If you read only one thread🧵from me in the next 10 years, read this one:
Here is what is structurally wrong in the way leaders/politicians and people in general talk about the green transition, about fossil fuels, oil, gas and metals.
A cyclical commodity bull market.📈
1/10
Here is what is structurally wrong in the way leaders/politicians and people in general talk about the green transition, about fossil fuels, oil, gas and metals.
A cyclical commodity bull market.📈
1/10
I'm in favor of combating man-made climate change and replacing most fossil fuels with renewables in the long term, but the way we are currently going about it is not realistic and will end badly for society and also in high commodity prices and much higher cost of living.
2/10
2/10
Why is that the case?
Everyone wants renewable energy but no one wants to invest in the raw materials needed to build the EVs, the power lines, or the battery capacity. Due to political pressure, the financial world has had to jump on the #ESG bandwagon. Which is difficult.
3/10
Everyone wants renewable energy but no one wants to invest in the raw materials needed to build the EVs, the power lines, or the battery capacity. Due to political pressure, the financial world has had to jump on the #ESG bandwagon. Which is difficult.
3/10
Investing in new copper, cobalt or lithium mines is considered "dirty" and not ESG compliant. At the same time, we need vast amounts of metals to build our green world of tomorrow.
As long as no rethinking takes place, prices will rise in the long run, as demand grows.
4/10
As long as no rethinking takes place, prices will rise in the long run, as demand grows.
4/10
The same dilemma applies to #oil and gas. Both energy sources will continue to be used for a very long time. Current estimates suggest that peak demand will not be reached until 2040. These estimates are being pushed further and further into the future.
5/10
5/10
And there are reasons for this. While OECD countries will replace fossil fuels with more climate-friendly alternatives in the coming years, non-OECD countries will use more fossil fuels to expand their economies at the same time. (ever heard of "industrialization")
6/10
6/10
We therefore often see the problem through "western glasses". For developing countries, however, fossil fuels are more accessible, less costly infrastructure is needed to use them, and they are still cheaper than alternatives. So it is not a question of will but of growth.
7/10
7/10
But enough talk about problems, what is the solution? Invest.💸
But less in renewable energies itself, but more in the expansion of extraction of the needed metals and fossil fuels. Investments in mining companies and oil and gas production are urgently needed.
8/10
But less in renewable energies itself, but more in the expansion of extraction of the needed metals and fossil fuels. Investments in mining companies and oil and gas production are urgently needed.
8/10
Commodity prices have corrected in recent weeks. The main driver is slowing economic growth and demand destruction due to high prices.
But beware of what happens once the economic cycle turns up again. Commodity prices will most likely become even pricier over time.
9/10
But beware of what happens once the economic cycle turns up again. Commodity prices will most likely become even pricier over time.
9/10
I’m pro-renewables and fighting climate change but people seem to attack the problem the wrong way. The solution is not black or white, it’s grey.
Therefore, I believe that the cyclical commodity bull market will continue for a very long time unless we see a re-thinking.
10/10
Therefore, I believe that the cyclical commodity bull market will continue for a very long time unless we see a re-thinking.
10/10
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