From ClimateREALISM

By H. Sterling Burnett

The Associated Press (AP) posted a story describing a study by the World Meteorological Organization (WMO) which claims climate change is costing Africa as much as 5 percent of its GDP. Data show this is false. Extreme weather has not become more frequent or severe in Africa, and GDP in the different African regions and particular countries cited by the WMO and discussed in the AP story has grown substantially during recent period of climate change.

Monika Pronczuk, the writer of the AP story, “African nations are losing up to 5% of their GDP per year with climate change, a new report says,” uncritically parrots the WMO’s claims that “African nations are losing up to 5% of their GDP every year as they bear a heavier burden than the rest of the world from climate change.”

“‘Over the past 60 years, Africa has observed a warming trend that has become more rapid than the global average,’ said WMO Secretary-General Celeste Saulo, warning that it is affecting everything from food security to public health to peace,” wrote Pronczuck.

She should have checked the data.

As Climate Realism has discussed repeatedly, hard data from the United Nations and other government and international agencies refute any claims that climate change is making Africa’s weather worse or causing food insecurity. The latter claim has been debunked in repeated Climate Realism articles, here, here, and here, for example, which show that crop yields and production across the continent, except in areas of civil and cross border strife driven by religious and political conflicts, have regularly set records amid modest climate change.

Climate Realism has also shown that recent extreme weather events have not, in fact, been unusual in Africa’s history nor have they been more severe in recent decades, here, here, and here, for instance. In the few countries where food production has been hampered and economic growth has declined across multiple years in Africa, research shows it is consistently due to political strife, from civil wars, cross border conflicts, or political corruption. Climate change has not been a factor.

The main thrust of the WMO report is that because climate change has caused increasingly severe weather, it has also resulted in a GDP decline with African countries having to spend a disproportionate percentage of their incomes mitigating climate change. But since the former is false, the latter is as well. And, indeed, data consistently show substantial GDP growth across the period of recent climate change in the regions and countries discussed in the AP story, and one would presume the WMO report. In fact, the growth rate there has been at or above the world’s average GDP growth rate as a whole. For instance:

• Data from the African Development Bank (ADB) shows GDP growth in the region of West Africa at or above 3 percent since 2000, topping 4 percent two of the four years. The further projects growth in each of the countries for the remainder of 2024 and through 2025, stating; “[g]reater agricultural output, expansion in the services sectors, and reforms to strengthen private sector participation in energy and mining are expected to drive growth in Benin (6.4 percent), Gambia (6.2 percent), Togo (6 percent), Mali (4.8 percent), Sierra Leone (4.6 percent), and Burkina Faso (4.1 percent).”
• Data from the World Bank show that, excluding the high income countries in Sub-Saharan Africa, since 2000, GDP growth in the poorest countries has topped 6 percent five different years, five percent once, 4 percent five times, and only experienced negative growth in a single year, in 2020, the year of the pandemic. The poor countries in Sub-Saharan Africa experienced GDP growth rates of 4.3 percent, 3.7 percent, and 3 percent respectively in 2021, 2022, and 2023.

The AP mentioned Mali and Zambia in particular as countries suffering economic hardship due to climate change, but the data tells a different story. Over the past decade, Mali has seen its GDP grow every year but 2020, with growth topping 5 percent five of the past 10 years (spiking to 7.1 percent in 2014), and topping three percent every other year.

Zambia’s GDP history tells a similar story. Zambia’s growth in 2023 was 5.8 percent, the highest single year during the past decade, and except for the pandemic year of 2020, Zambia’s annual GDP increased, topping 3 percent growth in all but two growth years.

The WMO is a specialized agency of the United Nations whose mandate covers weather, climate, and water resources. It is staffed with meteorologists and other scientists who specialize in weather, not economists, and as such it is not known for its incisive economic acumen or analysis. No one goes to the WMO to analyze economic trends or for its forecasts of economic growth. Based on its uninformed, deeply flawed analysis climate change’s purported threat to Africa’s GDP, it might be a good idea for the WMO to stay in its lane and leave economic forecasting to economists.

Also, it might behoove the AP to do some simple fact checking (it takes just a few minutes through the magic of the internet), looking at existing hard data on trends before promoting economic analyses from organizations without apparent economic expertise. In fact, even when economists pronounce something, its would still be a good idea for the AP to check the data before uncritically parroting a claim as if it were the gospel truth.

H. Sterling Burnett

H. Sterling Burnett, Ph.D., is the Director of the Arthur B. Robinson Center on Climate and Environmental Policy and the managing editor of Environment & Climate News. In addition to directing The Heartland Institute’s Arthur B. Robinson Center on Climate and Environmental Policy, Burett puts Environment & Climate News together, is the editor of Heartland’s Climate Change Weekly email, and the host of the Environment & Climate News Podcast.

By Steve Goreham

Originally published in RealClear Energy.

Headlines promote renewable energy equipment companies as part of efforts to transition to Net Zero carbon dioxide emissions by 2050. Wind and solar system providers, electric vehicle manufacturers, green hydrogen producers, and other green equipment firms form a growing share of world industry. But renewable equipment firms suffer poor market returns, so investors should beware.

The Renewable Energy Industrial Index (RENIXX) is a global stock index of the 30 largest renewable energy industrial companies in the world by stock market capitalization. Current RENIXX companies include Enphase Energy, First Solar, Orsted, Plug Power, Tesla, and Vestas.

IWR of Germany established the RENIXX on May 1, 2006, with an initial value of 1,000 points. This month, the RENIXX stood at 1,013 points, essentially zero value growth over the last 18 years. In comparison, the S&P 500 Index more than quadrupled over the same period. The RENIXX is down three years in a row from 2021, losing about half its value.

Wind turbine manufacturers faced serious financial challenges over the last three years, even with rising sales. Rising costs, high interest rates, and project delays continue to impact the profitability of wind projects and equipment suppliers. The stock of Denmark-based Vestas Wind Systems, the world’s largest supplier, rose only 7% over the last 16 years, and its stock price has fallen 58% from a high in 2021. Vestas struggled to make a profit in 2022 and 2023 and suspended dividends to shareholders.

Other major wind suppliers have also been poor investments for shareholders. The stock of Siemens Gamesa, the number two turbine maker, is down 65 percent since a peak in 2021. Gamesa reported a loss of €4.4 billion in 2023 and received a €7.5 billion bailout from the German government that same year. Other top wind suppliers suffered major stock price declines since 2021, including Goldwind of China (down 77%) and Nordex of Germany (-36%).

Eighty percent of the world’s solar panels are manufactured in China and the top six suppliers reside in China. The solar panel industry is beset by overcapacity and severe competition. Stock prices of the top seven suppliers have all declined by more than 50 percent since 2021. The stock of US firm First Solar has risen since 2021 but remains below its all-time high price reached in 2008.

Tesla, which was founded in 2003, remained the only pure-play, publicly traded EV stock until 2018. By the end of 2021, Tesla’s value had soared to over $1 Trillion, boasting a market value more than Toyota, Volkswagen, Mercedes-Benz, General Motors, Ford, BMW, and Honda combined. But Tesla is the exception.

But in most cases, electric vehicle (EV) companies have been very poor investments. Between 2020 and 2024, 31 EV companies went public on US stock exchanges. Only one of these 31 companies, the Chinese firm Li Auto, saw its price rise since the initial public offering (IPO). Thirty EV firms saw their stock prices fall, most precipitously.

EV company price declines from the IPO price include Fisker (-99%), Nikola (-94%), NIO (-50%), Lucid Group (-75%), and Rivian (-88%). Six others of the 31 companies went bankrupt. Tesla and Chinese firms BYD and Li Auto are the only EV firms profitable today.

ChargePoint is the world’s largest dedicated EV charger company (behind EV manufacturer Tesla), with over 25,000 charging stations in the US and Canada. ChargePoint went public in 2021 by merging with Switchback Energy Acquisition Corporation, valued at $2.4 billion. The firm’s value today is about $585 million, down 76% since 2021.  For fiscal year 2024, ChargePoint lost $458 million on revenue of $507 million.

It’s not clear that any charging company can make money. High-speed, 50-kilowatt EV chargers cost about five times as much as traditional gasoline pumps. Eighty percent of EV charging is done at home, reducing the demand for public charging. ChargePoint, EVgo, Wallbox, Allego, and Blink Charging are all valued today at small fractions of their original IPO price. No EV charger firm is profitable, even after continuing to receive large government subsidies.

Plug Power is a leading supplier of hydrogen energy systems, including battery-cells for hydrogen vehicles and electrolyzers to produce green hydrogen fuel. Founded in 1997, the company went public in October 1999 at a split-adjusted price of about $160 per share.

But during its 27-year history, Plug Power has never turned a profit. According to financial reports, the firm lost $1.45 billion in 2024, up from a loss of $43.8 million in 2018. Its current stock price is under two dollars per share.

Traditional established firms are finding that renewable equipment can be poor business. In 2023, Ford lost $4.7 billion on sales of 116,000 electric vehicles, or over $40,000 per vehicle. General Electric’s wind turbine business lost $1.1 billion in 2023.

The US federal government provided subsidies to renewable equipment companies of between $7 billion and $16 billion per year between 2010 and 2022. But the Cato Institute estimates that because of the passage of the Inflation Reduction Act in 2022, subsidies will skyrocket to about $80 billion in fiscal year 2025.

Without the fear of human-caused climate change and a rising level of government subsidies and mandates, many of these green companies would not exist. It’s doubtful that carbon dioxide pipelines, heavy electric trucks, offshore wind systems, green hydrogen fuel equipment, and EV charging stations would be viable businesses in unsubsidized capital markets.

During this last year, leading financial firms pulled back on their climate change pledges. Bank of America, JP Morgan, State Street, and Pimco withdrew from Climate Action 100+, which seeks to force companies and investment funds to address climate issues and adopt environmental, social, and governance (ESG) policies. But it’s difficult to invest in renewable equipment companies when they are losing money.

Steve Goreham is a speaker on energy, the environment, and public policy and author of the bestselling book Green Breakdown: The Coming Renewable Energy Failure.