Recently, the United Nations Climate Change Conference took place in Glasgow, Scotland, where global leaders basically got together to lie to each other about what they’re going to do to combat climate change.
The theme of the meeting seemed to be that if the developed nations gave all of the poor, undeveloped nations a bunch of money, then we can all just get off of these nasty carbon-based fuel sources.
But here’s the truth… We cannot get to zero net emissions by 2050 without absolutely destroying the global economy. And I’m not kidding about that. The total price tag for zero net emissions by 2050 is $150 trillion!
So, while I think zero net emissions is a worthwhile goal, I do not think that we should spend all of that money and do a lot of short-term damage to the economy to attain that goal. Let me give you an idea of what would have to happen to get to zero net emissions…
There will be corporate carbon taxes, which reduces profitability and has an impact on stock prices. You will either drive an electric vehicle (EV), or you will take public transportation. Each and every year for 30 years, we’ll need to build four times as many solar and wind plants than we are right now.
Then, we need 14 times the 2020 EV production… starting pretty much right now. And 100% of all EVs are going to have to be powered by renewable energy. We need 88 times more battery manufacturing capacity.
Oh, and if you like to eat meat — that’s out. We’re moving to plant-based food only. That’s really where they lost me, by the way, because I love a good steak.
Now, here’s the other thing… A lot of what is considered clean energy is not actually that clean. For solar panels, it takes four years for them to produce as much energy as is used to create them. And for windmills, no one knows what to do with windmill blades. 8,000 of them are incinerated or placed in landfills every year.
I could go on and on about this, but basically getting to zero net emissions is a massive goal with a cost that is way too high. So, I am not anti-renewable, but I think we should also be looking at things like natural gas and propane as bridge fuels to get us to a renewable future. But politicians are going to keep pushing people in this direction.
So, how can we profit from this situation? Well, the best way to cash in is through the solar industry and one specific company.
First Solar, Inc.
First Solar, Inc. (FSLR) makes everything from solar modules to huge turn-key solar plants. They’re one of the oldest solar companies in business, having been around since 1999. And unlike many of their competitors, they’re profitable! We expect them to stay profitable and for profits to continue to grow going forward.
They’ve got huge projects in the middle east, and they’re just about to complete the largest solar project in the southeastern US. They also have some very big projects going on in India, which is really trying to push solar as opposed to coal-fired and other types of electrical production.
We’ve got positive earnings surprises from FSLR in three of the last four quarters, which is bringing in the type of institutional buying pressure that is starting to give the stock the smooth, up-and-to-the-right momentum that we like to see.
And given the money that we know that corporations, individuals and governments are going to be forced to spend on climate change, a lot of it’s going to go to solar, and a lot of that is going to go to FSLR. So this could be the start of a very long run up and to the right.
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