The Cop-15 Summit

The Next Green Profit Catalyst

Written by Brian Hicks
Posted August 12, 2009

Today's article comes to us from new Green Chip contributor Alex Koyfman. Holding a degree in law, Alex bring us a unique perspective on the all-important policy side of cleantech development and carbon regulations. With a Russian background, he'll also be able to complement our international coverage. His piece today covers the important COP-15 summit taking place later this year.

Enjoy,

Nick


We've all heard about proposed emissions cuts, gas guzzler taxes, and investor resistance to technologies destined to compete with industries that rely on historically-dominant power sources, such as oil and coal.

What few understand today is that climate change is actually one of the most significant drivers of economy that we're likely to see in our lifetimes.

Where before new sectors opened and prospered in response to technical innovations and the never-ending quest for greater speed, better standardization, and increased volume, we are today — for the first time in history — being influenced by environmental limitations.

And when delegates from 192 nations converge in Copenhagen this December for the historic COP-15 summit, a coordinated multi-national strategy will be drawn up to deal with the predicament.

So whether you accept mainstream scientific opinion regarding climate change, or choose to dismiss it, the facts cannot be disputed.

Enormous resources, both monetary and human, have already been committed to what Billionaire Venture Capitalist John Doerr — the same man who helped bring you household names such as Google and Amazon — has called "nothing less than the re-industrialization of the whole planet."

Below are some of the main reasons why when it comes to cleantech, limitations placed on industry and consumer consumption are a positive economic force.

New Law Means New Work

With the biggest environment summit since Kyoto set to start in December of this year in Copenhagen, hopes run high for a COP 15-mandated global emissions cut of 50% by the year 2050.

The cleantech market, in turn, is expected to respond to international policies such as this by growing by about half, from its 2007/2008 figure of $5 trillion to nearly $7.5 trillion by the year 2015.

The industry's job market should enjoy similar growth, increasing by as many as 20 million positions by 2030.

In the short term, with recession-related investor restraint still quite strong, cleantech stands today as one of the sole areas where manpower is expected to grow.

Nothing Wakes up the Federal Government like a Good War

Whether the enemy is Nazi Germany or global warming, our government seems to spring back to life when we're forced to band together for a common cause.

And if this is a war, then COP15 is the meeting of the Big Three in Tehran.

With over $85 billion in stimulus spending earmarked for the approaching cleantech tidal wave, the slew of proposed and accepted government projects is the biggest we've seen since the New Deal's public works campaigns of the 1930s.

This monumental undertaking, coupled with an additional 8% reduction in overall per-capita energy consumption, will be the impetus behind trillions in federal and private spending through the first half of the 21st century.

In addition to new power plants, a smart grid system designed to optimize energy allocation and delivery has already received billions in earmarked federal dollars.

For a Glimpse of the Future, Look to the Financiers

Even as the economy receded, venture capital interest in cleantech advanced. Growing by a factor of eight between 2003 and 2008, cleantech is viewed by some Silicon Valley venture capital firms as the "next internet."

As many of the VC firms currently jockeying for early positions are the very same companies that backed a number of our current web and software giants when they were just promising startups, the comparison of cleantech to internet is more than merely anecdotal.

With venture capital investments totaling about $8 billion in 2008 alone, and emissions limitations gaining popularity with legislators as well as consumers worldwide, continued interest in this sector seems inevitable.

Want more proof? With COP - 15 looming, Citi, JP Morgan and Morgan Stanley have already published "The Carbon Principles" — a manifesto mapping out the lending strategies of these financial giants in the carbon-regulated global economy of the future.

The conclusion?

Do not view international summits on curbing emissions as a sign of economic or industrial decline.

Quite on the contrary. . .

To the open-minded investor, meetings like the one scheduled to start in Copenhagen at the end of this year are exactly what the doctor ordered to stimulate a receding economy, or an anemic portfolio.

Good Investing,

Alex Koyfman