The global move towards reducing emissions continues, and in the United States specifically, the federal government is looking to bolster funding for more clean energy projects with its latest bill.
A new bill introduced by the Senate is “a sweeping tax and spending plan that would, among many other things, pour $369 billion into promoting clean energy sources and fighting climate change over up to a decade,” according to a Science article.
“Whether the new deal—dubbed the Inflation Reduction Act of 2022 (summary here)—will clear that 50-vote threshold remains uncertain, and then it must survive a vote in the U.S. House of Representatives,” the article added. “But backers including President Joe Biden are cautiously optimistic that the package, which is the result of more than 18 months of negotiations among Democrats, will become law.”
According to the article, the passage of the bill would make it the largest investment in clean energy, essentially following President Biden’s administrative push for a greener America. The funding would include billions into “energy research and forest and coastal restoration projects,” which supporters are saying could reduce emissions by about 40% by the year 2030.
Given this, investors can certainly rely on investment opportunities in clean energy.
A Beneficiary of Federal Funding?
Government subsidies could push more companies to shore up their clean energy technology. As such, the injection of federal funding could benefit the Global X CleanTech ETF (CTEC).
At a 0.50% expense ratio, CTEC seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global CleanTech Index. The fund invests at least 80% of its total assets, plus borrowings for investments purposes, in the securities of the index and in ADRs and GDRs based on the securities in the index.
The index is designed to provide exposure to exchange-listed companies that are positioned to benefit from the increased adoption of technologies focused on improving the efficiency of renewable energy production and/or mitigating the adverse environmental effects of resource consumption. Overall, the fund gives investors exposure to:
- High growth potential: CTEC enables investors to access high growth potential through companies at the leading edge of a structural shift in global energy use.
- An unconstrained approach: CTEC’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
- ETF efficiency: In a single trade, CTEC delivers access to dozens of companies with high exposure to the clean tech theme.
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