Weekly clippings #29 - flood damage decline, solar warnings, clean shorting, EV value drop

In Science, a 90% drop in US flood damage since the 1940s.

In Investment/Economics, struggling California solar, ESG viewed as grift, short selling solar, Canadians care less about climate.

In Absurdities, cars saving forests and EVs losing value fastest. 

SCIENCE

Unbelievable: U.S. Flood Damage Not only is the conventional wisdom on flooding wrong, data show that flood impacts as measured by direct economic losses have actually decreased by about 90% since 1940 as a proportion of U.S. GDP. The United States is in fact more resilient to flooding than it has ever been. The reduction in flood impacts is an incredible story of success sitting out in plain sight that is completely ignored, in favor of stories that instead tell us that down is up.

INVESTMENT/ECONOMICS

California rooftop solar policy struggles serve as warning to nation Residential solar has been navigating difficult waters over the past year, as high interest rates squeeze the savings made available to homeowners. Policy changes, like net energy metering (NEM) 3.0 in California, are further putting stress on the value proposition to rooftop solar customers, crushing demand in recent months.  Major publicly traded solar stocks are down over 75% over the past year, and demand in major markets like California has peeled back 40% to 80%, with the damage from NEM 3.0 not fully evaluated yet. 

The ‘Giant Grift’ That Swallowed Wall Street—and Maybe Your Savings Aswath Damodaran, a finance professor at NYU’s Stern School of Business, said in an email: “ESG is a scam, an idea that was born in sanctimony, nurtured in hypocrisy and sold with sophistry. The inhabitants of this space are either useful idiots, who think that they are making a difference to society when they are, in fact, just pushing problems behind curtains, or feckless knaves, who use it to make money. The only healthy endgame for ESG is another acronym: RIP. And it will not be a moment too soon.”

Short Sellers Circling The Clean Energy Sector  Interest rates are a key area of sensitivity for the renewable energy sector because clean energy projects require developers to borrow lots of capital up front to build projects. Further, the cost of electricity generated from renewable energy tends to be impacted much more by rising interest rates compared to electricity generated from fossil fuels. 

Canadians appear to have stopped caring about climate change Once a critical factor in elections, polls now show Canadians just want to be able to afford things. As to what’s changed in the last eight years, the main reason is likely that the country has been blindsided by a suite of affordability crises. Rent has reached all-time highs — and is still surging by an average of $175 per month. All the while, wages have been in decline for years and are on course for 40 years of sustained stagnation. Now, when Canadians are asked to rank their top concerns, the top spot is a duel between “economy” and “cost of living” — with climate change lucky if it can crack the top five.

How the Car Helped Restore New England’s Forests Back in the 1930s, lamenting the horse’s decline and its economic effect on farmers, the Horse Association of America extrapolated from the 1900 horse-human ratio and calculated that 54 million acres of U.S. farmland had been spared by the automobile.

Guess Which Type of Car Loses its Value the Fastest?  While the average five-year depreciation for all vehicles is 38.8%, electric vehicles are more than 10 percentage points worse at 49.1%. So, let’s summarize some of the recent stories about the mounting challenges facing the EV industry:

  • They depreciate more rapidly; 
  • They cost more to insure; 
  • They are harder to resale, and more and more dealers won’t take them on trade-in; 
  • Unsold inventory is piling up on dealer lots; 
  • Some models are now being priced well below cost in order to avoid inventory accumulation; 
  • States like California are starting to restrict your ability to charge them at home; 
  • Necessary charging infrastructure does not exist in many areas, and has a high percentage of failure where it does exist; 
  • U.S. automakers like Ford and GM are now delaying major investments in factory capacity or canceling it altogether; 
  • The same is happening with new model introductions; 
  • China is beginning to flood Western markets with cheap EVs.
On and on it goes. But other than all these things and many more, everything’s great!

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