How much we have to remove to hit 1.5 degrees.
Hello from Impact Delta.
Enjoy our periodic newsletter, containing insights and news related to ESG and impact investing. In this edition, a nod to carbon capture and the growth in electric transit.
Look to the air and water - The US Department of Energy has transitioned the department of Fossil Energy to include Fossil Energy and Carbon Management, with the core focus now on climate change. A recent emphasis of this work is to support R+D for carbon capture and storage from the air. This shift from solely focusing on reducing carbon from fossil fuels is in recognition that even with carbon emissions reductions, the planet will still require a removal of 5-15GT/year of carbon by 2050 to avoid overshooting temperature increases above 1.5 degrees.
Electric Vehicles (EV) continue to go mainstream – Despite Tesla's success in scaling EV sales, most legacy automakers have cautiously introduced low volume EV models relative to their core internal combustion products. Ford may have finally found religion, as the Mustang-E has continuously exceeded production targets, with the company now investing to triple current production capacity for this car by 2023. This is on top of getting over 200,000 advance reservations for the F-150 Lightning EV pickup.
Impact EV SPAC – In a similar theme of electric transit going mainstream, impact investing has not been left out of the latest trends of electric transit and Special Purpose Acquisition Companies (SPAC). Bridges Fund Management and AEA private equity firms jointly raised $400 million for a SPAC in September 2021. The SPAC recently completed a merger with Livewire, the electric motorcycle division of Harley Davidson. Having also come around to the value of electric transit, Harley Davidson will retain a 74% stake in the company.
But is it equitably allocated? – With most EVs starting well north of $40,000, and even the Livewire motorcycles having premium pricing, it's often wealthy individuals who have been able to switch to electric transit. Despite this, recent research from several Nobel laureates published at the Paris School of Economics has found that the world's 'top 10%' are responsible for 50% of carbon emissions. By contrast the bottom 50% are responsible for 12% of carbon emissions. No doubt, billionaire space joy flights aren't offset by the fact you have a new Tesla......
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About Impact DeltaA secular shift towards a more responsible capitalism is underway. Impact Delta is a specialist consultancy founded to help investment firms capitalize on this shift. We believe good environmental and social thinking helps investment firms raise capital and earn better returns. More about us here
