To reach global net zero emissions goals there needs to be increased investment in the area, but those investments create huge economic opportunities and many of the areas ripe for carbon reductions can pay for themselves, according to the IEA’s World Energy Outlook 2021.
The report says that successfully achieving net zero emissions could create a market for wind turbines, solar panels, lithium batteries and fuel cells of more than $1 trillion comparable in size to the current oil and gas market. The IEA also says 40% of the required emissions reductions to meet net zero objectives can come from measures that will pay for themselves.
Those areas include improving efficiency or installing wind or solar power in areas where they are the most competitive in electricity generation.
Although the IEA says such investment is lagging and is far below what is needed to reach sustainability.
“There is a looming risk of more turbulence for global energy markets,” says IEA Executive Director Faith Birol said. “We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead. The way to address this mismatch is clear – a major boost in clean energy investment, across all technologies and all markets. But this needs to happen quickly.”
Investment in sustainability outlooks continues to be both a problem and what could be an opportunity. The UN’s sustainable development goals face a funding gap of $100 trillion, according to a report by Force for Good, but the goals could bring in $12 trillion of business opportunities if tackled reasonably. Businesses globally continue to say they will invest more in sustainability, with one recent survey indicating double-digit growth in spending toward ESG objectives.
The IEA report says that fossil fuels still are too widely used for energy consumption and that the use of coal, aiding the second highest yearly increase in carbon emissions on record.
The report calls for two areas of action to help continue advancing toward net zero. One is the Stated Policies Scenario, which represents actions that governments have already put into place, and the other is an Announced Pledges Scenario, which are plans that have been stated but not necessarily carried out.
The World Energy Outlook says that the Stated Policies Scenario will result in almost all the net growth in energy demand through 2050 is met by low emissions sources, but still leaves annual emissions at today’s levels. For announced pledges, the IEA sees demand for fossil fuels peak by 2025 and carbon emissions drop by 40% worldwide by 2050. If that is fulfilled all industries see a decline, with electricity driving the biggest improvement.
Under both the scenarios oil demand goes into decline for the first time in a WEO report, although the IEA says timing varies widely. Coal could also drop in the advanced pledges scenario, especially with China saying it will halt production of coal plants. The IEA says that could save 20 billion metric tons of carbon emissions by 2050.
Similarly, the EU has pledged a rapid increase in renewable energy after recent power crunches. The IEA report says the EU will save a comparable amount of emissions as China if it reaches its 2050 net zero goals.
Still, the IEA says the differences in what have been done and what are pledged to be done is stark and what is currently in place only result in 20% of the necessary emissions reductions by 2030 that are necessary to reach net zero by 2050.
“In every scenario, this report forecasts that fossil fuel demand will soon peak and begin to decline, if it hasn’t already,” says Andrew Logan, senior director of oil and gas at Ceres. “This makes it clearer than ever that each dollar invested in fossil fuel development today increases the risk of future stranded assets and represents a missed opportunity to invest in much-needed clean energy technologies and infrastructure. This new reality is why investors have increasingly called on companies to disclose and reduce emissions and set transition plans.”
Simon Kronenfeld: Emerging investment opportunities – mtltimes.ca
Smart investment can radically change your quality of life. Investing wisely has been one of the biggest contributors to entrepreneur Simon Kronenfeld’s journey from a dishwasher to becoming major player in Canada’s real estate market. Following his example by finding the right investment can open up a lot of opportunities for the individuals who seek them out. These are the investments that have the potential for growth with minimal risk. These top investment options can help you get ahead in 2021.
Investment has played a huge role in Simon Kronenfeld’s success. Making his way from washing dishes to making major investments in Canadian real estate, Kronenfeld has always shown excellent investment instincts for emerging opportunities. Simon focuses on finding the best risk-adjusted returns, maintaining a diverse portfolio of different asset classes. These are the key areas Simon has focused his investments into for decades, and continues to invest into in 2021.
Exchange Traded Funds
Exchange traded funds, also known as ETFs, provide a simple way to diversify your portfolio while minimizing risk. By investing into an ETF, you are investing into certain sectors of the market, allowing yourself to capitalize on the growth of the overall industry, not just individual companies. While this somewhat flattens out your gains from the sudden growth of a single company, it also counteracts the impact of individual losing companies on your returns from the fund. This makes ETFs an effective method of capitalizing on the long-term success of a market sector or group of companies.
Real estate investment turned Simon Kronenfeld from a small business owner to a major industry figure, and it remains one of the most viable (and popular) investments in 2021. Analyzing the future potential to transform the value of land enables smart long-term investment decisions. Kronenfeld’s story is proof that forward-looking investments are the key not just to creating financial value, but to transforming communities for the better. Timing has always been one of the challenges of the real estate market but investors who get it right can make returns significantly above the market average.
Real Estate Investment Trusts (REITs)
With Kronenfeld’s experience in both real estate and accessing the stock market through ETFs, he sees Real Estate Investment Trusts (REITs) as an ideal combination of capital appreciation, practical real estate market experience, and steady dividends. An individual can use REITs to gain exposure to companies like RioCan and Allied properties, receiving 4-6% returns on dividends alone, in addition to capital appreciation. REITs give investors exposure to real estate, while still having liquidity comparable the stock market, in contrast to the illiquidity of real estate.
Initial Coin Offerings
Initial coin offerings, also known as ICOs, have major potential for growth but also carry greater risk and volatility. ICOs are tokens that are sold by startups to fund the creation of new services, apps, and often cryptocurrencies and other blockchain-related products. While this space has the possibility of high returns, smart investors keep only minimal assets of this class in their portfolio, as it shares the high volatility and lack of regulation that makes cryptocurrency a risky investment.
Smart investors pay close attention to both emerging and flourishing markets, enabling them to take swift action when the time is right. Using Simon Kronenfeld’s roadmap to successful investment, combined with your your own knowledge and experience, will enable you to make the right investing choices in 2021.
Stocks gain as earnings provide some optimism; 10-yr yield climbs
Stock indexes around the world jumped on Tuesday as U.S. technology shares extended recent gains and earnings reports were upbeat, while the 10-year U.S. Treasury yield rose to its highest in more than four months.
The U.S. dollar was lower on the day as other currencies, including sterling, were supported by investor expectations that interest rates could be increased sooner than some had forecast.
On Wall Street, the technology sector boosted the S&P 500 the most, while recent stronger-than-expected results have bumped up the forecast for S&P 500 earnings for the third quarter.
Investors remain worried, however, about the impact that higher costs, supply disruptions and labor shortages are having on companies.
“The key for the market to going up from here will not be higher multiples, it will have to be higher earnings. That’s why it’s so important to pay attention to what those profit margins do going forward and what the trajectory of GDP looks like,” said Eric Marshall, portfolio manager at Hodges Funds.
Among U.S. companies reporting results on Tuesday, insurer Travelers Cos Inc beat estimates for third-quarter profit and its shares rose. Johnson & Johnson raised its 2021 adjusted profit forecast and its shares jumped 2.3%.
The Dow Jones Industrial Average rose 198.7 points, or 0.56%, to 35,457.31, the S&P 500 gained 33.17 points, or 0.74%, to 4,519.63 and the Nasdaq Composite added 107.28 points, or 0.71%, to 15,129.09.
The pan-European STOXX 600 index rose 0.33% and MSCI’s gauge of stocks across the globe < .MIWD00000PUS> gained 0.73%.
The MSCI index reached its highest in about a month.
MSCI World Index https://fingfx.thomsonreuters.com/gfx/mkt/zgvomrjmavd/world%20stocks%20oct%2019.PNG
The dollar index against a basket of other currencies was last down 0.22% on the day at 93.73, after earlier dropping to 93.50, the lowest since Sept. 28.
The euro gained 0.25% to $1.1640. Currencies, including sterling and the New Zealand dollar, are benefiting from rising interest rate increase expectations.
Bitcoin last rose 3.49% to $64,201.08.
In the U.S. Treasury market, the yield curve widened, reversing the recent trend.
In afternoon U.S. trading, U.S. 10-year yields were last up nearly six basis points at 1.6407%. The yield hit a 4-1/2-month peak of 1.6440%.
The U.S. 5-year yield, which has been on a tear the last two weeks, was last down at 1.1586%.
Oil prices climbed and were near multi-year highs as an energy supply crunch continued across the globe. Brent crude rose 75 cents to settle at $85.08 a barrel. U.S. West Texas Intermediate (WTI) futures rose 52 cents to settle at $82.96.
In other commodities, U.S. gold futures gained 0.15% to $1,769.70 an ounce.
(Additional reporting by Tommy Wilkes in London, Shreyashi Sanyal and Devik Jain in Bengaluru, Karen Brettell, Stephanie Kelly and Sinead Carew in New York, and Saikat Chatterjee; Editing by Jason Neely, John Stonestreet, Steve Orlofsky and Cynthia Osterman)
In highly uneven recovery, global investment flows rebound – UN News
It shows the increase in the first two quarters in FDI, recovered more than 70 per cent of the losses stemming from the COVID-19 crisis in 2020.
For the UNCTAD‘s director of investment and enterprise, James Zhan, the good news “masks the growing divergence in FDI flows between developed and developing economies, as well as the lag in a broad-based recovery of the greenfield investment in productive capacity.”
Mr. Zhan also warns that “uncertainties remain abundant”.
The duration of the health crisis, the pace of vaccinations, especially in developing countries, and the speed of implementation of infrastructure stimulus, remain important factors of uncertainty.
Other important risk factors are labour and supply chain bottlenecks, rising energy prices and inflationary pressures.
Despite these challenges, the global outlook for the full year has improved from earlier projections.
The growth in the next few months should be more muted than the in the first half of the year, but it should still take FDI flows to beyond pre-pandemic levels.
Between January and June, developed economies saw the biggest rise, with FDI reaching an estimated $424 billion, more than three times the exceptionally low level in 2020.
In Europe, several large economies saw sizeable increases, on average remaining only 5 per cent below pre-pandemic quarterly levels.
Inflows in the United States were up by 90 per cent, driven by a surge in cross-border mergers and acquisitions.
FDI flows in developing economies also increased significantly, totalling $427 billion in the first half of the year.
There was a growth acceleration in east and southeast Asia (25 per cent), a recovery to near pre-pandemic levels in Central and South America, and upticks in several other regional economies across Africa and West and Central Asia.
Of the total recovery increase, 75 per cent was recorded in developed economies.
High-income countries more than doubled quarterly FDI inflows from rock bottom 2020 levels, middle-income economies saw a 30 per cent increase, and low-income economies a further nine per cent decline.
Mixed picture for investors
Growing investor confidence is most apparent in infrastructure, boosted by favourable long-term financing conditions, recovery stimulus packages and overseas investment programmes.
International project finance deals were up 32 per cent in number, and 74 per cent in value terms. Sizeable increases happened in most high-income regions and in Asia and South America.
In contrast, UNCTAD says investor confidence in industry and value chains remains shaky. Greenfield investment project announcements continued their downward path, decreasing 13 per cent in number and 11 per cent in value until the end of September.
The combined value of announced greenfield investments and project finance deals rose by 60 per cent, but mostly because of a small number of very large deals in the power sector.
International project finance in renewable energy and utilities continues to be the strongest growth sector.
The investment in projects relevant to the SDGs in least developed countries continued to decline precipitously. New greenfield project announcements fell by 51 per cent, and infrastructure project finance deals by 47 per cent. Both had already fallen 28 per cent last year.
Simon Kronenfeld: Emerging investment opportunities – mtltimes.ca
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