Why Germany's Likely 2020 Climate Goal Failure May Be an Endorsement for Nuclear

May 24, 2020 EDT

According to a Bloomberg article[1], Germany is likely to fall short of its goals for reducing carbon-dioxide emissions even after spending over 500 billion euros by 2025 to overhaul its energy system. A large part of the reason for this failure is Germany’s concurrent goal of phasing out nuclear reactors.

The Bloomberg article highlights that it is unlikely that any nation can reach its goal of cutting emissions without a significant increase in nuclear energy.

Uranium, the key component in nuclear energy, has the potential to benefit if nations begin to ramp up nuclear production.

The North Shore Uranium ETF (URNM) may provide investors with an attractive vehicle to gain access to uranium miners.

Germany’s Environmental Goals
Germany’s ambitious climate goals include reducing greenhouse gas emissions by 40% when compared to 1990, reducing primary energy consumption by 20%, and increasing the share of renewables in energy consumption to 20%, all by 2020.

Germany has made some notable progress on the climate side. Renewables are close to replacing coal, and the use of natural gas is declining. However, it does not appear that Germany will meet its 2020 goals, which puts their even tighter goals for 2030 in question.

Phasing Out Nuclear
The biggest issue behind Germany’s failure is its concurrent goal of phasing out nuclear reactors in response to the 2011 Fukushima Daiichi meltdown in Japan.

Nuclear plants can generate power 24 hours a day, regardless of weather conditions. Renewables, like wind or solar, are not dependable.

On dark, breezeless days, wind farms and solar plants won’t provide much energy to the power grid. On the other hand, when its windy and bright, solar and wind may provide so much energy that prices in the wholesale market may drop below zero.

A Roadmap for the World
Germany’s economy is dominated by services that require less energy and produce less of a carbon footprint than those economies that are tilted toward industry and manufacturing. Therefore, greater problems may also arise for other nations if even Germany is having an issue meeting climate goals.

Thus, it appears that without nuclear energy, the nations of the world will have a difficult time meeting environmental goals.

Wake Up Call
We believe that the nations of the world will come to realize that they will likely need to increase their use of nuclear energy to meet climate goals. Nuclear energy has the ability to reduce climate change without hindering economic growth. It is a 100% emissions free form of energy that can produce power 24/7.

Uranium Is the Key Component of Nuclear Energy
Uranium is the key component of nuclear energy. Should the nations of the world realize their potential and begin to ramp up production, uranium prices are well-positioned to benefit from the possible increase in nuclear energy production.

How may investors gain exposure to uranium?

The North Shore Global Uranium Mining ETF (URNM)
The North Shore Global Uranium Mining ETF (URNM) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the North Shore Global Uranium Mining Index (the index).

By seeking to replicate the index, URNM looks to provide investors with access to both miners and holders of uranium.


[1]Wilkes, William; Warren, Haley & Parkin, Brian, Germany’s Failed Climate Goals: A Wake-Up Call for Governments Everywhere, Bloomberg, 8/15/18

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