Carbon ETFs/ETNs: Playing Copenhagen

Charles Morand At $126 billion transacted in 2008, up from $11 billion in 2005, the global carbon market is the fastest growing commodities market in the world and, provided that an agreement is reached at the COP15 conference in Copenhagen and that the US adopts a cap-and-trade program, this growth could go on for several more years. Yet this is a market that remains comparatively unknown for a number of reasons, not the least of which is the fact that the rules surrounding it are very complex. Unlike other commodities, to successfully invest directly in...

Biochar’s Likely Market Impacts

Biochar is still mostly a research and cottage industry, yet it has the potential to impact returns for a broad range of investors. Tom Konrad, Ph.D., CFA Biochar, or amending soil with biomass-derived carbon, shows great potential to improve the productivity of soils, as well as to increase the utilization of fertilizers by plants, while sequestering carbon to reduce the drivers of climate change.  On August 10, I went to the 2009 North American Biochar Conference to look at the potential for investors.  Before I went, I took a look at the publicly traded companies...

Environmental Markets: The Next Frontier in Environmental Investing?

The term environmental markets remains foreign to most investors (and environmentalists!), even though these markets represent, in my view, a very compelling investment story. Although we've discussed trading in carbon emissions in the past, I thought I would expand a bit and talk about environmental markets in general, and about good ways to play them. What's An Environmental Market? Environmental markets exist at the confluence of two movements: (a) A growing desire on the part of national and regional governments in several countries to both limit environmentally-damaging behavior and to promote the growth of alternative...

Hedging Your Climate Risks

Whether you agree it's because of human activity or not (and, for the record, I do), there's no doubt that the weather has been a little wacky over the past few years, driving a range of events that have had very real repercussions on businesses and the economy. Hurricane Katrina is one obvious example, but there have also been other, more subtle cases. Many ski resort operators in North America, for instance, were beginning to believe that winter would never arrive on the eastern side of the continent. In the west, we're now being told that cold weather...

Wall Street And Climate Change Get Cosier And Cosier…

A couple of interesting news from Wall Street this week in the realm of carbon finance. Firstly, on Tuesday, JP Morgan announced the launch of what is, as far as I can tell, the first ever bond index with a special climate change risk overlay. In the interest of disclosure, I was tangentially involved with this project. While this overlay probably won't have much of an impact in the very near term, it will be interesting to see what happens once constituent firms are all subjected to some form of greenhouse gas regulation. Second, on Thursday, Lehman...

GlyEco Expands Antifreeze Recycling Footprint

by Debra Fiakas CFA Glyeco recycles waste glycol into reusable antifreeze, windshield wiper fluid and air conditioning coolants for the automotive and industrial markets.   The used coolant and antifreeze liquids are frequently contaminated with water, dirt, metals and oils.  The company uses a proprietary technology at the foundation of its recycling system to eliminate contaminants.  The company focuses mainly on ethylene glycol in its six processing plants. Last month chemical recycler GlyEco, Inc. (GLYE:  OTC/QB) acquired Brian’s On-Site Recycling, a provider of antifreeze and air conditioning coolant disposal services in the Tampa, Florida area.  The deal extends...

Carbon Finance…The Next Bonanza

Few investors outside of Europe have ever heard of the term carbon finance. What some investors might have heard, however, is that Goldman Sachs took, on September 20, 2006, a 10.1% stake in a little outfit known as Climate Exchange plc (LSE:CLE) for approximately $23 million. Admittedly, by Goldman Sachs standards, that’s peanuts. Not to be outdone, Morgan Stanley unveiled a plan on Thursday October 26 to invest a whopping $3 billion in global carbon markets over the next few years…now that’s the kind of money that gets folks talking at the water cooler, especially when it’s in something...

How Energy Deregulation Affects States and Stocks

by Elaine Thompson Bloomberg New Energy Finance, in an executive summary of its New Energy Outlook 2017 report, predicts renewable energy sources will represent almost three-quarters of the $10.2 trillion the world will invest in new power-generating technology. Analysts outline several reasons for this increase in spending, such as the decreasing costs of wind and solar and consumers’ increasing interest in solar panels. Competition between power sources also continues to grow, with products like utility-scale batteries upsetting coal and natural gas’s roles in the marketplace. But more importantly, state-driven renewable portfolio standards pave the way for additional ventures in renewable energy technologies, particularly...

Trading Places: Will America’s Carbon Market Outsize Europe’s?

Charles MorandIn early January, I said the following on the likelihood that the Obama Administration would move on carbon regulations in the near-term: "The next 12 to 18 months are unlikely to produce much in the way of vigorous environmental action on the part of government (barring subsidies for alternative energy related to the stimulus package), especially if it means additional costs on industry." Clearly, I had underestimated the power of another fundamental rule of politics - besides "don't anger the rust belt states that gave you your presidency by burdening their industries with avoidable costs in the midst...
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