Hedging their Greenbacks: Largest Funds back off from Climate-Focused bets

By Douglas McIntyre  •  October 21, 2024
Pixabay

Many of the world’s largest hedge funds have placed bets against successful funding of tech sectors that aim to reverse or slow climate change, according to a report from Bloomberg. 

According to the news service, “Despite vast green stimulus packages in the U.S., Europe and China, more hedge funds are on average net short batteries, solar, electric vehicles and hydrogen than are long those sectors; and more funds are net long fossil fuels than are shorting oil, gas and coal, according to a Bloomberg News analysis of positions voluntarily disclosed by roughly 500 hedge funds to Hazeltree, a data compiler in the alternative investment industry.”

The news shouldn’t come as a surprise. Battery range remains short, particularly for EVs and solar energy is well short of the projections for wide distribution, except in China. Also with a China exception, EV sales are well behind forecasts. Meanwhile, wind energy infrastructure and equipment have often failed, leaving investors wary. 

And particularly in the U.S., electricity grids have not been expanded and adjusted to handle all of the current electricity plus the unique needs of renewables. 

White House backs off
All of which which means that even the climate-focused Biden Administration has said that crude oil will be a key to energy production in the near and mid-term, with the president noting in his State of the Union address that, “We’re still going to need oil and gas for a while.”

All of which means that unless governments (outside of China) fund green energy initiatives, they will be slow to mature. One sign of this is that China is the only large nation at or ahead of green energy goals, and its government is footing most of the bill.

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