Climate Crisis AM 1.4.24

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The Fed minutes released late Wednesday don’t bode well for the fragile rally in renewable energy stocks in the fourth quarter. Cleantech, a heavy equipment industry, has been battered by higher borrowing costs since rates began rising two years ago. The prospects of continued high rates or a delay in the cycle’s turn are one reason the market is down this week.

Iran sent a warship to the Red Sea on Wednesday as the Middle East region held its breath following what Iran described as a
terrorist attack on a memorial service for a famous general killed three years ago. It was the second attack outside of Gaza – Israel took out a Hamas leader in Beirut on Tuesday and significantly boosted fears the Israeli-Hamas war might escalate. Such an escalation would boost oil prices at the expense of climate and clean tech stocks.

One of the biggest successes of COP28 at the end of last year came two weeks before anyone ever met in Dubai when President Joe Biden and China’s Xi Jinping agreed to resume cooperation on fighting climate change at a summit in San Francisco. With Taiwan’s election coming next week, climate diplomats will look for signs of a quick deterioration in relations depending on who wins and how China reacts.

Ford cut the prices of some of its flagship EV F-150 Lightnings. Several cuts were as high as $5,000 a vehicle. Ford has changed Lightning prices four times in the past. During an unexpected slowdown of EV sales across most of the US car industry, Ford has had to balance the cost of components with the price consumers will pay. Lightning sales have been disappointing and still represent a tiny part of total F-150 sales. The gas-powered version has been the best-selling vehicle in America for over four decades.

Italy is the latest country to try offers of incentives to buy EVs. As is the case in the US, the government will provide cash to buyers. Vehicles assembled in Italy will get preference. The program is like one the US announced late last month.

Cathie Wood’s Ark purchased 216,000 shares in Tesla last in 2022 and at the start of this year. She was an early forecaster of the broad success of Elon Musk’s company. The purchase came just before Tesla announced record sales for the fourth quarter and all of 2023. At the same time, at least one Tesla model lost tax incentives as the US adjusted which cars would qualify. Tesla’s shares are up almost 1% in the last year.

The Internal Displacement Monitoring Centre announced that at least 32 million people had been displaced in their countries due to climate change in 2023. The figure is a sharp increase from the average year in the last decade. According to the nonprofit’s Environmental Migration report, four of the five nations with the most people displaced were in Asia.