With a newly democratic slim majority in the Senate, the incoming Biden administration has a lot of potential to accomplish its agenda. President-elect Joe Biden presents a robust clean energy plan with numerous moving parts.
This plan will be enacted after President Trump completed 84 environmental regulation rollbacks over the course of a single term. Here's what the plan entails and what companies stand to benefit from the green energy plan.
Biden's clean energy plan prioritizes jobs as much as sustainability
Similar to the Green New Deal (presented by Representative Alexandria Ocasio-Cortez in 2019), Biden's clean energy plan places an emphasis on restoring jobs. However, it's an economic endeavor led through an environmental lens. Industries of focus include energy, infrastructure, and transportation, among others. In total, he aims to create 10 million jobs.
Environmental justice is a big part of the plan, and Biden homes in on resolving inequitable pollution in particular communities as well as prioritizing hiring diversity. Modern infrastructure (like the "second great railroad revolution" and major electric vehicle charging station investments) join emissionless targets and updated fuel economy standards.
Clean electric power with tax incentives, agency creation (like the Advanced Research Projects Agency on Climate), and agricultural investment all have a place in the plan.
Most notably, Biden aims for a zero-emission economy by 2050.
How soon will Biden's clean energy plan start?
In July, Biden announced a clean energy plan that calls for the U.S. to achieve a carbon-free power sector by 2035 and promises a $2 trillion investment towards green energy and infrastructure over four years.— NowThis (@nowthisnews) September 14, 2020
Biden plans to start enacting his clean energy plan on day one. Specifically, he plans to take executive action to reduce methane pollution limits, set new fuel economy standards, permanently protect the Arctic National Wildlife Refuge, and ban leasing on public lands and waters for oil and gas purposes.
He also plans to rejoin the Paris Climate Agreement immediately and require publicly traded companies to disclose climate-related financial risks and greenhouse gas emissions in their SEC documentation. This could drastically improve the standing of impact, ESG, and SRI investments.
After that, he plans to put all the puzzle pieces in place for a successful start to his zero-emission goal that ends in 2050.
How Biden's clean energy plan will get funded
This plan is robust, which also translates to expensive. In fact, it's worth $1.7 trillion. It would really put the pressure on big oil, so there will undoubtedly be pushback from those with vested interest.
He plans to use a fusion of corporate income taxes and government stimulus funds, so it's up to Congress to help him do that. Fortunately for him, Democrats have a slim majority as soon as the Georgia runoff election is certified.
These clean energy stocks could benefit from Biden's plan
Proterra is an EV bus manufacturer that just announced they're going public via a SPAC merger sometime in H1 of 2020. Since Biden's clean energy plan involves requiring all new American-built buses to be zero-emission by 2030, this stock (which will trade under "PTRA" once the deal completes) could be a safe bet. Other companies in the hydrogen, lithium, solar, and wind sectors would be useful.
Already popular ETFs like the Invesco Solar ETF (TAN), Invesco WilderHill Clean Energy ETF (PBW), and ARK Innovation ETF (ARKK) could see even higher swings as Biden moves forth with his plan. The Global X US Infrastructure Development ETF (PAVE) could also see major growth.