Waiting for Growth in the Non-OECD, the March issue of TerraJoule.us, discusses the compression of the growth spread, between developed and developing economies over the past three years. Higher rates of global growth, during a time of demographically-driven slow growth in the OECD, depend heavily on development and investment in the Non-OECD. Optimistically, TerraJoule.us concludes that 2017 will reveal the effects of universally cheap energy, as this form of thermodynamic-easing acts as a transmission mechanism in developing economies. We pay particular attention to India in this regard, as a potential driver for global demand and especially oil demand.
In the second essay of this month’s issue, “Portfolio Construction During Energy Transition“, we welcome new writer and analyst Garvin Jabusch of Green Alpha Advisors. Mr. Jabusch’s essay asks several important questions, but mainly explores issues around Modern Portfolio Theory’s applicability, as we head through energy transition into the next decade.
In the continuously updating TerraJoule.us Global Grid Decarb Monitor, projections for marginal growth from wind and solar are maintained for 2017. We recognize the 2017 forecast is rather aggressive, but we maintain our view of better global growth next year.
Finally, The TerraJoule.us Transition Index, composed of 70% ETFs and 30% individual equities, stands at 91.75 having started the new year at a notional value of 100. The Index plays a favored super-theme of TerraJoule.us: that the global economy is transitioning away from liquid fossil fuels, to the powergrid. And, that the costs of fossil fuel extraction and combustion increasingly place the energy-capture technologies of wind and solar power in a favorable position. We note that several of the industrial names in the index were largely stable, during the market volatility seen in the first two months of this year.
–Gregor Macdonald, Editor of TerraJoule.us – A Journal of Energy Transition.