More than 50 countries have pledged to be carbon-neutral by 2050...

Many corporations are setting an even more aggressive goal... carbon neutrality by 2040, 10 years before the goal that the Paris Agreement set for member nations.

More than 200 companies have taken the Climate Pledge, which requires regular reporting, carbon elimination strategies, and the undertaking of credible offsets to get to net-zero carbon dioxide emissions by 2040. Big names that have signed onto the Climate Pledge include tech giants Microsoft (MSFT) and Amazon (AMZN), consumer packaged goods leaders like Procter & Gamble (PG) and Unilever (UL), and global credit-card titan Visa (V).

A bunch of heavy industrial companies have also signed up. These businesses are setting a lofty goal for themselves... It will certainly be tougher for a company like German automaker Daimler's (DAI.DE) Mercedes-Benz to eliminate its carbon emissions than for a software company that mostly lives in the cloud these days, like Microsoft.

Most ambitious of all, two U.S. airlines sit on the list – Alaska Air (ALK) and JetBlue Airways (JBLU). Achieving carbon neutrality by 2040 seems like a tall order for them, given that planes emit a huge amount of carbon when they fly, and a plane that runs on anything other than oil-derived jet fuel hasn't even been invented yet.

Despite the many challenges to both countries and corporations reaching their net-zero carbon goals, it's clear to most that we need to keep moving in this direction...

Last week, the World Meteorological Organization ("WMO") reported that 2021 was one of the seven hottest years since mankind started keeping records. (The Earth was previously hotter when it was new – billions of years ago – as well as at different points long before humans walked the earth, such as in the Neoproterozoic Era, 600 million years ago).

Last year's heat was part of a larger trend. Since the 1980s, each decade has been hotter than the one that came before it. Rising temperatures have contributed to climate change and natural disasters ranging from flooding to fires to hurricanes to extreme summer heat waves.

Technologists are racing to try and find new solutions for energy production that don't contribute to global warming the way that burning fossil fuels does. Clean energy innovators are trying to make renewable energy sources like wind and solar more reliable and productive. Others are working on techniques like carbon sequestration, to pull carbon of the air and store it in a way that doesn't affect the atmosphere.

But while some of the greatest minds out there sprint towards new solutions, an existing technology is staring us right in the face – one that some people think is the best answer to the climate crisis...

According to its proponents, we need to talk about nuclear power...

The problem with weather-based renewable sources is that like the weather, they can be fickle and inconsistent. You can't make solar energy when the sun isn't shining... and sometimes, there just isn't any wind. These weather-reliant alternative energy sources won't be enough on their own to get nations or large businesses to carbon neutrality.

Nuclear power is as clean as solar or wind. The technology has been around since the 1970s and is generally quite reliable. But when things go wrong at a nuclear plant, they go very wrong.

For those of us who were kids in the 1980s during the last act of the nuclear Cold War, the very word "nuclear" is almost equivalent to "apocalypse." I'm still recovering from the anxiety caused by watching nuclear Armageddon films like 1983's The Day After and Testament, and clearly a lot of Gen X is still haunted by similar memories – as well as of the panic that surrounded the partial meltdown in 1979 at Pennsylvania's Three Mile Island nuclear plant.

Just last week, a meme version of this 2021 tweet was going around...

Source: Twitter/@michaeldthomas

While worries of nuclear war-based annihilation have mostly faded into the background after the Cold War ended, concerns about the safety of nuclear power linger. Those that couldn't remember the 1986 disaster at the Soviet nuclear power plant at Chernobyl in Ukraine were introduced to its history by HBO's Emmy-winning 2019 Chernobyl miniseries.

And it was just under 11 years ago that the Japanese suffered a disastrous accident at the Fukushima power plant... the total damage from which is still being assessed in terms of land and water contamination and long-term incidences of radiation-related cancer.

While that accident was determined to be manmade and preventable, it was a great setback for the proponents of expanding the global use of nuclear energy. In Japan, Fukushima led to the closing of nuclear plants, in place of a once-planned phaseout of coal-fired plants.

Nuclear was a bit of a third-rail issue politically for a long time...

The devastation from accidents like Chernobyl and Fukushima looms large, and many people are naturally frightened by the idea of nuclear energy. But U.S. politicians are coming around to the idea...

Historically, the Republican Party has been more supportive of nuclear power, but not incredibly loud about it. But after 48 years of either opposing or staying silent on the topic, support of nuclear as part of a comprehensive zero-carbon strategy made it into the Democratic Party platform in 2020, with former presidential candidates Andrew Yang and Sen. Cory Booker (D-NJ) leading the charge.

Unlike some of the newer or weather-based clean energy technologies, we know nuclear power works consistently and reliably. As time is running out to reverse course on climate change – recall last summer's "Code Red for Humanity" report – people are increasingly willing to stop looking for the perfect and embrace the available when it comes to alternative energy production.

China plans to build more than 150 reactors in the next 15 years to meet its growing energy requirements, which it is already having trouble meeting given frequent reports of industrial brownouts. The country is set to become the world's largest generator of nuclear power and is currently investing in molten-salt reactors. Molten-salt technology uses liquid nuclear fuel versus rods, which reduces the risk of meltdowns.

Asia in general is barreling full force into nuclear, as the rest of the world is just beginning to re-open the conversation...

Source: Statista

Over in Europe, France will spend $1.1 billion on nuclear power research and development (R&D) by 2030... and the Netherlands is extending the life of one reactor while committing $566 million to building two more.

Here in the U.S., the November infrastructure bill included $6 billion to extend the life of existing plants, and another $2.5 billion in R&D for nuclear technologies.

These investments represent a reversal to a long trend...

Few reactors had been built between the 1970s and very recently, and many of the first-wave reactors in the U.S. and Europe are being closed. As the Wall Street Journal explained earlier this month...

Worldwide, 450 reactors generate 10% of the total electricity consumed today, down from more than 15% in 2005, thanks to a rapid global build-out of power capacity that has largely left nuclear behind. Nuclear power in the West will start to collapse like coal generation unless aging reactors are replaced with new plants.

A key country to watch will be Germany. Nuclear at one point accounted for 25% of the country's energy, but Germany stopped building new plants in the late 1980s in the wake of the Chernobyl disaster. After Fukushima, Germany shut down almost half of its nuclear capacity and accelerated its phaseout of nuclear. Now, Germany gets just 10% of its power from nuclear, despite being the most environmentally focused industrial power in the world.

As in Japan, deemphasizing nuclear led to the extension of coal reliance in Germany. Now Germany trails nuclear-friendly France, emitting 8 tons of carbon dioxide per person to France's 5 tons.

Right now the EU is battling over a proposal to include nuclear as a "green" sustainable energy source, even as Europe continues to rely on fossil fuels for most of its power generation...

Source: Bloomberg

It does feel like the tide of public opinion about nuclear is slowly changing. As Columbia University climate economics professor Gernot Wagner wrote in the Journal...

Nuclear power comes with risks. So does a warming planet.

It has gotten warmer since the 1980s... and with that warming, the risk equation on nuclear power has shifted.

Right now, there's one obvious way for investors to play the trend of the world warming back up to nuclear power...

Uranium.

Admittedly, I don't know a ton about the uranium market. But despite commodities not being my regular beat, I actually made my highest annualized return of my investing career in a uranium mining company...

Back in late 2006, I bought shares of a small uranium miner called Uramin that traded in Canada and had mines in Namibia, South Africa, and the Central African Republic. Uranium prices had just run from $10 per pound to $40 per pound, as supply shortages hit the industry... A steady supply of uranium from nuclear warhead decommissioning had begun to dry up.

Uramin got bought out for about 4 times what I paid for it, just six months later in June 2007. The acquirer – French nuclear power company Areva – was smart... within a year, uranium prices spiked to more than $130 per pound, before later crashing back to earth...

Source: St. Louis Federal Reserve Bank

I wish I had another Uramin to offer you right now... Investments like that may only come around once or twice in a career. But if you're bullish on our need to consider nuclear power as part of the green energy equation, one way to play it is the Global X Uranium Fund (URA), which invests in uranium miners and other producers of nuclear components.

The need to go green continues to transform the way companies do business and how big investors are allocating their money...

It's such a big deal that I put together a brand-new special presentation on how environmental, social, and governance ("ESG") investing will affect the markets in 2022. A recent announcement from one of the most powerful financial authorities in the world has begun to trigger the global shift of $7.1 trillion... and it could lead to one of the biggest investment opportunities since the creation of the Internet. In my presentation, I explain all the details – including how to gain instant access to three little-known "first mover" stocks in the ESG space – right here.

In the mailbag, circling back to some interesting letters I got about troubled home exercise equipment company Peloton (PTON), in the wake of last night's news that it hired consultant McKinsey to try and clean up things...

Do you think nuclear power should be part of the green energy equation? What worries do you have about it? Share your thoughts in an e-mail by clicking here.

"I believe Peloton's stock price loss is due to a number of factors, as detailed in your well-written piece.

"(1) However, I also think that Peloton has a 'New York' (snobby) presentation that worked very well for a while. Peloton appears to want to change this perception: I have noticed the recent ad playing which shows a somewhat lumpy, average Joe working out with Peloton equipment. But it may be too late for the company to recover from their elitist reputation.

"(2) As a related matter, by interjecting themselves in the political fray on the Democrat side, this posture has hurt the company's stock. I am referring to the alleged Peloton software rejection of the shopworn 'let's go Brandon' moniker, although allowing users to enter any manner of hateful anti-Trump sayings. By doing this, Peloton might be alienating 50% of the U.S. population. My second point is related to point #1 above.

"Note- I am a long-time exercise fanatic and retired advanced degreed professional. Due to the points I have mentioned, I would never purchase any Peloton equipment, although I may buy their stock if it got cheap enough. Just my take. Thanks." – Paul E.

Berna comment: I think your observation is valid, Paul. But brands can't be all things to all people. Peloton may be picking a side, but that is increasingly how brands survive and stay relevant in 2022. You can't please everybody... and when you try to, you also may fail.

"Hi Berna, Thanks for the article about Peloton! My girlfriend bought a Peloton about a year ago and loved it for the first [five] months and then started to slip on making the classes.

"I didn't buy in at the time because I am pretty thrifty but then started to notice that I was really feeling out of shape, and it was affecting my life. So I purchased myself a new Peloton when they went down to $1495, and I have to say it has been great for both of us. We work out five days a week, either 30 minutes or sometimes 45, and I tell you it is hard to get the same amount of cardio anywhere else. When riding on the road, I typically do 10 to 20 miles without breaking a sweat and I have done plenty of 50 to 100-mile rides on the road, which I love, but take a lot of time. In 30 minutes on the Peloton, I am dripping sweat, which never happens to me at the gym or on the road bike, so I intend to keep it up!

"I feel much better, I look better, and it is well worth the $39 a month. The things that have me hooked are the true 30 minute workout, the lack of travel, the heavy sweat hard to get anywhere else, and the competition and camaraderie amongst my fellow cyclists around the world. I hope this helps and I really enjoy the newsletter! Cheers." – Mark Z.

Berna comment: Mark, you just articulated the bull case for Peloton as a comeback kid. Users really do love it.

Regards,

Berna Barshay
January 19, 2022