All actions that smell green have gone straight to heaven. It cannot last.

commentary

This is a comment. Comments are written by BT commenters, editors, and guest commentators, expressing their own opinions and analysis.

In the middle of the worst The post-war economic crisis is a stock market feast for all companies that smell like climate solutions.

Kjell Inge Røkke has ignited several billion after she spun off the carbon capture and offshore wind parts of Aker Solutions into two companies of her own in August. The total market capitalization of the three companies has increased from around NOK 2.5 to 11 billion.

The small Aker Offshore Wind is now worth more than Aker Solutions, with 13,000 employees in 20 countries.

Another example of the renewables boom is Quantafuel, which will make fuel and new plastic bags from plastic waste. There, the action is worth three gongs more than it was at the end of July.

Both companies are listed on the new low-threshold offering on the Oslo Stock Exchange, Merkur Market. They have been followed by so many new renewable companies, that Oslo is on the verge of becoming the renewable capital of Europe.

A lot of money goes to companies that barely make money. Quantafuel, for example, has yet to ignite a penny, but the company is now priced at NOK 8.5 billion.

The high price of the stock is a bet that the company will make a lot of money in the future. The potential is huge. If the company can find a solution for recycling plastic, it can become a global winner in a billion dollar market.

As long as no other company manages to take the market first, correct enough. Big companies like Shell, Esso and Veolia are also up to date.

Both Quantafuel and many other green businesses depend on world politicians to pursue a much more active climate policy in the future. Quantafuel, for example, is subject to a ban or ban on the dumping or burning of plastic. Or grants.

And that’s exactly what investors are investing in: Climate policy will sharpen dramatically in the coming years. To achieve the goals of the Paris Agreement, climate emissions must be cut in half by 2030 and to zero by 2050.

Norway is committed to this. The EU has committed to a 40 percent reduction, but will now increase its ambition to 55-60 percent, following decisions by the European Commission and the European Parliament. China recently promised to become carbon neutral by 2060, and Joe Biden has promised a massive renewable effort if he wins the US presidential election.

Looking at the ignition Of course, many of the renewable offerings seem excessively expensive. Like most stocks that smell like oil, they look cheap.

But putting money into climate policy will not be stricter in the future is, to put it mildly, risky. The most radical climate goals are being driven by increasingly impatient opinion.

Increasingly extreme weather has removed some of the doubts among people about whether climate change is real. And if you’re convinced the researchers are right first, your developmental predictions are even more terrifying. Create demands for political measures.

But there are also two Other reasons for the green stock market boom: First, the world is awash in cheap money. Low interest rates, high international savings, and low growth mean that many are looking for returns. Then they are willing to take risks.

Second, more and more funds from larger investors have been forced to invest a certain part of the money in green stocks. It’s partly about where you think growth will come in the future, but it’s also about enlightened self-interest:

Both large and small capitalists have been more concerned with reputation. It is not just that they are afraid to invest in companies that destroy the climate, but also those that violate human rights, contribute to corruption, etc.

Social responsibility, which in tribal parlance is called ESG (Environment, Social and Governance), is simply all the rage in financial circles.

But so much money as he is now pushing himself towards green stocks, someone is still doomed to lose.

Nordea’s chief investment officer Robert Næss now compares what is happening to the so-called dot-com bubble that peaked in March 2000: every company that operated anything on the internet had sky-high prices before the bubble burst .

But even though the price for many companies was absurdly high, the analysis of the future was correct: The Internet would create enormous value for companies that were winners. The only problem is that it is not easy to know who is successful.

So it will also be in the green boom. When money is as loose as it is now, some are doomed to go to failing companies. But those who are successful can do very well in return.