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The most jarring statistic of this week came from Morgan Stanley energy analyst Martijn Rats, who noted that while 72 per cent of new cars in Norway are electric vehicles, oil consumption in the country hasn’t changed.

This data point underscores the extent to which electric vehicles are not a panacea for climate change, and also the scale of the challenge that decarbonization presents for the global economy.

Increased market penetration for electric vehicles is a necessary but not sufficient condition to address climate change. In Norway’s case, basic GDP growth and population increases raised oil demand more than electric vehicles reduced it. Globally, the combined effects of economic growth, and rising standards of living in the developing world, have fully offset the benefits of limiting internal combustion engines.

Mr. Rats reports that the global population increases by one billion people, and global per capita GDP growth climbs roughly 35 per cent, every 14 years. Both trends drastically increase energy demand.

Longevity and standards of living have huge impacts on energy demand. Morgan Stanley presented a chart showing numerous countries by both standard of living, as measured by the United Nations Human Development Index (HDI), and energy usage.

The HDI is composed of numerous indicators including rural access to electricity, poverty rates, income inequality and internet access. Mr. Rats’ chart (I posted it on social media here) clearly shows that as a country’s HDI rises, so does the per capita energy consumption.

China, for example, has an HDI of roughly 0.75 (the scale goes from 0-1.0) and consumes about 90 gigajoules per capita annually. The United States, with an HDI of 0.93, uses roughly 275 gigajoules per capita per year.

Developing nations seek both economic growth, which raises energy demand, and citizen standards of living. The latter increases the energy intensity – the amount of energy used per person - of the economy.

Decarbonization of the global economy is a tall, tall order. Renewable power will have to triple and quadruple from its current 16 per cent of the total to replace coal, oil and natural gas.

Electric vehicles are part of the solution, but a much smaller one than many believe.

The scale of electrification will substantially increase the demand for strategic metals – copper, cobalt and lithium central among them - and related miners will be major beneficiaries.

-- Scott Barlow, Globe and Mail market strategist

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The Rundown

Short sales on the TSX: What bearish investors are betting against

After more than a year, Air Canada has finally yielded the top spot on the list of companies with the highest percentage of float sold short. Meanwhile, almost half of the ten most shorted ETFs are from the cryptocurrency sector. Could this signal that the crypto rout is still ongoing? Larry MacDonald takes a look at the latest short positioning on the TSX, which - perhaps surprisingly - remains quite bearish overall.

Investors rejoice! These overlooked indicators suggest the war against inflation has been won

Whatever you think caused all this hot inflation, stealthy signs signal it may have crested – bringing huge relief that should help the TSX and global stocks. Billionaire investor Ken Fisher explains how input costs are pointing towards a battle with inflation that has been won.

Saying no to cryptocurrency was a glorious moment for Canada’s investment advisers

With cryptocurrency prices collapsing, everyone in the investment advice industry who declined to trust crypto with client money is vindicated. Rob Carrick provides kudos to all for being willing to look bad in the near term so they could be right later on about what’s good for investors.

My gamble on oil service stocks returned an average return of 434%. Now I’m taking profits in three of them

Robert Tattersall revisits a risky, but as it turns out, profitable foray into small cap investing he first wrote about two and a half years ago. The bet was on distressed oil service stocks, and the returns have been fabulous overall. He’s now taking profits in three of the eight stocks.

The Myth of the Lost Decade looms over the stock market

The spectre of a lost decade for the stock market is rattling its chains once again. Every so often, Wall Street sentiment converges on the idea that the stock market is on the cusp of a dark era stretching years into the distance, during which investors will be lucky to realize positive returns. This time around, the sustained sideways grind of stock markets envisioned by strategists is predicated on the fear that today’s economic strains – slowing growth, high inflation, climate change, etc. – will not be so easily overcome. The problem, as Tim Shufelt tells us, is that there is very little precedent for a lost decade in stocks.

Top GIC rates for investors who only deal with big banks, including a 5 per cent offer

We have a highly competitive market for GICs right now, so much so that big banks have been pushing their rates to new highs even in retail channels, reports Rob Carrick.

Will 2023 be the year of the bond? Asset managers seem to think so

New year investment advice is typically equivocal as so much can go awry over a 12-month period, but there’s rarely been a consensus as clear as a return to bonds for 2023, reports Reuters’ Mike Dolan.

Stocks typically rally in December, but investors have some caution this year

Investors hoping for the year-end to bring stock market gains after a punishing year have history on their side as U.S. equities traditionally rally during the month of December, but many remain skeptical of forecasting a rise, reports Reuters’ David Randall.

Others (for subscribers)

The highest-yielding stocks on the TSX, plus risk data

Number Cruncher: Strategy eyes rebound potential among this year’s TSX ‘dogs’

Number Cruncher: Sustainable dividends from eight companies recently buoyed by new CEOs

Friday’s analyst upgrades and downgrades

Thursday’s analyst upgrades and downgrades

Director buys as NexGen Energy advances the Rook 1 project

Globe Advisor

Why Canada’s regulatory approach to crypto should ‘encourage’ investors

Shift from active to passive funds is accelerating thanks to bond investors

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Ask Globe Investor

Question: In Gordon Pape’s TFSA book, he suggested buying blue-chip stocks to boost the value of an account. As Canadians, can we buy U.S. equities or big U.S. dividend stocks without penalties?

Answer: There’s one problem. Dividends paid into a TFSA by a U.S. company are taxed at a 15 per cent rate, and that money is not recoverable. So, the net benefit of U.S. dividends is reduced by that amount. The reason is that the U.S. does not recognize TFSAs as “retirement accounts.” Dividends paid to a registered retirement savings plan or registered retirement income fund are not subject to this withholding tax.

--Gordon Pape

What’s up in the days ahead

Alimentation Couche-Tard’s stock is up about 15 per cent since the summer, boosted by higher gas prices. But now, prices are dropping. Is it still a good bet for investors? David Berman will have some thoughts.

Five things world markets will be watching in the week ahead

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

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Compiled by Globe Investor Staff

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