A landmark deal to curb global warming has dented shares of fossil fuel companies and lifted renewable energy stocks, although some price swings were muted by the non-binding nature of the pact.
The deal forged at the Paris climate summit is widely seen as the most important climate agreement since the 1997 Kyoto Protocol.
It commits rich and poor nations to rein in rising carbon levels and is an attempt to eliminate net greenhouse gas emissions from human activity this century.
Renewable energy companies are expected to see big upticks in investments to develop new technologies, while coal and oil companies may see tougher regulations.
“This deal will help boost the mid- to long-term fundamentals in renewable energy generation, especially solar, while making any further investments in fossil-fuels increasingly vulnerable,” said portfolio manager Thiemo Lang of Zurich’s RobecoSAM, which owns solar stocks.
The MAC Global Solar Energy Index was up 1.9 per cent on Monday.
The iShares Global Clean Energy Exchange Traded Fund, which allows investors to trade a basket of renewable energy stocks, rose 1.4 per cent.
The US Oil & Gas Index slipped 0.5 per cent. Prices of both oil and gas are trading at more than seven-year lows.
Shares of companies that produce coal, seen as dirtier than oil and gas, sank the most.
Peabody Energy Corp dropped 11.3 per cent, and Consol Energy Inc fell 4.9 per cent.
Solar companies welcomed the pact. Their shares have been hammered this year on fears that low oil prices would sap demand for renewable energy, even though the business often relies on government incentives.
“Without question, solar is positioned to make the single biggest contribution of any industry to carbon reduction goals – more than wind, more than efficiency, more than any other technology on the horizon,” SunPower Corp Chief Executive Officer Tom Werner said.
Shares of SunPower rose as much as two per cent before falling one per cent to $US21.28, while First Solar Inc inched up 0.9 per cent.