Here’s what Biden’s rejoining the Paris Climate Accord means for investors

Yahoo Finance’s Alexis Christoforous and Sibile Marcellus discuss Biden’s climate push.

Video Transcript

ALEXIS CHRISTOFOROUS: In one of his first orders of business as President, Joe Biden reversed a Donald Trump order and resigned the United States to the global Paris Climate Agreement. But what are the implications for investors? Yahoo Finance's Sibile Marcellus dug into this one, and she's here now with the answers. Sibile?

SIBILE MARCELLUS: That's right, Alexis. So this is what it means for investors. By rejoining the Paris Agreement, President Biden could improve the outlook for green energy investments in the US as a result of this. Now, Biden rejoined the Paris Agreement on his first day in office, so clearly reversing an aspect of his predecessor's America first foreign policy. And he's also signaling, Biden, that he is putting climate change at the very top of his priorities right along the US economic recovery, the national vaccine rollout, and combating the coronavirus.

Now, when former President Trump withdrew from the Paris Agreement, he famously said, quote, "I was elected to represent the citizens of Pittsburgh, not Paris." And he went on to say the Paris Agreement was a punishment for Americans, specifically those living in places like Pittsburgh and Detroit, Michigan. Now, the Paris Agreement encourages the nearly 200 countries that signed it to gradually phase out fossil fuels and adopt green energy alternatives. Now, President Biden has a $2 trillion climate plan, and he says that he wants to quote, "put the US on an irreversible path towards net zero carbon emissions by 2050."

Now, according to UBS, Biden rejoining the Paris Agreement is not going to have an immediate market impact, but it will be very important for sustainable investment over the next couple of years. And we're already seeing that start to take shape, with global investment pouring into the US. Now, for an example-- Greencoat Capital. Now, that is a renewable investment giant in the UK. They have more than $8 billion in assets under management.

They have already announced that they're pouring money into the US into wind farm technology in Texas. So you can expect a lot more of that to come. Global investment very likely during the Biden administration.

ALEXIS CHRISTOFOROUS: All right. Sibile Marcellus. Thanks so much for that.