G20 Renewable Energy

What the G20 Means for Clean Energy Investments

Written by Brian Hicks
Posted April 3, 2009

"We have today therefore pledged to do whatever is necessary to build an inclusive, green, and sustainable recovery."

That's all the Group of Twenty said about renewable energy in its communiqué this week.

You know what, though? That one clause was plenty for us, and plenty to reinvigorate renewable energy stocks' moving forward...

By taking a holistic approach to the reform of global financial institutions and the way money moves, the G20 will ensure the flow of funds into clean energy ventures and national projects.

Just consider the direct chain reaction we've become familiar with over the past year of stock market turmoil. When jobs are lost, consumers lose confidence, and energy spending falls. And despite some impressive discipline within OPEC to lower oil output and fight declining crude prices, black gold has come down hard.

The same whirlpool of confidence goes for many energy stocks over the past year. . . But the most recent quarter of clean energy market gains foreshadows a global alternative energy infrastructure buildout.

It's exactly the kind of inclusive and sustainable recovery effort the G20 countries all agree on, and that broad consensus means profits for investors who connect the dots.

Consider the biggest news item from the G20, the tripling of the IMF's endowment to over $1 trillion. . .

Energy:  the "Missing MDG"

IMF and World Bank leaders have lamented the lag in implementing wide-ranging Millennium Development Goals set by the UN for poor countries. Environmental sustainability is one of the MDGs, but that alone seems to miss the point.

Even before the bubble burst, the head of the Intergovernmental Panel on Climate Change, India's Rajendra Pachauri, said that in one region in India it would take 240 years to provide electricity access at the current rate of rural electrification. That means little or no economic connection to the outside world, and even when recovery comes to New York or New Delhi, such unconnected areas are left years behind the global rebound. So, Pachauri calls energy the "missing MDG."
Worse, in cash-strapped developing nations left in the lurch by all our Anglo-Saxon economic engineering, the recession has meant highly beneficial, community-based energy projects have been scuttled.

That will change. IMF head Dominique Strauss-Kahn was effervescent this week, beaming "the IMF is back!"

And in contrast to the IMF's role in the 90s and early this decade, the Fund should micromanage national finances less and focus on getting money to long-lasting projects with multiplier effects in jobs and economic growth. . . Clean energy projects fit the bill perfectly.


How Would You Spend $1 Trillion?

Along with the major increase in funding that G20 leaders promised together, side discussions between Barack Obama and heads of state from China, India, Russia, and others point to a more concerted heave-ho when it comes to energy and environmental matters. That has to do not only with funding but also a convergence in principles that extends from financial regulation to power consumption.

In contrast to the Bush-era staring contest in which the U.S. would not move on such matters until China and India did, the new administration recognizes the fact of American leadership:

"If China and India with their populations had the same energy usage as the average American then we would all have melted by now," the President said at the summit.

Notwithstanding the sci-fi imagery, the performance of listed clean energy companies from China and India proves just how urgently China's firms are developing ideas and products to meet booming market demand. 

The market, in turn, likes what it sees...

Just take a look at these Chinese solar stocks over the past month:

chinese solar stocks

That's a trading-floor result of policy moves that have accumulated in China over the years, as the central government saw the writing on the wall and encouraged private enterprise to develop solar solutions to China's coal-fired pollution problems.

Smart energy development is not only a great way to get the economy back in gear, but it's also an insurance policy against future spirals of energy costs that can feed inflation, kill jobs, and deplete national resources.

As the financial system is strengthened and rid of its toxic assets, clean energy will emerge as top priority for targeted financing as well as a moneymaking opportunity for retail investors. The G20's commitment to fighting protectionism tells us the flow of products and trade credit will continue, enabling cross-border cooperation and investment.

This April is a wild month for Barack Obama and clean energy market observers worldwide. Just in the next week, the President has to attend a major EU-US Summit and NATO Summit, and he'll be expected to be out in front in consensus-building there just as he was in London.

It's also a busy period for banks and companies eager to tap the renewed cascade of international financial support for clean energy.

That's why I'll be at the Renewable Energy Finance Forum in Rio de Janeiro, Brazil at the end of this month. I'll be in the mix with all the listed firms, banks, and even government representatives as they create exactly the kind of deals the G20 and IMF want to kickstart.

As I listen in, I'll be passing the best opportunities along to Green Chip International subscribers from right there in Rio.

And here in the States, I'll be at the Department of Energy's EIA Energy Conference next week in D.C., getting the lowdown on U.S. energy development and how my government plans to move ahead and stimulate clean energy in this global recovery effort.

If you're going to be there, contact us through the GCS website, and the Green Chip team would be happy to meet you and chat about all the developments we're watching in energy this spring.

It's truly a historic time to be an energy investor, and the upside keeps building.


Sam Hopkins

International Editor

P.S. - Green Chip International subscribers already know about a world's worth of clean energy opportunities. It didn't take the G20 to bring us the double-digit profits we booked in March, but we'll gladly take advantage of the political boost we know is coming from new energy spending. To learn more, click here: http://www.angelnexus.com/o/web/11539