HN Explorer

Ask HN: How can I profit from climate change?

8 points by shawdotion ↗ HN
Climate change is a major factor that will shape the future of the global economy and society. The UN says we need to act urgently to avoid the worst impacts by cutting emissions by 2030, but that seems unlikely. Some investors are focusing on the winners of the green transition, such as clean tech or renewable energy, but the real money is in shorting the losers.

Which companies or industries are most vulnerable to the physical, regulatory, or reputational risks of climate change and will likely go under in the next decade? How can we find and short them effectively and efficiently? For example, airlines, ski resorts, coastal real estate, or agriculture? And no, oil companies are not an option because they seem too resilient and diversified.

12 comments

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n2d4
Matt Levine has a great column, and he talks about ESG and anti-ESG a lot. He won't give you specific advice, but if you want to learn more about this dynamic I can highly recommend reading some of his opinion pieces, such as https://archive.is/avrH3
kleer001
Air conditioning retrofit for places that never needed it before
WheelsAtLarge
You would think that shorting would be a guaranteed money maker. The fact that most companies disappear with in 5 years makes it seem that making money by shorting stock is easy. Well, in practice, very few investors can make money, consistently, by shorting stock.

Your best bet is to find companies that can adapt and thrive in a climate change environment. Look into the inflation reduction act passed last year by the Biden administration. There are billions in incentives for climate change businesses. Companies that are created because of the incentives are likely to do well.

peyton
Yeah the next Buffet is gonna be somebody who directs a money firehose to their ESG portfolio. Not a short seller.
[dead] willdough
[dead]
throwawaymaths
For shorts, the cost of time matters, so if you post here and it causes an avalanche that collapses the security, you reduce your risk greatly through collective action. Given the op context, this is worth way more than a few % alpha
bombcar
It is difficult to make money shorting because you have to not only be right about the move, but the timing, too, and companies can stubbornly stick around for way longer than you think they should.
MilnerRoute
Picking stocks is hard. I remember one investor pointing out that the other way to make money off a societal change is to steer your career in more profitable directions.

If you really have an interest in climate change, the Department of Energy is well funded and staffing up.

https://www.energy.gov/careers/jobs

SamReidHughes
Global warming is only about 1 degree Fahrenheit every 2 decades, so the rate of profit or loss is going to glacially slow -- it will be in proportion to its minimal impact on GDP -- compared to other money-making opportunities.
dgloria
Li ion battery producers. Once an alternative is found, they gonna go down, both Chinese and Korean. If I were you, I would rather invest in companies that support small and medium farming, grow your own, agriculture and the such. There's no other way to reduce overproduction and waste than make people buy their food locally.