Election 2020: Over the next few weeks, We will explore the Presidential elections and specifically the potential market impact of each candidate's various issues and policies presented and their solutions proposed. Today we focus on the issue of climate change. Whether one believes in human-caused climate change or not, we as traders and investors must be willing to research and ascertain how this part of a candidate's platform and possible implementation might affect investment flows in the near and long term.
The stated policy of the democrats, as described in the platform, with regards to the de-carbonization policy and classification of the housing stock of the United States is a monumental shift from where we are now. With the goal of cutting in half the nation’s carbon footprint for the housing stock by 2035, it would necessitate a broad portfolio of net-zero energy solutions, with commensurate reductions in floor space and increases in population densities. As of 2019, there were 128.58 million households in the United States (this includes all types, single-family, multifamily, etc.) Residences account for 20% of all greenhouse gases (GHG), which is mostly related to heating and cooling. But the current predictions for increasing GHG is not just from population growth, but also information technology advances and other demand drivers.
So where does this leave investors should the platform policy be actually implemented? Mandated goals will filter down through regulations and other incentives such as subsidies. Today we see incentives at work in electric car production and solar-related technologies for electricity production. It is not a far stretch to imagine that net-zero housing will be subsidized, which would benefit not just heating and cooling technologies but also the building materials that go into the required construction; not just the final product, but also in the raw material sourcing, manufacturing, and assemblage of that new housing stock. Each step of the process will be looked at and considered in getting to some semblance of net-zero. We will have more to say on this topic and the other party platform items and implications as we approach the national election.
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