Sunday, November 30, 2008

Canadian Government Green Incentives

As reported in Prius Chat, in 2007, the Harper government announced a tax on high-polluting, large-displacement vehicles and rebates on fuel-efficient vehicles through the ecoAuto program. The auto industry tax amounts to as much as $4,000 per vehicle in the case of fuel-inefficient V8s, this represents 220 million in additional tax revenues over 2 years. In order to reduce GHGs, federal rebates encourage Canadian consumers to buy smaller, more fuel-efficient vehicles. The ecoAuto program, is an integral part of Transport Canada's ecoTransport strategy. People who purchase or lease a highly fuel-efficient vehicle, get a rebate of up to $2,000. (at a cost of 160 million over 2 years).

ecoENERGY Retrofit is a Canada wide program that provides federal grants and incentives to homeowners and small and medium-sized businesses, industry and public institutions to help them invest in energy and pollution-saving upgrades. In addition to the grants available under the ecoENERGY program, selected government agencies also offer grants and incentives to homeowners who conduct energy saving upgrades. To review these agencies by province click here.

There are a host of programs aimed to help spur the biofuels industry in Canada. Grants, tax exemptions and technology funds offer resources for biofuels start-ups. For a comprehensive list of federal and provincial government biofuel programs, click here. Includes Federal, BC, Alberta, Saskatchewan, Manitoba, Ontario. At this time there are no funding programs for biofuels in Newfoundland, New Brunswick, PEI, Northwest Territories. Nova Scotia, Québec, and British Columbia have specific tax exemptions in place.

For a searchable database of Canadian government incentives and rebates, click here.

Next: Provincial Government Green Incentives by Region (WEST, PRAIRIES, CENTRE, ATLANTIC, NORTH) / Canadian Municipal Government Green Incentives

Saturday, November 29, 2008

US Government Incentives: Red, White, Blue & Green

The passage of the financial bailout bill included $150 billion in additional (Green) incentives. The tax bill will help the solar and wind power industries remain competitive. This includes inducements to continue to innovate and produce more power at ever more affordable prices.

According to thedailygreen.com, under the new bill, homeowners can receive up to $500 for energy efficiency, $2,000 for geothermal, $2,000 or more for solar power systems, $500 or more for a fuel cell or microturbine, $7,500 for plug-in hybrid cars and state tax incentives (the bill authorizes an $800 million government bond program that encourages states to create incentives for new and existing energy conservation and related programs).

To review a summary of all the current incentive packages and tax breaks for each of the 50 states in an easy-to-search database, click here. (Includes sections on homes, business industries & institutions, clean transportation, teachers & students, building & energy professionals)

For a database of state incentives for renewables and efficiency click here. For technical information, particularly home improvements involving HVAC systems, (renewable energy and energy efficiency), click here.

To see sub-federal information on regional and municipal government responses to peak oil, click here.


Next: Canadian Government Green Incentives

Monday, November 24, 2008

The New International System: The Role of Government

Free markets can be unscrupulously efficient, but unregulated free markets contribute to eco-degradation, starvation and most recently crises in the home, credit and financial markets. A post hoc review reveals that this global economic crisis was caused by doctrinaire conservative economic policies. The tremendous waste of capital can be traced back to the promiscuous lending of the world's central banks (adopted in 2001).

America has some of the freest markets in the world and this has helped to grow the US economy to 13.8 trillion dollars in 2007, one fifth of global GDP, but as we all know now, this market freedom can also have crippling costs.

These events have led Global Politician's Sam Vaknin (PhD), to ask if free markets are dead. "Three of the most important functions of free markets are: price discovery, the provision of liquidity, and capital allocation. In the last 14 months, markets repeatedly failed to price assets correctly. From commodities to stocks, from derivatives to houses, and from currencies to art prices gyrate erratically and irrationally all over the charts. The markets are helpless and profoundly dysfunctional: no one seems to know what is the "correct" price for oil, shares, housing, gold, or anything else for that matter. Disagreements between buyers and sellers regarding the "right" prices are so unbridgeable and so frequent that price volatility (as measured, for instance, by the VIX index) has increased to an all time high. Speculators have benefited from unprecedented opportunities for arbitrage. Mathematical-economic models of risk, diversification, portfolio management and insurance have proven to be useless. Inevitably, liquidity has dried up. Entire markets vanished literally overnight: collateralized debt obligations and swaps, munis (municipal bonds), commercial paper, mortgage derivatives, interbank lending. Attempts by central banks to inject liquidity into a moribund system have largely floundered and proved futile. Finally, markets have consistently failed to allocate capital efficiently and to put it to the most-profitable use."

Free markets may not be dead, but they appear to be under siege. Deregulation is the centerpiece of conservative economics and in the right place and time, deregulation can auger significant benefits. However, the recent dissapearance of over 20 trillion dollars is convincing evidence of the need for greater regulation.

Clearly we need to change our economic focus, we need a balanced approach to managing the myriad challenges we face. Although free markets are invaluable, during periods of economic crises, governments need to actively stimulate markets. A sensible system is one that combines free market democracy with elements of state-capitalism. This approach stops far short of state controlled production or indiscriminate use of capital.

Government investment in innovative commercially viable research and development projects like alternative energy could be worth trillions. This is both industry creation and job creation, just the kind of stimulus the economy needs right now. This would also enhance competitiveness well into the future. Through legislation, regulation and investment, governments can steward our economies without stifling them.

This new international system embraces the unalterable fact of globalization, while understanding that governments have an important role in defining acceptable business practices just as they have a role in legislating civil rights. Limiting unsound or unfair business practices is part of a governments primary mandate. Although corporate entities also have rights, they must be subject to enforceable standards which serve the wider society. Effective legislation and regulation can respect market pressures, while understanding that commerce exists within the context of human welfare.

With appropriate government stewardship, the economy can reflect our values and serve as an instrument of social change. In the wake of the proliferation of Green, we are witnessing the emergence of an ethical-economic world view. There is a growing sense that we can build a more socially responsible, sustainable economy where commerce can be an instrument of social justice.

Sunday, November 23, 2008

People Remain Loyal to Green Even in an Economic Downturn

According to a recent US study, even in this climate of global economic uncertainty, more than three quarters of consumers (77%) define themselves as "Green." Over half (57%) said they made a green purchase decision in the past six months. Almost one quarter, (23%) of consumers reported being "deeply committed" to Green, and a slightly larger segment, (24%), finds green "trendy," particularly for younger consumers 18-34.

Demand for Green remains strong with people buying (or intending to buy) Green products. The range of Green purchasing extends from cleaning and personal care products to cars. (71% said they are interested in buying an environmentally sound car in the future). Whether in traditional media or online, Green consumers are looking for Green information (72% from traditional media and 68% from online sources). The majority of respondents (51%) claimed to use portals as a Green information source. Search came in second (44 %), followed by blogs (21%) and company Web sites (20 %).

This study reiterates the findings of numerous previous studies. Green loyalties are not being eroded by current economic difficulties, these findings support a growing body of evidence indicating that even in a downturn, people continue to identify with Green. For the last ten years people's changing attitudes have been helping Green to grow. We have good reason to believe that this change will continue and governments will see an opportunity to engage a popular idea that can stimulate the economy, enhance competitiveness and exemplify social responsibility.

Next: The New International System: The Role of Government

Friday, November 21, 2008

Global Trends 2025: A Greener World

An energy transition from fossil fuels to alternative sources is inevitable, and "the only questions are when and how abruptly or smoothly such a transition occurs," this according to the top US intelligence panel. This week the Washington Times revealed the contents of a draft report from the National Intelligence Council (NIC). A report that took about 18 months to complete and "engaged hundreds of people around the world in solicitation of ideas."

The world's population is expected to grow by about 1.2 billion between 2009 and 2025 -- from 6.8 billion to about 8 billion people. And India's population will "overtake China's around 2025." But population expansion is not our only challenge.

The draft goes on to say: "The next 20 years of transition toward a new international system are fraught with risks, including possible interstate conflicts over resources." There are two major differences from an earlier report. First is the "assumption of a multipolar future." A second major change involves energy. The 2004 text predicts energy supplies "in the ground" are considered "sufficient to meet global demand." In contrast, the latest NIC report "sees the world in the midst of a transition to cleaner fuels."

"We believe the most likely occurrence by 2025 is a technological breakthrough that will provide an alternative to oil and natural gas, but with implementation lagging because of the necessary infrastructure costs and need for longer replacement time," the draft says.

The panel is predicting that by 2025 China will be the world's second-largest economy and a major military power and Russia will become the world's fifth-largest economy in 20 years, (although the oil boom could catapult it there by 2017). The report envisions widespread appeal of "state capitalism, a loose term to describe a system of economic management that gives a prominent role of the state. Rather than emulate Western models of political and economic development, more countries may be attracted to Russia's and China's alternative development models."

It warns that the U.S. dollar "could lose its status as an unparalleled global reserve currency and become a first among equals in a market basket of currencies, forcing the U.S. to consider more carefully how the conduct of its foreign policy affects the dollar."

The text also says that conflicts over resources could re-emerge, because "perceptions of energy scarcity will drive countries to take actions to assure their future access to energy supplies." "In the worst case, this could result in interstate conflicts if government leaders deem assured access to energy resources, for example, to be essential for maintaining domestic stability and the survival of their regimes," it says.

The report is clear in its implications. As American military and economic dominance wanes, the US will need to have an effective alternative energy program to compete in a multipolar world. As pointed out by one of the reports authors, "the future is subject to influence" and what we do or don't do can make all the difference.

Tuesday, November 18, 2008

Chinese Green Legislation, Part 3: The New Regulations

The Standing Committee of China's 11th National People's Congress (NPC) approved regulations that are designed to curb carbon emissions and promote the adoption of clean technologies. Signed by President Hu Jintao in September, these new Green laws will come into force at the start of next year. The Chinese government also announced a $586 billion stimulus package, some of which will go to the environment.

As reported in Business Green, "the Chinese government has set out a range of targets designed to shrug off its tag as the world's largest polluter, including goals to reduce energy consumption per unit of GDP by 20 percent, double renewable energy capacity and cut pollution levels 10 percent by 2010 compared to a 2005 baseline.Under their provisions, the government will step up environmental monitoring of carbon-intensive industries such as steel, power generation, oil refinery, construction and printing. Industries will also be required to introduce water-saving technologies and encouraged to switch to cleaner forms of energy, such as natural gas and renewables. Businesses and government departments will be required to install renewable energy technologies in new buildings, while industrial and rural sectors will be encouraged to make wider use of waste material, ranging from coal mine waste to livestock slurry. In addition, tax breaks will be introduced on energy efficient and clean technologies, and a number of inefficient products will be banned. Those companies and government departments that use prohibited products will face fines of 50,000 yuan to 200,000 yuan (about $7,313 to $29,250 U.S.). Government departments will also be required to develop their own plans for promoting energy efficiency and recycling, and stimulate investment in clean technologies."

Speaking to the Xinhua news agency in September, NPC Standing Committee member Ni Yuefeng said "the measures are intended to develop a recycling economy that could maximize economic efficiency while minimizing energy consumption and emissions." Although the average energy use per unit of production for carbon intensive industries is still on average 20% higher in China than in developed economies, according to Xinhua, there are some indications that the government's climate change efforts are already showing a modest effect. Official figures indicate energy consumption for every 10,000 yuan of GDP fell 3.66 percent in 2007 to 1.16 tonnes of coal equivalent.

The stimulus demonstrates China's willingness to join the community of nations and help rebuild the financial system. The Green earmarks, along with the new legislation indicate that the government is starting to get serious about joining the community of nations addressing climate change. Although China remains an important contributor of GHG, it is taking steps in the right direction.

World economies are poised to follow Japan and Germany into recession, and although the Chinese economy has slowed slightly, this growth is projected to fall to 9% in 2009, making China the envy of finance ministers everywhere. However, as we all know, there are significant environmental costs associated with such meteoric growth. China's economy is a growing environmental problem for the world, but the world also contributes to China's emission problems. One third of Chinese emissions are attributable to the manufacture of products for export, primarily to Western markets. This new Chinese legislation may begin to slow the tide of Western firms seeking to avoid domestic environmental regulations by exporting their carbon intensive operations to China.

Monday, November 17, 2008

Chinese Green Legislation, Part 2: Solutions and Strategies

China’s environmental laws are inadequate and many Chinese legislators recognize the need to revise the countries Green constitution. As reported in World Watch, "at the previous three annual sessions of National People’s Congress, China’s top legislature received a total 35 bills from more than 400 lawmakers requesting revision of the law, accounting for almost half of all the proposals on environmental legislation."

Environmental responsibilities can not be impartially administered by those who are responsible for economic growth and environmental assessment must become a regular precursor to Chinese development projects. Above all, Chinese laws on environmental protection must serve as a deterrent, and this entails dissuasive punishment of violators.

The prioritization of economic growth over environmental stewardship may be inevitable in the early stages of a nation's development, but as Professor Zhou Shengxian, director of SEPA, says "the Environmental Protection Law no longer suits the current social and economic situation in China, and it is time to update the basic law through green legislation that better serves the country’s drive to build an all-around better-off society."

Reforming China's Green laws is an important step on the road to developing international Green standards. Environmental legislation must set the standard and industry must be made to follow. Although Chinese authorities have pledged to create a resource-saving and environmentally friendly society under the rule of law, this cannot happen without more biting environment protection legislation.

Next: Chinese Green Legislation, Part 3: The New Regulations

Sunday, November 16, 2008

Chinese Green Legislation, Part 1: Progress and Problems

China needs more biting green legislation. China's Environmental Protection Law—its “Green constitution” was first enacted in 1979 and was revised in 1989. Three decades after this law was first introduced, China is the world’s fourth largest economy and despite a series of “Green storms” (harsh crackdown campaigns against polluters and a “green credit” system to deny polluting industries access to bank loans), Chinese environmentalists appear to have struck a glass ceiling.

According to an article in World Watch, "Since 1979, China’s national legislature has enacted 26 laws focusing on or related to environmental protection. Of these, 11 have been adopted in the past seven years, since 2000. Backed by more than 2,000 regulations and decrees, these laws have established a legal framework for China’s green measures aimed at sustainable development. [But] laws without teeth can hardly bite." The result is that economic growth often trumps environmental protection.

"It is typically easier for [Chinese industry] to pay the fine than to take steps to adopt effective pollution control measures, which can cost dozens of times more than the simple penalty. [Further,] the agencies responsible for environmental protection are typically part of local government bodies, they lack the independence and authority to perform their duties. This relationship, along with the lack of oversight on law enforcement," translate to rampant environmental violations.

According to a July report from the State Environmental Protection Agency (SEPA), 110 out of 126 (more than 87%) were approved for construction without the required environmental impact assessment (EIA). "These findings prompted SEPA to suspend approval of EIAs on all industrial projects—with the exception of projects involving pollution control and recycling and reuse—in the basins of four major rivers where environmental violations are rampant: the Hai, Huai, and Yellow Rivers and the Anhui section of the Yangtze."

To further complicate matters, China’s environmental legislation and environmental administrative power are focused on pollution prevention. "Thus, the protection of natural resources is left in the hands of other administrative departments, which also typically manage specific economic sectors whose primary mission is to exploit resources. In the case of water resources, the Ministry of Water Resources is responsible for both the protection of China’s rivers as well the exploitation of its water resources, such as hydropower projects."

Perhaps most problematic is the fact that "current Environmental Protection Law lists economic growth and environmental protection in parallel, effectively weakening the law’s power as a uniquely environment law and causing ambiguity when economic growth and environmental protection are in conflict. Even worse, economic growth is in practice always prioritized over environmental protection, despite the verbal principle of balance."

Despite these problems, the Chinese understand they have a vested interest in revising their Green constitution and as we shall explore in the next post, there are viable solutions.


Next: Chinese Green Legislation, Part 2: Solutions and Strategies / Part 3: The New Regulations

Friday, November 14, 2008

European Green Legislation, Part 2: Laws that Grow Green

In Europe Green Legislation is creating growth opportunities for Green industries. As reported in Engineers IHS, the sale of Air pollution control equipment is being driven by legislation. "Among the major fuel sources, coal is by far the most polluting in terms of emissions, releasing high levels of dust, carbon dioxide, sulfur dioxide and nitrogen oxide. However, technologies such as fabric filters, electrostatic precipitators, flue gas desulfurization and selective catalytic reduction (SCR) [significantly reduce these emissions]." Analysts at Frost & Sullivan indicated, "While the future of coal in power generation remains a challenge in some markets, the emergence of advanced clean coal technologies boosts the market for air pollution control equipment. [T]he Western European air pollution control equipment market earned revenues of €970 million in 2005, with estimates to reach €1.165 billion in 2012."

"Legislation is undoubtedly the most important driver of growth for sales of air pollution control technologies," said Frost & Sullivan industry analyst Jonathan Robinson. "The 'Large Combustion Plant Directive' is the most important among a spate of recent legislation.
The European Union's legislation obligates plants to either implement the necessary technology or face the ultimate sanction - permanent closure."


Next: Chinese Green Legislation

Tuesday, November 11, 2008

European Green Legislation

As reported in the EUobserver, the 27-nation EU pledged last year to cut greenhouse gas emissions by 20 percent compared to 2005 levels by the end of next decade. However, this ambitious emission reduction strategy faces resistance. The most vocal opposition comes from Italy, largely due to claims that the commitment would cost its economy some €25 billion per year (twice as much as the original commission estimates).

Despite disagreements amongst some European Environment Ministers, the French EU presidency tried to put a positive spin on the ministerial session, saying all member states have shown "very strong willingness to step up efforts aimed at wrapping up wrangling over the draft package of green legislation in early December."

"The EU must preserve its leadership", French environment minister Jean-Louis Borloo said. EU environment commissioner Stavros Dimas reiterated Mr Borloo's message and added that efforts to fight climate change were "in absolute comformity with what we should do to tackle economic and financial crisis." He cited new jobs in the renewable energy sector and lower dependency on imported oil as practical benefits.

The most significant hurdle involves reform of the existing emission trading scheme (ETS). Specifically determining the national targets for CO2 emissions among EU states and industry. Some countries - including Italy and highly coal-reliant Poland - would like to see the power sector buying the right to emit carbon dioxide by auction only from 2020, instead of from 2013 as envisaged by the commission. In addition, they insist on establishing a mechanism that would keep European industry on an equal footing vis-a-vis its non-EU competitors. As suggested by Italy, the EU should to "identify sectors that are exposed to international competition and would suffer most by mandatory CO2 cuts in the absence of a broad international agreement on the issue." Recently the EU French presidency and the commission has demonstrated a willingness to discuss the concerns of the highly coal reliant nations and those who stress the need to remain competitive.

Nations like Italy and Poland want free CO2 permits instead of buying them by auction. But three leading environmental NGOs - Greenpeace, Friends of the Earth Europe and World Wildlife Fund - strongly disagree and issued a joint statement critisizing the Italian and Polish governments for their support of "old fashioned, inefficient and wasteful industries" and point out that the resistance of the Italian and Polish governments is at the expense of "innovation and job creation."

Next: European Green Legislation Part 2: Laws that Grow Green

Monday, November 10, 2008

US Green Legislation

All across America Green legislation is on the rise at all governmental levels. The Energy Independence and Security Act of 2007 was signed into law on December 19, 2007. Green legislation is on the rise at the local and State level. According to the USGBC, 13 federal agencies, 27 states, 72 cities, 22 counties and 16 towns have passed various types of green legislation in the US. According to Statenet.com, in 2007, 363 bills pertaining to Green were introduced in state legislatures.

The enacted measures cover a wide variety of topics including study, tax rebates, regulating electric power generating facilities; GHG inventory programs, cap and trade, interstate pacts and emission reduction targets, and global warming index labels on motor vehicles.

The public and their elected officials are not the only ones seeking Green legislation. US institutional investors and corporate businesses have called for Green legislation. As reported in the Boston Globe last spring, 65 investor groups and financial companies, managing a combined $4 trillion in assets signed a statement that urged Congress to pass strict laws to curb GHG. The agreement, calls for federal legislation that would reduce carbon dioxide by 60 to 90 percent by 2050, compared with 1990 levels.

"What businesses need to move forward is a mandatory policy that finally will address the global financial risk of climate change," Mindy Lubber, the president of Ceres, a nonprofit network of investors and environmental groups, said, "It's very hard for businesses to act without certainty. To fully develop the alternative energy industry and spur investment in technologies that reduce pollution from fossil fuels," Lubber said, "Congress needs to mandate limits on carbon dioxide emissions and establish penalties for any company that exceeds those limits. "That's when the new innovators and the new technologies are going to come out."

In January 2008, several large corporations - including DuPont, Alcoa and General Electric - said they favored strict limits on emissions. In a news conference the list of those joining that call included Merrill Lynch, Calvert, Allianz, BP America and the California Public Employees' Retirement System. Others included the state treasurers of Vermont, Connecticut and Maine; the utilities National Grid and Green Mountain Power; the investors Boston Common Asset Management, Walden Asset Management and Trillium Asset Management; and Green Mountain Coffee.

Joachim Faber, a member of Allianz's governing board, said his company believed "it is essential to put a price tag on carbon, thereby enabling market mechanisms to drive emissions reductions and climate protection."The Vermont treasurer, Jeb Spaulding, said he signed onto the initiative to "look out for the financial interests and future" of his state. "The issue of climate change has a substantial impact on the future economy of Vermont," he said, "whether it be in the recreational or agricultural industries. If you look into the future, global warming poses a substantial risk."

Early in October the Senate pushed through major renewable energy legislation in its bailout package, with tax credits that will stimulate economic growth and buoy the stock market. The package includes a one-year extension of the production tax credit (PTC) for wind installations. An 8-year extension of the investment tax credit (ITC) for solar (and) Removal of the prior $2,000 cap for residential solar installation

However, rather than making renewable energy incentives the top priority, the house changed the bill and now clean tax credits are the now lumped with less deserving projects in a massive new taxation section in the restructured rescue plan.

Renewables are an important part of an essential energy mix that will provide green jobs and keep billions of dollars in the US.

The New York Times reports that "Green policies have created 1.5 million jobs over 30 years in California, while eliminating only 25,000." A recent study, "found that while the state’s policies lowered employee compensation in the electric power industry by an estimated $1.6 billion over that period, it improved compensation in the state over all by $44.6 billion."

Green legislation is desirable because it is not only good for the earth, it is also good for investors and the economy. The recent election of President Obama suggests that the federal government will soon be joining State and local authorities in championing green legislation.

Next: European Green Legislation / Chinese Green Legislation

Saturday, November 8, 2008

Green IT Investment, Regulation and Legislation

According to BMighty, Data centers can consume as much power in a year as is generated by five power plants. Investments in Green can help a firm reduce power consumption and protect their data. Green IT can involve HVAC improvement strategies, water cooling, efficient power supply and conversion, and on-site power generation. "Despite the cost savings of a more power efficient data center, for the small to midsize business, often the initial financial outlay can seem overwhelming. But it's important to note that there are ways to green a company's data center easily and cheaply, and the fiscal rewards can be fairly significant."

Writes InformationWeek: "IT execs would be wise to keep an eye on more than the economics of energy-efficient computing." Investing in Green can reduce operating costs but it can also offer intangible benefits that contribute to a company's employee retention and brand appeal. "[A] green reputation helps with employee retention and recruitment." CIO quotes Chris Mines, senior vice president with Forrester Research: "[Employers] see the surveys that say young people are greener, and that's a differentiator for them in the war for talent." Moreover, adds Mines, environmental sustainability will eventually be seen "as a better way to do business, not just because it's the right thing to do, but because major stakeholders -- including shareholders, nonprofit environmental organizations and customers -- will demand it. Because IT is a large contributor to the greenhouse gas emission problem, it also has an opportunity to be a big part of the solution."

Green offers savings in operating costs, enhanced brand appeal, and human resource value in reruitment and retention. The most powerful inducement of all looms on the horizon; legislation that will force business to restrict their energy consumption.


Next: US Green Legislation / European Green Legislation / Chinese Green Legislation

Friday, November 7, 2008

International Investing in Alternative Energy

Some of the best solutions to our environment's most pressing challenges come from outside the US. Brazil has been making biofuels from sugarcane for 30 years, Germany is at the forefront of solar, Australia has dug deep for geothermal, Spain and Denmark all but own the wind. There are undeniable profit opportunities for renewables in places like Germany where demand and government initiatives combine to create 'winning home-grown green technologies' just as there are opportunities in Spanish wind, German solar and geothermal in the land down under. As reported in AngelNexus, a summary of some of the top returning firms reveals that international Green investing in alternative energy can yield significant returns.

Praj Industries (India) - 200% gain in a year
Geothermal Resources Ltd. (Australia) - 300% gain in 18 months
Ecosecurities PLC (UK) - 100% gain in a year
Renewable Energy (Norway) - 155% gain in a year
Sunways (Germany) - 61% in a year

There are also great profit opportunities ahead in several solar equities like SunPower (NASDAQ:SPWR), Evergreen Solar (NASDAQ:ESLR), and Canadian Solar (NASDAQ:CSIQ).

Those who want to profit from Green need to understand that innovation is a global phenomenon.

Thursday, November 6, 2008

Alternative Energy Investments Under Obama

As reported in Time, Obama wants to launch an "Apollo project" to build a new alternative-energy economy. His rationale for doing so includes some hard truths about the current economic mess: "The engine of economic growth for the past 20 years is not going to be there for the next 20. That was consumer spending. Basically, we turbocharged this economy based on cheap credit." But the days of easy credit are over, Obama said, "because there is too much deleveraging taking place, too much debt." A new economic turbocharger is going to have to be found, and "there is no better potential driver that pervades all aspects of our economy than a new energy economy ... That's going to be my No. 1 priority when I get into office."

According to Blogging Stocks, "An Obama presidency would likely mean more to the alternative energy industry than any other factor to date. Obama's 'New Energy for America' plan will aim to put 1 million plug-in hybrid cars on the roads by 2015, reduce greenhouse gas emissions by 80% by 2050 and ensure 25% of our electricity comes from renewable sources by 2025. Obviously, to enact such a bold plan would take a massive investment and mean billions for companies involved in the still-fledgling alternative energy field. With Obama touting the need for alternative energies in our economy, investing in the sector is one of the closest 'sure things' in the investment world."

Expectations are high for individual firms like Evergreen Solar (NASDAQ:ESLR), but as reported in Sunshine Kills Vampires, exchange traded funds (ETFs) are being touted as some of the best investment opportunties, as they offer a smarter, safer and more tax efficient vehicle for investors. Top picks include PowerShares Cleantech Portfolio (AMEX:PZD), and PowerShares WilderHill Clean Energy (AMEX:PBW), the top historical performer in renewable energy exchange-traded funds.

Considering the US still lags behind Europe and Asia in alternative energy, Market Vectors Global Alternative Energy (NYSE:GEX), with its geographically diversified holdings (70% are overseas) represents one of the best opportunities.

Next: International Alternative Energy Investments

Wednesday, November 5, 2008

Obama's Victory and California's Proposition Confusion

Despite Obama's historic victory, in California, two 'environmental' initiatives were defeated yesterday. California's Proposition results are contentious in part because the wording on various ballot initiatives was very confusing. The Propositions on Renewable Energy Generation (Proposition 7) and Alternative Fuel Vehicles, (Proposition 10) illustrate this point.

Proposition 7 on Renewable Energy Generation, was defeated with 65% of Californians opposed. This Prop would have dramatically changed California's energy consumption. Prop 7 has been heralded by some as a way to ease the dependence on fossil fuels. It required electric utilities to produce 20 percent of their energy from renewable resources by 2010, 40 percent by 2020, and 50 percent by 2025. Those who opposed Prop 7 said that it would wipe out the market for small renewable energy companies. According to them, changes in the definition of an eligible renewable energy resource would eliminate most small renewable energy companies as they could never produce the required levels of power (30 megawatts). However, a different section of the guide defines "eligible renewable energy source" with different wording. It is explained as a facility that meets the criteria of using sources such as solar or wind, and is located in or transmitting into the state of California, and smaller renewable energy companies do meet this criteria.

Proposition 10 on Alternative Energy Vehicles was defeated with 60% of Californians opposed. Here again wording was an issue. The way this Prop was worded, a voter giving it a casual perusal might have thought they were voting for the environment. To opponents it amounted to handing a blank check to the Texas oilman funding the initiative. The failed Proposition sought to authorize $5 billion in bonds ($9.8 billion with interest), much of which would provide rebates to buyers of natural gas run vehicles. Because of the significant costs, most taxpayers were opposed and because natural gas powered vehicles pollute as much as diesel and gas, every major environmental group was opposed, including the Alliance for Responsible Energy Policy, Environment California, League of Conservation Voters, Natural Resources Defense Council, Sierra Club, and the Union of Concerned Scientists.

Obama's momentus win can be claimed by all Americans, yet in California, his victory comes alongside the unpleasant irony of Prop 8, and the unnecessarily convoluted issues surrounding Props 7 & 10. This may be a time of great possibility, but as revealed in California, the road ahead will indeed be a steep and arduous climb. Amongst the President elect's many responsibilities, he is tasked to consider fiscally responsible (Green) investments and avoid multibillion dollar greenwashing scams from profiteers like T. Boone Pickens. To borrow from the vanquished Republican, this is a time for straight talk. With a host of environmental challenges and an economy teetering on the brink of recession, America is looking to its government for answers.

The President elect will begin his presidency with a mountain of political capital. This gives us reason to hope that the unparalleled promise afforded by the Democrat's convincing victory will be conducive to effective economic and environmental leadership.

Tuesday, November 4, 2008

Obama's Green Stimulus

As reported in Gristmill, President Obama's 175 billion dollar stimulus program will invest in renewable sources of energy and create as many as 5 million new, high-wage jobs. Obama's emphasis on energy is designed to reduce the amount of oil currently imported from the Middle East.

Obama wants "to create the jobs of tomorrow by unlocking the drive, ingenuity, and innovation of the American people. And [provide] loan guarantees for our auto industry so that they can build the energy-efficient cars America needs to end our dependence on foreign oil."

Obama's Green infrastructure investment will be a priority in the new administration. It will enable the US to take significant steps, through energy efficiency and renewable energy development, to move toward a low-carbon economy. This will enhance US competitiveness and serve as an example for other nations to follow.

When you consider Republican opposition to Green investment, it is easy to understand why there really is little choice for American's who have concerns about either the environment or the economy.

Monday, November 3, 2008

Green Stimulus Part 2: Basic Elements

The Center for American Progress released the Green Recovery, a government stimulus program to create good jobs and start building a low-carbon economy. According to the release, government investment could be repaid by future carbon cap-and-trade revenues. The report indicates that spending $100 billion over two years would create 2 million new jobs, reduce pollution and US dependence on energy imports.

Funding six energy efficiency and renewable energy strategies:
1. Retrofitting buildings to increase energy efficiency
2. Expanding mass transit and freight rail
3. Constructing "smart" electrical grid transmission systems
4. Wind power
5. Solar power
6. Advanced biofuels

Infrastructure investment program: This program can ceate 2 million new jobs nationwide over two years and reduce the unemployment rate to 4.4 percent. The Green Recovery program can get back the 800,000 construction jobs that were lost and provide opportunities to rebuild career ladders through training and workforce development. Moderating domestic energy consumption through green building and retrofits will also put downward pressure on the price of energy. This program can spur reconstruction of local communities and public infrastructure all across America, setting us on a course for a long-term transition to a low-carbon economy that increases our energy independence and helps fight global warming.

Funding mechanisms: Tax cuts totalling $50 billion would assist private businesses and homeowners to finance both commercial and residential building retrofits, as well as investments in renewable energy systems. Direct government spending totalling around $46 billion would support public building retrofits, the expansion of mass transit, freight rail, smart electrical grid systems, and new investments in renewable energy. Federal loan guarantees of around $4 billion would underwrite private credit that would be extended to finance building retrofits and investments in renewable energy. The plan also has $26 billion for retrofitting 20 billion square feet of public buildings in the US. Public building retrofits have the most potential for operating at a large scale within a short time period. According to the report, the average payback period for these investments would be about five years. Spending $26 billion would generate cost savings on energy of about $5 billion per year, which means that total savings would exceed $26 billion roughly five years after the retrofits were conducted.

An Envirowonk article suggests that rail electrification of the major routes, "would, in less than a decade, reduce direct oil use by 250,000 barrels/day due to displacing diesel fuel power trains. It would improve capacity (with no other changes) on the rail by about 15 percent due to better braking and acceleration of rail systems. And, it would offer the chance to move cargo from truck to rail, even further reducing oil use. In addition, the railroad right-of-ways could become the routes for HVDC (high-voltage direct current) cabling to move electricity (renewable electricity) efficiently around the country."

Changing building codes and changing the rules on combined heat-power (CHP) would help spark investment and economic activity today financed by tomorrow's energy savings and power production. Staying within the traditional concepts of cost/benefits, green buildings see far higher productivity (better lighting, improved employee health and retention, lower absenteeism) in addition to the lower operating costs (which are not just 'energy', but also water and often maintenance). And, those productivity improvements are typically an order of magnitude greater than the value of the energy savings.

The benefits of greening schools include the reduced operating costs, improved student performance, reduced absenteeism, improved comfort and better lighting. Their is immeasurable value to the improved student performance, alone.

The building of green infrastructure offers a better future, while providing real opportunities and payoffs. This type of stimulus package will not only create near term green investment, it will also strengthen economic security, national security, and environmental security.

Next: Obama's Green Stimulus

Sunday, November 2, 2008

Green Stimulus Part 1: Rewarding Efficiency

A government stimulus package is a valuable opportunity to make important infrastructure changes. Well before the current crisis hit, Dean Baker predicted a recession and championed the idea of a Green stimulus package to help offset the bursting of the housing bubble. His logic was simple, Federal money should be given in exchange for greenhouse gas emission reductions.

Amongst his suggestions for a Green stimulus package: Give tax credits for people to install more insulation in their homes, solar panels or other improvements that will reduce energy use. This would have the added benefit of employing construction workers, many of whom are now unemployed. Give people a powerful incentive to use mass transit by giving transit agencies money to reduce fares. Pay by the mile auto insurance would reduce greenhouse gas emissions in the auto sector by giving people incentive to drive less. Support the pay by the mile auto insurance by giving a rebate for pay by the mile insurance policies.

In a more recent article for Truthout, Dean Baker encourages energy efficiency, through a 30 percent or 40 percent tax credit for making energy-conserving improvements to homes or businesses. He also understands that we should be thinking about the long-term. "Specifically, we should find forms of stimuli that can get the economy on a more energy-efficient path. This will mean more efficient power plants and transmission lines, increased used of trains and mass transit, and, of course, promoting alternative energy sources. The transformation needed to limit the damage from global warming will take decades and certainly goes well beyond the course of a stimulus package. But a good stimulus package will not only provide a temporary boost to the economy, it can also help set us on this course toward an energy-efficient economy."

This difficult time is also a beckoning opportunity to create a new economy that will enhance our competitiveness. A Green stimulus will animate the economy and create jobs while preparing for the future by laying the infrastructure of an energy-efficient economy.


Next: Green Stimulus Part 2: Basic Elements

Saturday, November 1, 2008

Green Investing Part 4: Top Green Funds and Resources

Green funds and Socially Responsible Investing (SRI) are a broad group of rapidly growing investment options, but not all Green investment opportunities are created equal. For example, in Europe, Green funds saw huge sell-offs in March 2008 with funds in the sector recording €293m ($453m) in asset withdrawals. Although the sector was hit with large withdrawals overall, some funds performed well during this contraction (e.g., New Power and Equity Climate Invest). Overall investors are bullish when it comes to SRI. A 2008 Thomson Reuters Extel Survey of over 7,500 investment professionals from 63 countries identifies SRI as one of the most important growing trends amongst fund managers. The survey said 64% of fund management firms now run up to 5% of their total assets on an SRI basis, as opposed to 47% in 2007. In addition, 87% of respondents said they expect increasing SRI involvement over the next 12 months.

France’s Société Générale came out on top, leap-frogging last year’s best SRI research house Citi, which came in second. Paris-based Cheuvreux, the brokerage and research arm of Crédit Agricole, was placed third. The voting was conducted by over 1,600 buy-side firms, 150 brokerage firms/research houses and 450 of Europe’s largest quoted companies. All data, votes received and methodology applied were independently checked and verified by Deloitte. Other top performers include the following five funds.

Calvert Funds is one of the largest active managers of SRI mutual funds, offering both index-based and actively managed socially conscious funds. Calvert Large Cap Growth Fund [symbol: CLGAX] has outperformed the S&P 500 over the last five years.

Launched in 2001, Winslow Green Growth [symbol: WGGFX] is annually the best performing green fund over the past five years. This small-growth fund invests in domestic companies that that are either in specific green sectors or have shown strong environmental responsibility. Its creators are about to launch a second green fund, called the Winslow Green Solutions Fund.

Founded in 1982, The New Alternatives Fund [symbol: NJALFX] holds companies—both overtly green and less visibly so—that it believes “have a positive impact on the environment.” Many of its holdings are in the renewable-energy space, but it also invests in natural foods companies (like Whole Foods) and those involved in clean water and clean air.

Green Century Funds manages two green funds. Started in 1991, they offer the Green Century Equity Fund [symbol: GCEQX] and Green Century Balanced Fund [symbol: GCLBX]. Both funds seek to track the Domini 400 Social Index Fund, which screens out companies involved in socially or ethically unacceptable areas (alcohol, tobacco, firearms, etc.) and screens in companies with positive environmental, social and governance (ESG) performance. Green Century is nonprofit and promises that its fees and profits are used to preserve and protect the environment.

Powershares Wilderhill Clean Energy [symbol: PBW] is an exchange-traded fund (ETF) that focuses on companies that promote cleaner energy. Founded in March 2005, the fund seeks to mirror the Wilder Hill Clean Energy Index. Other “green” ETFs currently available include WilderHill Progressive Energy Portfolio [symbol: PUW], which focuses on companies that that provide technologies that improve the use of existing fossil fuels, PowerShares Cleantech Portfolio [symbol: PZD],