Coal, solar stocks drop as Trump set to ditch Paris Climate Agreement

Paris Climate Agreement

Former US President Barack Obama signed on to the Paris Climate Agreement in December, 2015. Sipa/USA,Newscom photo by Liewig Christian.

If Trump ditches deal, US, Syria and Nicaragua world’s only non-participants in the Paris Climate Agreement

On Wednesday, after media reported the United States will withdraw from the Paris Climate Agreement, renewable energy stocks fell and coal stocks continued to underperform the broader market in the States.

Despite encouragement from several large coal companies, Reuters sources say President Donald Trump is set to follow through on his campaign pledge to pull out of the global climate pact.

The coal companies were looking to ensure continued financing for foreign coal-burning power plants projects.

So far, there has been no confirmation from Trump on Twitter or through the media.

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First Solar Inc was down 2.5 per cent and another solar energy company, SunPower Corp fell by 2.8 per cent.

Renewable energy stocks were not the only money losers on Wednesday as Peabody Energy, the largest publicly traded US coal company and Arch Coal, each saw their shares drop by 2.8 per cent.

If Trump follows through on his pledge, the United States will join Syria and Nicaragua as the world’s only non-participants in the Paris Climate Agreement.

The decision has geopolitical consequences as well.  Dropping out of the accord will likely further alienate American allies in Europe who are already leery of President Trump.  It may also call into question US leadership and trustworthiness on one of the globe’s biggest issues.

According to Reuters, so far, traders are not betting on a market change-of-heart.

The VanEck Vectors Coal exchange-traded fund dropped by 1.5 per cent Wednesday to $12.68 and is not far from a five-month low hit earlier this month.

The ETF is on track to fall 7.2 per cent this month after rising in the first quarter of 2017.

Van Eck Vectors Solar Energy ETF fell 1.6 per cent on Wednesday, but is still on track to gain about 1 per cent in May.

In a statement, the Solar Energy Industries Association said “Regardless of what the President decides on the accord, we expect America’s solar industry to continue to thrive and create jobs, boost the economy and reduce greenhouse gas emissions.”

Tesla shares bucked the trend and were up 1.3 per cent to $339.44.

 

 

 

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