Opinion: This is where investors can find money in Biden’s climate change targets

People who say the government can’t pick winners often point to Solyndra, a thin-film solar cell company that went bankrupt in 2011 after receiving $ 535 million in funding from the Obama administration. But they are often stunned when challenged to set a second example.

Like venture capital, where some startups that once looked promising fail, while others can be spectacularly successful, the government certainly can’t pick them all. Yet over the years, he has invested taxpayer funds in ideas that have been spectacularly successful and changed the way of life for Americans. To name just three: GPS, robotics, and perhaps most importantly: the Internet. I understand that the Internet has been associated with a considerable degree of wealth creation over the last quarter century. So maybe we shouldn’t scoff when President Biden talks big about moving America away from fossil fuels and toward solar and wind power. He thinks these industries are winners that will not only drive America away from fossil fuels, but also generate wealth and long-term jobs down the road. (They already have). Clean energy Where can you make money today? One of the most popular investments in the renewables space is the iShares Global Clean Energy ICLN ETF, + 0.24%. Even after a drop of around 27% this year, it has still tripled from the market lows of March 2020.If you think renewable energy will continue to increase its share of the overall US energy mix. it could represent an entry point for anyone looking for a long-term, well-diversified stake. You can also track the money in other ways. When cell phones started to take off, some entrepreneurs made cash by renting land for cell phone towers. Today there are similar models for solar and wind farms. One of the largest onshore wind farms in the world, for example, is located in Texas, where there is a lot of land and wind. Your investment game here could be a real estate investment trust. One REIT in this space is Hannon Armstrong Sustainable Infrastructure Capital Inc. HASI, -0.60%, which has also retired this year after a very sharp breakthrough in 2020. Fossil Fuel Companies Meanwhile, we do not believe that the oil industry and the gas is full of greenies hugging the trees, but this is changing and could be opportunistic. Royal Dutch Shell RDS.A, + 0.76%, for example, has started to move away from fossil fuels, announcing that it will close seven of its 13 refineries, part of its plan to cut gasoline and diesel fuel production by 55 % during the year. the next decade. US fossil fuel giants ExxonMobil Corp. XOM, + 0.49%, Chevron Corp. CVX, + 0.28% and NRG Energy NRG, -0.00Inc. They are not getting out of oil and gas, but they also understand that money can be made fighting carbon and they are diving into the carbon capture and sequestration (CCS) space. CCS works by trapping CO2 at its source and storing it, often underground, to prevent it from reaching the atmosphere. Maarten Wetselaar, Shell’s director of integrated gas, renewables and energy solutions, has called this more than just a solution, but a real business. ExxonMobil CEO Darren Woods even puts a price tag on it: $ 2 trillion by 2040, nearly 8.4 times the size of the company’s market capitalization. And jobs? Woods believes that a major CCS effort “could generate tens of thousands of new jobs needed to fabricate and install equipment to capture CO2 and transport it through a pipeline for storage.” Also, he says, “it would protect thousands of existing jobs in industries that seek to reduce emissions. In short, large-scale CCS would reduce emissions while protecting the economy. “There’s more to this than just environmental altruism. The Irving, Texas-based company wants tax breaks or a price on carbon to help The first thing would put Biden in the uncomfortable position of lending a hand to one of the country’s polluters, a move that environmentalists strongly oppose. What is needed, they say, is an unlit approach to fossil fuels. On carbon pricing, so far this is an approach the president has so far shunned. Boosting the industry It is not just the fossil fuel industry that is going green. Over 400 major corporations , representing seven million workers in all 50 states and having more than $ 4 trillion in annual revenue, are also on board. In a letter to the president, the group, which calls itself “We Mean Busines s Coalition, “says dramatically reducing greenhouse gas emissions will stimulate a robust economic recovery, create millions of high-paying jobs and allow the US to” better rebuild “from the pandemic. The group includes automotive giants such as General Motors GM, + 1.13% and Ford F, + 0.33%, retail giants Walmart WMT, -1.19% and Amazon AMZN, + 1.61%, tech giants Apple AAPL, + 0.21%, Alphabet GOOG, + 0.85% and Facebook FB, + 0.42%, conglomerates like General Electric GE, + 0.37%, restaurant chains like McDonald’s MCD, -0.73% and dozens of asset management companies. Some of them are not waiting for the feds. Microsoft CEO Satya Nadella, who says the purpose of a corporation is to “find profitable solutions to the problems of people and the planet,” has accelerated the cloud computing and software giant’s decade-long effort to mitigate carbon. It is investing a billion dollars over four years in developing the technology that will be necessary to remove greenhouse gases both from the atmosphere and elsewhere; CFO Amy Hood says being carbon negative is a “good return on investment.” Housing market Where else can you make money here? I wrote last week that high real estate prices have driven millions of Americans out of the single-family home market. Besides being too expensive, they are also horrible for the environment. “Among the varieties of residential homes, single-family homes are by far the most destructive to the environment,” says a Georgetown University study. One way to do two things at once – more affordable housing and less carbon emissions – could be to change zoning laws that generally encourage single-family home construction, often at the expense of multi-family housing units. Between the environmental damage caused by single-family homes and the massive housing shortage in this country, there could be a boost in the development of multi-family housing units. Two publicly traded companies to consider in this area could be Equity Residential EQR, + 0.52%, and AvalonBay Communities AVB, + 0.56%.