The effects of climate change, such as heat, drought, flood, and famine, are becoming increasingly apparent. To mitigate the consequences of global warming, the world’s predominant energy agency stresses the need for oil, coal, and natural gas consumption to decline much faster. At the same time, the transition to clean sources of energy like wind and solar power needs to occur more rapidly.
Inexplicably, clean energy companies have seen their stock values plummet while big oil companies like Exxon Mobil and Chevron plan to invest in acquiring shale drilling and oil companies respectively. This puts the stock market’s stance in stark contrast to the scientific evidence and recommendations for switching to renewable energy sources.
Despite hundreds of billions of dollars being poured into renewable energy projects, returns have not been favorable. Stock valuations of many fast-growing renewable energy companies have decreased due to rising interest rates, escalating costs, and diminished consumer interest.
Meanwhile, big oil companies, especially Exxon and Chevron, are betting heavily on oil, exhibiting a stark contrast to the worldwide calls to curb carbon emissions and invest in renewable power sources.
The situation has become even more perplexing as the stock market’s positions seem to disregard urgent scientific warnings about the consequences of not transitioning to renewable energy and the potential for oil to become a stranded asset in the future. While the message from the market should not be disregarded entirely, it is important to remember that it is a short-term voting machine rather than a long-term weighing machine, and its views change frequently.