What do the 2020s have in store for investors? Big-picture thinker David Dowsett sets out the ten trends he foresees emerging over the next decade, along with their investment implications.
TREND 5: Green technology
The current focus on ESG in the asset management industry may salve our collective conscience, but the reality is that the move to zero carbon by 2050 will require the combination of government and private sector efforts only typically seen in a ‘war economy’ setting.
Humans generally respond better to the carrot than the stick, so a capitalist-incentivised approach to climate change is likely to be more effective than lectures from discredited politicians and direct actions from privileged Western elites who record the events on their USD1000 cellphones, seemingly oblivious to the fact that internet-connected devices will be responsible for 14% of all emissions by 2040.
Meaningful progress will be most effectively made, in my view, by focusing on the USD7 trillion investment opportunity that the transition to carbon neutral implies.
This is potentially the most important investment opportunity of our lifetimes.
While capitalism may change, making money while saving the world sounds like a win-win scenario.
This means, for example, focusing on solutions to develop electric air taxis or sustainable jet fuel. It means developing battery technology with much longer storage life.
It involves creating fertilisers that provide the nitrogen necessary to grow plants without giving off harmful nitrous oxide.
The opportunity set is huge. It is filled with risks as well as rewards but could be the most exciting area of investment over the next decade.
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