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Coronavirus could weaken climate change action and hit clean energy investment, researchers warn – CNBC

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5 years ago

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Morning traffic makes its way along a freeway in Los Angeles, California, September 19, 2019.

Mike Blake | Reuters

The coronavirus pandemic has stoked concerns of a global economic recession as it spreads across the world, igniting one of the sharpest oil price plummets in the last 30 years and causing the biggest stock plunge on Wall Street since the stock market crash in 1987. 

While the crisis has led to a temporary decline in global carbon dioxide emissions, experts are warning it poses a serious threat to long-term climate change action by compromising global investments in clean energy and weakening industry environmental goals to reduce emissions. 

The International Energy Agency, or IEA, has warned the virus outbreak will likely undermine clean energy investment and is urging governments to offer economic stimulus packages that invest in clean energy technologies. 

“If the lesson learned is, let’s get back to the status quo ante, then [the virus] probably will slow down the energy transition,” author and climate activist Bill McKibben told CNBC. 

“If the lesson learned is, you have to take the physical world and its risks seriously, it could make governments more likely to move fast — especially since interest rates in much of the world are now effectively zero,” he said. 

Leading clean-energy analyst BloombergNEF has already cut its forecast for global solar demand this year as policymakers and corporations focus on short-term economic stimulus measures instead of long-term clean technology.

Solar manufacturers across the world are citing production and project delay, and analysts are warning of higher costs for green manufacturers and a hit to global operations as the virus spreads. 

Rob Jackson, a professor of Earth system science at Stanford University and chair of the Global Carbon Project, said the virus will hinder climate change action from corporations and countries despite the short-term drop in carbon emissions from the outbreak. 

“If the global economy crashes, emissions will drop short term as we produce fewer goods, but climate action will slow. Employment trumps environment in politics,” Jackson said. “If companies are hurting, they may delay or even cancel climate-friendly policies that require investments up front.” 

Airlines, for example, have seen a dramatic decline in air travel and emissions in the short term as the virus spreads.

While demand will likely bounce back after the worst of the pandemic is over and people return to flying, the industry has cited financial turmoil from the virus as a reason to weaken or delay environmental programs in place to reduce emissions. Aviation accounts for 2% to 3% of global carbon emissions. 

“For companies, the outbreak is already introducing doubt into renewable-energy global supply chains and challenging company balance sheets,” said Dr. Melissa Lott, a researcher at the Center of Global Energy Policy at Columbia University. 

As major economies across the world begin to prepare economic stimulus packages, the IEA has called for governments to focus on driving climate action and building out low carbon infrastructure in those plans.  

In the U.S., the Trump administration has considered providing assistance for hard-hit industries such as the cruise ships and airlines, as well as offering low-interest loans to oil and gas producers that have seen declines in oil prices — a move that would further lock in carbon-intensive investments.

“We have not yet seen similar offers for clean energy companies,” Lock said.

“If economic stimulus packages drive money away from clean energy investments by infusing fossil fuels industries with short-term capital while ignoring clean energy supply chains … we could see a domino effect that would push us further away from our clean energy goals,” she added. 

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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7 days ago

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November 6, 2024

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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4 weeks ago

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October 16, 2024

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

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1 month ago

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October 11, 2024

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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