of net zero policies. Australian Nationals Senator Matt Canavan, for instance, has described net zero as a “soundbite” and “totally insane,” emphasizing the extensive reliance of various sectors on fossil fuels.
““Almost everything we grow, we make, we do in our society relies on the use of fossil fuels,” he said.”
Global Shifts in Energy Policies
Various countries seem to be subtly shifting away from aggressive net zero targets, reflecting a more pragmatic approach to energy policies. For instance, the UK has delayed the banning of new petrol and diesel cars and residential gas heating, with Prime Minister Rishi Sunak stating,
“We’re not going to save the planet by bankrupting the British people.”
Similarly, France’s President Macron has refrained from setting a definitive date for phasing out fossil fuels.
Questioning the Science Behind Net Zero
Critics are also questioning the scientific basis of net zero policies. Geologist Professor Ian Plimer has criticized the manipulation of temperature records, stating,
“The fundamentals of science are you do not tamper with the original evidence. That has happened with our temperature record, where the past has been cooled and it makes it look as if we’re warming. That is fraud.”
Conclusion: A Reevaluation of Net Zero?
The article paints a picture of growing skepticism and reevaluation of net zero policies across various sectors, from investment to politics. The retreat of investors, coupled with political voices advocating for a more balanced and practical approach, suggests that the net zero ship might indeed be navigating through turbulent waters.
H/T Yooper
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Investment flows are determined by the perception of profits; they are not fundamentally tied to the soundness of the underlying activity. If a product or service makes money in a free market investors will flock to it. If a product or service which cannot possibly be profitable is propped up by subsidies, mandates or other market distortions investors will still flock to it.
Warren Buffet made this clear. He is not a fool, but he invests in foolish activities because foolish subsidies make them a good investment.
It is also the case that with rising interest rates money will tend to migrate away from equities, as the smaller profit difference between equities and zero-risk fixed-rate instruments does not justify the increased risk.
In addition sometimes investors are caught up in a mass delusion and do stupid things because everyone around them is caught up in the same delusion. See the Dutch tulip mania in the early 17th century. Ditto all the people that gave Bernie Madoff their money.
All that being said, “renewable energy” — principally wind and solar — have significant problems detailed here many times and absent government subsidies and mandates would achieve minimal market penetration. The problems are so significant that at least some investors have gotten off the train and are looking for energy projects that can actually succeed on their own.
This is why Keven O’Leary (Shark Tank’s Mr. Wonderful) wants to build a new oil refinery.
Money can flow to bad ideas for a bunch of reasons. Likewise money can flee good ideas. Investors are never omniscient, and sometimes are even stupid.
Where money goes is not in and of itself a good indication of what makes sense.
The World Bank is in talks about a potential $1 billion loan to help enable South Africa to reform its energy sector……
The loan, which would be directly to the government rather than to state utility Eskom, is “under discussion”….
The World Bank loan would also support South Africa to make a “just transition” away from coal,
South Africa may get $1 billion loan from World Bank to tackle power crisis (msn.com)
The problem being the usual corruption with another leftist Utopia going down the gurgler
Some of these last minute doubters are disingenuous. The evidence they now claim to see has been there from the beginning. Anyone with an analytical mind could see faulty conclusions, questionable data, circular reasoning, wishful thinking, etc. We need our political leaders to be flooded with this information.