Make Hydrogen Happen
BYLINE: Wall Street Journal
Why No One Wants to Pay for the Green Transition Investors and consumers balk at costs of replacing fossil fuels with renewable energy, highlighting painful economics of climate mitigation
In the past few years, Washington and Wall Street started fantasizing that the transition to net-zero carbon emissions could be an economic bonanza. “When I think climate change, I think jobs,” President Biden said. When Wall Street heard green energy, it saw profits. As Ford Motor<www.wsj.com/market-data/quotes/F> launched an electric Mustang and pickup truck, its market value topped $100 billion for the first time.
This year the fantasy ended. With electric vehicle demand falling<www.wsj.com/business/autos/are-americans-falling-out-of-love-with-evs-2c7e6a1a> short of expectations, manufacturers are dialing back production and buying back stock<www.wsj.com/business/autos/gm-plans-10-billion-share-repurchase-in-bid-to-assuage-investors-35ec7075> instead. Offshore wind developers have canceled projects. The S&P Global Clean Energy Index has fallen 30% this year. Ford’s market cap is down to $42 billion.
This doesn’t mean the transition to net zero is over. Officials meeting this week<www.wsj.com/business/energy-oil/un-climate-conference-cop28-uae-4750c7e2> at the United Nations climate conference are just as worried<www.wsj.com/science/environment/clash-over-climate-tipping-points-and-fossil-fuels-future-at-cop28-a3592771> about climate change. Renewable energy continues<www.wsj.com/business/energy-oil/now-for-some-good-news-about-climate-27236f56> to expand. In the very long run, it is still the case that economic welfare will be higher with less global warming.
But the economics of getting to net zero remain, fundamentally, dismal: Someone has to pay for it, and shareholders and consumers decided this year it wouldn’t be them.
 
<read more on the Wall Street Journal website>