Home Stock Market The world's fossil fuel addiction is only getting stronger - so this...

The world’s fossil fuel addiction is only getting stronger – so this is the place to invest, says Wells Fargo’s LaForge.


The world’s addiction to fossil fuels has intensified despite calls for more renewable energy sources, said the head of real-estate strategy at the Wells Fargo Investment Institute. The Earth is about to get close.

For investors, the transition from fossil fuels to renewables can be slow and nuanced, says John LaForge, of WFII.

Fossil fuels are now a larger share of global energy use than decades ago, up to 86% today from 81% in 1970, in large part due to oil.
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gas
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and the cost of coal has fallen historically and as the global population expands, consumes more.

The United States, for its part, consumes 20% of a daily barrel of oil globally.

“It’s crazy,” said LaForge in a phone interview on Monday with MarketWatch ahead of Earth Day April 22. Spring celebrations began in 1970 as part of the rising environmental movement, according to the The website of the US Senate.

Half a century later, promoting renewable energy to replace fossil fuels remains a “huge task,” LaForge noted in a recent Wells Fargo report.

However, it is the global, high equity mission that is driving a historic change for politicians – and investors.

At President Joe Biden’s Earth Day summit, to be held April 22-23, the White House plans to encourage efforts by major economies to “reduce emissions over the decade. This is important to keep the limit for warming of 1.5 degrees C (2.7 degrees F) within reach, ” MarketWatch reported.

European countries have been leading the way in a government-backed transition to using more renewable energy and the pressure is on the United States and Asia’s major economies to catch up, not to mention the return of industrial giants to their previous commitment to helping developing countries.

Read: As Kerry secures climate commitment to China, here are other things to watch out for at Earth Day summit in Biden

‘There will be more benefits’

Only wind near here
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-2.43%

and solar energy
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-3.21%

LaForge says it has become economically competitive sources of clean energy and that leaves room for fossil fuels and renewables to co-exist in the energy market, especially without support. supporting more active public policy in combating climate change.

“There is a constant traction when you have thriving global economies,” says LaForge. “For renewables to overtake fossil fuels, they basically have to do twice as much.”

But while investment opportunities will persist for traditional fuels for the next five to 10 years, LaForge says, some investors won’t want to do anything with them.

With wind and solar becoming cheaper alternatives and raising awareness about climate change, he remains optimistic about clean energy, if it is for the benefit of the Earth and the bottom line.

“We have to try,” said LaForge. “From an investor’s perspective, there are many more benefits to be had.”

Public policy is needed globally to combat the climate change associated with energy sources such as coal and oil, LaForge said.

Biden’s conference and other major leadership meetings in the coming months are seen as a precursor to the COP26 climate negotiations hosted by the United Nations in Glasgow in November. Biden will need to restore confidence. World news into America as he aims to reduce net national emissions by 2050.

Consider the ingredients behind renewable energy

In real assets today, LaForge says investors have diverted money away from fossil fuels and into metals used in the electric car industry, such as copper.
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silver
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lithium and cobalt.

Copper price HGK21 was up about 1.6% on Monday afternoon, with May contract at around $ 4.23 / pound. That compares to a close of $ 2.39 on Friday, April 17.

Investors have been betting on metals partly out of a belief that electric cars will take off under Biden’s giant proposed infrastructure plan, which calls for charging station nationwide, according to LaForge.

“Metals are the future,” said LaForge, noting that copper prices have doubled over the past year.

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