By Geoffrey Smith Investing.com – It’s easy to dismiss President Joe Biden‘s climate summit last week as an empty spectacle, a sign of political virtue from an elite eager to avoid being cast as the global villain in our era’s great drama Easy. , but bad. The defeat of Donald Trump last November almost certainly marked the last time climate change deniers will hold power in a major advanced economy. Among the G20 states, Brazilian Jair Bolsonaro is the last to resist and it seems certain that he will be ousted from power next year, following a disastrous drop in his audience ratings due to mismanagement of the pandemic. The consensus forged in the Paris climate talks in 2015 has therefore been re-established. Generational shifts in attitudes will likely ensure that it is maintained this time. Discussions about solutions will continue, but it seems unlikely that the world will question the existence of a problem again. This matters. Resolving that question removes many of the political obstacles to profound changes in the way taxes are collected and spent. An international agreement of this nature will ensure that states maintain a very active role in directing where capital is going and not going, especially in the energy sector, but also in areas such as construction and transportation. The state in general (and communist states in particular) may have a long history of misallocation of capital when choosing winners in such circumstances, but history suggests that the payoff for investors willing to bet against such political impulse will really be very poor. The degree of unanimity shown last week was remarkable for a group of leaders who at other times can barely agree on what day it is: The US has pledged to cut its greenhouse gas emissions by 50% from the 2005 levels by 2030, a much more ambitious target than President Obama’s promise of 26-28% by 2025 in the original Paris talks. Even more striking was China’s new goal, adopted a few weeks earlier, to be carbon neutral by 2060, accelerating the phase-out of coal as an energy source. Behind those promises there is no star-eyed environmental idealism, but rather a maneuver to position oneself in the pursuit of mastery of the technologies that will drive the coming industrial revolution. China, the EU and now the US are recognizing that countries that want to lead globally need to legislate domestically to create a framework that encourages such technologies. The first effects of this renewed global consensus on markets are already clear: this week it reached its highest level in 10 years amid a growing scramble for a metal that is needed in much larger quantities for electric cars. – another essential battery metal – is close to a seven-year high for similar reasons. , whose unmatched electrical conductivity makes it an essential input for things like solar power cells, is within 10% of the eight-year high it reached in August. But the impacts are not limited to primary resources for the industry. The carbon footprint reduction qualities of Zoom Video Communications (NASDAQ 🙂 conference calling technology, to name just one example, seem likely to earn it a spot in most ESG-focused model portfolios, supporting its valuation in the coming years. On the other hand, one of the factors behind the cryptocurrency sell-off over the past week has been concern at the idea of the energy intensity of the entire crypto sphere. Governments forced to seek greater energy efficiency can only wait while large amounts of coal and gas are burned to generate an asset without any social or political advantage to them, after all. Skeptics will no doubt point to the sky-high valuations of higher-profile green stocks, such as Nextera Energy (NYSE 🙂 or Orsted (OTC :), a Danish solar and wind farm operator. Hydrogen investors, in particular, have already been through more than a boom and bust. That doesn’t seem to have stopped people from buying: The Nasdaq Renewable Energy Generation Index rose more than 43% from pre-pandemic levels, while the S&P 600 Energy Index, a basket of old-school energy companies, fell. more than 20%. Cycles of hype and charlatans will ensure that investors are never short of opportunities to lose their savings on individual stocks, and it is not impossible for a dying oil and gas industry to produce cash as abundantly as the tobacco industry has done for the past few years. 30 years. Still, the direction of travel is clear. Let the trend be your enemy if you insist, but don’t expect to be rewarded for your loyalty to the old guard.