Investing for a Warmer World

Turn on the news and you’re likely to see something about fire, flood, or drought — all  catastrophic events that have been dominating the news cycle for the past few weeks.

This has been especially true thanks to a recent report from the Intergovernmental Panel on Climate Change (IPCC), a body of the United Nations that studies climate change.

The report painted a dire picture that headlines interpreted to mean a doomed planet with mankind living on borrowed time. In short, a rise in global temperature is certain. By 2040 at the latest, the world will experience 1.5 degrees of warming. It’s this level, scientists say, that we need to keep from passing to prevent the worst potential climate impacts.

The floods, fires, and drought that we are seeing today will be nothing compared to how bad they could potentially get if we continue on the current course.

Because humanity’s understanding of climate science is better now than it’s ever been, we know what steps can be taken to avoid the worst-case scenario.

The report points out that it is possible to cap that increase at 1.5 degrees, but it’s something that will take drastic change. Small, incremental steps simply won’t cut it.

Because we know that human influence is what’s behind changing weather conditions that lead to more severe storms, wildfires, and other such events, these things can be directly linked to our collective carbon emissions.

And because these things will affect every part of the planet, there is incentive for all countries to dedicate resources to lowering emissions.

Many countries are starting to move away from fossil fuels in favor of low-emission sources of power generation like nuclear power. This is all in the service of eventually becoming carbon neutral. China wants to do this by 2060 while the EU wants to get there by 2050.

The U.S. has similar plans. Like the EU, it wants to become carbon neutral by 2050 and plans to do this by replacing fossil fuels with technologies like nuclear, solar, and wind power.

President Joe Biden made it a central part of his campaign and came a step closer to making it a reality with the passage of the infrastructure bill on Tuesday. Some of the language buried inside the bill allocates money for the kinds of projects that can help cut back on carbon emissions and make that 2050 goal.

This is on top of earlier actions the president made that aim to get more electric cars on the road.

To recap, President Biden signed an executive order earlier this month to make half of all new vehicles sold in the U.S. by 2030 electric. This falls into place with the recently passed infrastructure bill, which includes money for more charging stations. That’s the one thing the country is going to need more of if the plan to have more Americans driving electric cars in only nine years has any chance of becoming reality. China and the EU have similar lofty goals of replacing combustion engines with electric cars.

For over 100 years, we’ve relied on massive, centralized power plants to provide us with electricity. As green alternatives become the norm and vehicle charging infrastructure becomes more widespread, the face of power distribution is going to change.

More people will find themselves adopting a model of decentralized distributed power that is more efficient and includes renewable energy generation as part of its construction. This means things like solar panels, battery power, and vehicle charging stations.

It’s a modern solution to a modern problem, and there are a few companies that will take off as countries all over change the way they generate power.

One particular company here in the U.S. has a competitive advantage not many people know about. It’s set to become an industry leader in the distributed power sector as more of the country adopts the technology.

Investors are already starting to back it because the case for it becoming a household name is clear.

If you get in now, you can be right there when it takes off and everyone begins using it.

It makes sense that the U.S., China, and the EU are taking the lead on this because they contribute to CO2 emissions more than any other. Despite ideological differences, these three powers appear to more or less be on the same page about adopting the kinds of changes that will help get climate change under control by the end of the century.

And because the recent report paints such a dire picture, now is the time to take action not just for policymakers, but investors who want to back the companies getting ahead of this trend.

Here in the U.S., one way things will eventually change is the way everyday Americans get their power. 

Keep your eyes open,

Ryan Stancil
Editor, Daily Profit Cycle

Ryan Stancil is an editor and regular contributor to Daily Profit Cycle. He’s been active in the financial publishing industry for more than half a decade, offering insights and commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments. His readers appreciate his "tell it as it is" writing style, where he always offers a fresh new perspective on what's happening in the market and leaves nothing unsaid.