What’s behind the current energy crisis? - Newton Investment Management

There’s more than meets the eye in relation to rising gas prices and their effect on the economy.

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  • A new pricing regime will help to address artificially low energy prices, which over the long term could also encourage the expansion of renewables.
  • Government legislation changes in relation to existing commitments risk undermining investment in the renewable energy sector.
  • If commodity prices fall, however, emerging-market countries may stick with the status quo, potentially encouraging energy-intensive industries in developed countries to relocate to the developing world.
  • Stable regulatory regimes are important in order to encourage the development of renewables, thereby bringing down costs over the long term. 

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