Joe Biden and the democrats have just put forward a US$ 2 trn plan to de-carbonise the US economy over the next 15 years. (Link to Financial Times big read article)

The theory is it will create heaps of new jobs, provide an alternative to the carbon-based energy systems for the last few hundred years and prevent global warming. 

If you think that the Democrats are a shoe-in for the next US election, and they are mostly 9% ahead in the polls, then it might be worth giving this some thought:

• What are they most likely to spend their money on ?
• What companies listed in Australia may benefit from this directly
• What companies listed in Australia may benefit from this as a second order event?
• What companies will suffer from this policy change (directly or second order)?
• What companies listed in the US may benefit from this (if you buy shares directly in US companies)
• And what companies in the US may suffer....
• lastly, if there is a clear winner in a certain area, liste elsewhere, whether it might be worth the effort of a direct investment

I have started with a list of technologies analysts think they will use to achieve this, as a starting point:

• on-shore and off-shore wind farms
• sloar panel makers
• smart grid infrastructure (construction, maintenance and operation)
• carbon-capture and storage
• hydrogen fuel cells
• EVs and its infrastructure (charging stations, battery recycling etc)

As a counter point it would be wise to assume anything linke to the Carbon industry is likely to be negatively effected. So coal miers, oil gas companies etc might be places to avoid.

I havent done much research into what Australian listed companies might benefit from second order effects but the likely winners I can think of are mostly extractive and those that sevice them:

• copper - all that wiring
• Li, nickel, cobalt and graphite - batteries
• Rare Earths turbines and batteries
• Silver - solar panels

There are obviously going to be winners and losers in these spaces and there will no doubt be a very American flavour to the contracts being awarded to supply many of these raw materials. Supply and demand cycles will also have a huge impact of the profitability of each sector.

It would be great to start a discussion regarding individual stocks that might benefit from the above. It could be the next raw materials super-cycle.

My starting point to try and identify potential winners would exclude Lithium miners and companies with mines outside of Australia or Western democracies. Given the political dimension to US:China trade, there could easily be a squeeze on the international supply of rare earths, the vast majority of which come from China. There are, of course, rare earth miners in other jurisdictions including the US with more supply coming on board, but my amateur assessment says this is unlikely to be enough. So LYC and WSA might be a good place to start? Or a well run diversified miner with exposure to multiple segments such as S32?

I have to say this is not an area I would normally invest in as ROE is generally not great (sub 10%). However as a sector it could get very interesting in a few years time once the whole "green new deal" stuff gets going.