Fossil fuels might have recovered some ground after the coronavirus pandemic, but the era of ESG is still very much upon us. As evidence of the latter, European Union countries have recently agreed to promote a global move towards energy systems free of “dirty energy”.
The best part is that the block’s solidarity is not limited to words. In December 2022, members of the European Commission gave a green light on a €5.67 billion funding plan, thereby contributing to the search for innovative solutions to reduce greenhouse gas emissions and improve global climate resilience.
On top of that, €1.67 billion went into supporting biodiversity in the region. Not the US defense budget of around $816 billion for 2024, but at least it is something. Now, one might say, why is this important? Because unless we start planning and acting now, there could be no tomorrow at all.
A bumpy road ahead
In light of the above, it would seem that everyone wants to do their part to save the planet, but this is not exactly the case, and new technologies are to blame. In particular, this applies to the artificial intelligence industry which is rapidly gaining momentum.
Research conducted by the AI and Sustainable Development Commission suggests that in 2019 data centers and communication networks accounted for approximately 1% of global electricity consumption and were responsible for 0.3% of global carbon emissions.
Training GPT-3, one of the largest and most powerful language processing AI models to date, on the other hand, took 1.287-gigawatt hours, or about as much electricity as 120 US homes would consume in a year. The problem is that this number is set to increase substantially in the future.
Knowing but not acting
As strange as it may sound, scientists warned of the threat of AI years ago. Nevertheless, technology has not become greener, even by a fraction. Not to sound dramatic, but if the situation does not change, it is to be expected that regulators will start to consider imposing penalties on the industry for CO2 footprints.
The greatest mystery in this context is that Greta Thunberg and her zero-emission “mob” have not chained themselves to data centers and did not go “storming” into ChatGPT offices yet. Let’s hope they are not using dirty AI services at least. On the other hand, “the day is still young”.
In the meantime, companies like Alphabet Inc and Microsoft Corporation are already looking for possible solutions. In addition to reducing energy consumption, they have increased substantially investments in renewable energy sources. The big question now is whether wind and solar power plants will be enough.
What could be the solution?
The most extreme one would be to stop using technology, including 5G networks, and return to the Stone Age. If not that, perhaps everyone could turn Amish and become farmers or craftsmen. Of course, the standard of living will drop dramatically, but breathing will be much easier.
Global warming may come to naught and Greenland’s ice sheet might not melt so fast. The problem is that only a few will be able to survive without cars, computers, cell phones, and, most primarily, social media platforms. Thus, this option is not feasible.
Ironically, an alternative solution would be to use the very same AI such as TradingView Stock Widgets. According to Microsoft, “AI-based systems can better integrate variable renewable energy into a stable electricity grid. They can also help reduce the cost of carbon capture by accelerating the discovery of new materials with desired properties”.
Could bioethanol help?
Not long ago, one of the most discussed topics in the energy sector was the development of biofuel production. It was assumed that by increasing investments in this direction, it would be possible to reduce dependence on oil and reduce carbon dioxide emissions.
Agricultural lobbyists had even convinced Europe and the U.S. to adopt ambitious plans to promote vegetable substitutes for gasoline. The only hitch was that ethanol derived from corn in the US and biodiesel derived from palm oil, soybeans, and rapeseed in Europe proved to be much scarier.
According to some estimates, it would take more than 400 years before the use of biodiesel compensates for the direct environmental damage caused by the draining of wetlands. Global emissions have already increased by several dozen percent due to deforestation.
Why is it important to invest in green energy?
Besides the eco-reasons, it could also help “secure the future”. According to UN forecasts, by 2030 the global population will increase to 8.5 billion people, and by 2050 – to 9.7 billion. The question arises – is it good or bad?
For the planet – certainly not. Natural resources are limited, and eventually, the moment will come when humanity will face shortages. If in the case of food, the solution could be the use of GMOs and the transition to crickets and worms, the situation with water is much more complicated.
As for natural resources, the epicenter of events could be the Arctic. Melting ice will accelerate the development of the region, in particular, the exploitation of resources (gas, oil, and rare earth metals). Some even predict a new “cold war” over Arctic resources.
Not only governments around the world, but a huge number of international companies are concerned about climate change and ready to help to reduce global emissions, revolutionize renewable energy, and promote a decarbonized economy. Environmentally friendly stocks
are the main drivers of this brave new world. So anyone can invest in green, the main thing is to pick the right trading tools, something like stock screener or TradingView economic calendar.
What if we leave everything as is?
The main threat lies in climate impacts. Back in 2021, Professor Petteri Taalasa, secretary general of the World Meteorological Organization, said, “There is more water vapor in the atmosphere, exacerbating extreme rainfall and deadly floods.
The UN noted that the Earth’s temperature limit could be breached if carbon dioxide emissions are not cut in half by 2030 and completely by 2050. No wonder, in the first nine months of 2021, the U.S. faced 18 “unprecedented” weather and climate disasters. Other countries could not avoid a similar fate.
As for beneficiaries, natural disasters could play into the hands of home improvement companies, engineering companies, generator manufacturers, etc. Water stocks and “water” ETFs could also be on that list. Which side to choose? Depends on the perspective of each.
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