Global move from buying goods that can be made at lowest possible cost to higher quality and new environmental standards.
Crude producers to start spending on production again until they see sustained high prices. But higher prices go, the more it makes sense to invest in green energy instead.
- Coal, oil and gas being phased out
- Rolling out EVs and their charging infrastructures
- Insulating buildings to meet new standards
- New electrical power grid to meet green requirements
Increased demand for green energy and goods (both consumer tastes and gov regs), combined with ongoing supply chain disruptions:
- Vegetable protein
- Raw materials for batteries
- Rare earth materials
Building solar and wind plants, which require much more copper than conventional power stations. More greening cannot go forward without more production:
- Copper (60% up in last year) and aluminum up, but production down due to ESG issues
IEA noted mismatch between climate aims and available materials like copper, nickel, lithium and cobalt. Most things are shipped, and prices can be expected to rise with energy prices. Or pay more if we go with local goods.
When greenflation hits the poor (gas prices), it can bring about populist revolt.
Achieving net0 by 2050, possibly the greatest challenge ever.
Will require technological breakthroughs.
Brazil (relies heavily on hydroelectric power) drought caused utilities to import natural gas to meet energy demand. Power bills up.
Less wind in Europe, Texas, Cali, unusual weather.
Germany will close last of nuc power stations next year (10% of country's power).
France nuc reactors aging fast, require more upkeep, causing nuc to be less of a source (80 to 65% recently).
Transport costs for natgas up.
US shale drillers don't want to boost production because it might destroy their profitability and turn off investors.
OPEC said they won't increase production, despite US asking them to.