3 Clean Energy Funds To Buy As Climate Concerns Intensify

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With climate change accelerating at an alarming rate, global economies are striving to reduce carbon emissions to net zero. Embracing renewable forms of energy, such as wind and solar, helps achieve a part of the target. However, without land-based carbon sinks that absorb carbon dioxide like forests, it will be difficult to help the planet heal.

According to Bank of America’s head of global thematic investing research, Haim Isreal, the economic impact of climate change could reach $69 trillion this century. To counter such conditions, investment in the energy transition needs to increase to $4 trillion a year and that will include more than $100 billion a year in research and development.

Last year has been big for clean energy funds. The funds gained from heavy inflows into ESG investment as the coronavirus pandemic ravaged economies. Solar companies made triple-digit gains with a constant shift to clean energy as the outbreak devastated the global oil industry. Looking ahead into this year, President Joe Biden’s policy changes and rapid decline in renewable energy costs will contribute further toward appreciation of clean energy funds.

Among clean energy players, solar stocks have rallied since Biden got elected as his clean energy agenda was a big part of the election campaign. Immediately after the inaugural festivities, he signed a series of day-one executive orders that also included a commitment to rejoin the Paris climate agreement. The clean energy plan calls for making the U.S. power sector carbon-neutral by 2035.

The clean energy plans imposed by Biden play a critical role in boosting solar companies. And this is because 63% of the electricity generated in America came from fossil fuels in 2019, according to the U.S. Energy Information Administration. Usage and generation of fossil fuels impact climatic change heavily. Series of executive orders have been passed to combat climate change, including spending $400 billion on federal procurement of renewables, batteries, and electric vehicles, reorienting government’s energy purchases, ending fossil fuel leasing, and easing renewable energy development on federally-owned lands. And extension of solar tax credits by two years, which gives a 26% tax credit for both solar and solar plus storage installations, has helped reduce the cost of solar projects.

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