Renewable energy stocks spike after Paris climate deal

Stocks in renewable energy companies rose on Monday, the first day of trading after world leaders agreed to a major climate change agreement. 

A top solar energy index was up 4.5 percent and a separate clean energy fund rose by 1.4 percent on Monday, Reuters reports. 

{mosads}Fossil fuel companies, meanwhile, saw their prices tumble: Coal giant Peabody Energy Corp. fell by 12.6 percent, while Consol Energy Inc. dropped by 3.3 percent. 

Nearly 200 countries agreed to a climate deal in Paris on Saturday, pledging for the first time to reduce their carbon emissions as a way to confront global warming. The deal includes a commitment to more renewable energy from major polluters including the United States and China. 

Analysts expect the climate deal to help green energy firms, with Goldman Sachs telling Reuters that manufacturers of wind turbines, solar panels, electric cars and lithium ion batteries are likely to benefit. 

But some financial analysts warned that the deal shouldn’t lead to massive new investments in renewable energy stocks because it isn’t legally binding. Some are concerned the United States, a leading carbon emitter, could fail to meet its climate pledges should a Republican win next year’s presidential election.

But White House press secretary Josh Earnest said Monday that he doesn’t expect that to happen, given the new business renewable energy companies could see after the deal takes effect. 

“We will see in the years ahead that there is a powerful economic incentive in the United States for us to follow through on our commitments and make sure that other countries are doing the same,” he said. “That will create a tremendous opportunity for American businesses.”