To The Moon

The recent IMF World Economy Outlook has an interesting analysis on the impact of the divestment / keep in under the ground movement. In the absence of increased energy transition awareness affecting investor expectations, current macro and climate policy fundamentals would lead to a 38% higher oil and gas investment than the level observed empirically. Around 150 billion $ investment was cut off by expectations of a faster transition as the industry aligned investment to a net zero pathway. They also modelled the impact of a supply focused, "keep it under the ground" climate policy as opposed to an approach focusing on reducing demand by clean energy investment. Unsurprisingly, artificial supply restrictions lead to skyrocketing prices. Ironically, the more the activists convince investors that they have to divest from oil and gas stranded assets the more profitable the industry will be during the transition.