"Through regulation, export restrictions, tariffs or significant investments, we believe the US and China will do whatever it takes to take the lead in climate action," says Haim Israel, head of research at Bank of America.
According to Bank of America, the next "war" for political and economic supremacy will not focus on trade or technology, but on climate.
A report published by the US bank states precisely that the most important issue of the current decade is and will be climate change. And China – as Haim Israel , head of research at Bank of America notes – has invested twice as much in climate action as the United States.
"We believe climate strategies offer a way to global supremacy, " Israel said. "Through regulation, export restrictions, tariffs or significant investments, we believe the US and China will do whatever it takes to take the lead in climate action."
COMMITMENT TO CLIMATE IS AN OPPORTUNITY FOR COMPANIES
According to Israel, the economic impact of climate change could reach $ 69 trillion during this century. Investments in the energy transition will have to increase by 4 trillion dollars a year, of which over 100 billion dollars will be channeled into research and development.
According to the bank's estimates, the market capitalization for companies engaged in the fight against climate change could be around 6 trillion dollars, including renewables, electric vehicles and environmental, social and governance sustainability (the so-called ESG criteria: environmental , social and governance ).
"The end result," according to Israel, will be that leading companies on the transition path will be able to raise large sums of money, while "climate laggards" may run into financial hurdles or receive lower valuations. Recently Larry Fink, the president of BlackRock – the largest investment company in the world – stated that today more and more investors are focusing on companies that set themselves sustainability goals, thus inviting companies to adapt to the new context dictated by decarbonisation.
CHAINS AND DUTIES
The critical points in the future "climate war" will concern the domination of the "clean energy" supply chains, policies centered on domestic manufacturing production (in order to reduce dependence on potentially hostile foreign suppliers) and commercial tariffs linked to emissions of carbon.
The executive order signed last Wednesday by US President Joe Biden aims precisely at strengthening critical supply chains , i.e. those linked to those fundamental products for national security: not only personal protective equipment and semiconductors, but also some minerals (such as earth rare) and batteries for electric vehicles and for energy storage.
AMERICA VS CHINA
Haim Israel told Bloomberg that China's wind and solar capacity will increase three and four times their current levels by 2030. In the United States, the expansion will be smaller: estimates say that, by the same date, wind capacity will double and solar capacity will triple. In China, the growth of the battery sector for electric vehicles will also be more substantial than in America.
The race for clean energy technologies between the two superpowers could mean that the demand for oil and that of cars with internal combustion engines will both reach their peak within this decade.
According to Israel it is not only a question of "offense, but also of defense". "Tensions could rise due to China's dominance in solar energy supply chains and rare earth production," says the analyst, but also due to policies focused on domestic production such as Joe Biden's Buy American or as the push of the European Union for the creation of local supply chains for batteries.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/guerra-clima-bank-of-america/ on Sun, 28 Feb 2021 07:00:04 +0000.