To be an investor is to live constantly at the intersection of story and uncertainty, Third Point founder Dan Loeb once said. Energy security and climate policy are starting to reshape the global investment narrative.
America’s massive new green subsidies, including those in the Inflation Reduction Act, should be a game-changer for renewables. Not only could the act boost lower carbon sectors, it could also help the US leapfrog Europe in some key growth sectors. But energy security and green policies have had many false dawns. How much is this likely to change the investment landscape?
History offers a possible guide. Five decades ago, France pioneered another energy security programme, the Messmer plan, which until now has been the world’s most successful energy security and decarbonisation plan. The experience has some important lessons for investors and bankers trying to figure out how revolutionary the IRA could be.