Carbon Emissions and Economics

Although politicians might not have the courage to deal with climate change, despite the evidence, the investment community is starting to look at things differently.

The question for them is whether they can make more money for their investment clients in green energy or whether traditional oil and gas will continue to be the cash cow to best on.

For some investment firms, traditional seems to be still the way to go.  RBC is one, being one of the underwriters of the upcoming public sale of shares in Saudi Aramco.

Encana, though, has just announced that it is relocating to the USA, citing difficulty in raising money.  It's not clear whether this strategy will help much as some American drillers have been saying that they're having trouble raising capital as well.

Much of this story appeared in this article recently, which also referenced a report from business service Bloomberg that some investment funds have decided that they can make money by betting that companies that aren't addressing climate change are going to get weaker.  These investment funds are shorting shares of these companies in the expectation that they can make money as the shares drop in value.  And, in another report, there is news that green energy companies are doing the best of all energy companies.

Of course, there is still talk of expanding oil and gas production in many countries, not the least of which is Canada.  This will, of course, drive prices down, and although that might spur consumption of those fossil fuel products, low prices are seen as a problem for investors.

And then there is that pipeline leak in North Dakota.  That export line is now closed and the gap between Canadian and US crude widened even further.  



This is just business economics talk.  The other story hasn't changed.  Climate change is happening, and happening more rapidly than expected.  This article in Canadian Geographic tells the story.