Climate Bills and a Green Economy

Climate is Investment Chance of a Lifetime: Deutsche

January 14, 2010

Reuters - Green technologies posed the investment opportunity of our lifetime said Deutsche Bank's global head of asset management, in a study published on Thursday.

A Deutsche Bank report found that companies specializing in energy efficiency and renewable energy such as wind and solar power outperformed peers across the wider global economy last year and expected more to come in 2010.

Clear proof of the threat posed by climate change meant that governments will only ramp up steps to curb carbon emissions and favor clean technologies, it said.

"The shift to a low-carbon economy to mitigate global warming will require the creation of new technologies, industries and jobs on a massive scale," said Kevin Parker. Deutsche Asset Management had $695 billion in assets under management as of September 2009.

"The absolute imperative to prevent climate change is therefore also, I believe, the economic and investment opportunity of our lifetime," he commented in the report.

Deutsche bankers looked on the bright side of a Copenhagen climate summit last December which failed in its main objective to drive global consensus on action to fight climate change.

Their report instead pointed to proliferating national green policies, regardless of a multilateral deal to fight climate change. Copenhagen failed to produce a legally binding successor to the existing Kyoto Protocol.

"What matters far more is that national and local governments all over the world are not waiting for a supra-national framework," said Parker.

"They are already pushing ahead with their own policies that will do far more than international regulation in the short to medium term to stimulate private investment."

The report called for clearer, more transparent policies such as feed-in tariffs which typically guarantee particular prices for electricity generated from renewable sources over several decades, giving investors comfort to fund projects.

Since the 2009 low in global stocks, indices showed that energy efficiency stocks had risen 126 percent and clean energy and technology by 88 percent compared with wider global stocks' 70 percent, Thursday's report showed.

"Climate change is not merely an investment sector that may hold future promise; it is a sector that has already delivered and is continuing to deliver," said Parker.

"That is why we believe institutional investors should be shifting their asset allocation toward climate change."

EU Carbon Loses Momentum, Slides on Lower Energy

January 15, 2010

Reuters - European carbon futures slipped on weaker gas and power prices on Friday, losing momentum a day after jumping four percent to hit a new 1-month high, traders said.

EU Allowances for delivery in December opened down 15 cents before falling down to 13.30 euros a tonne, down 30 cents or 2.2 percent in the first half hour of trading.

The benchmark contracts had recovered most of its losses to trade back up to 13.57 euros on volume of over 600 lots by 0802 GMT, but then started to slide lower, dropping to 13.47 euros by 0807 GMT.

Spot EUAs on BlueNext were down 15 cents or 1.1 percent at 13.25 euros on very light volume of 5 lots traded.

"Yesterday's rally was massively overdone, so carbon's easing as natural gas is off and crude was down overnight," one trader said.

EUAs hit a 1-month high of 13.74 euros on Thursday, but traders could not confirm who was buying as most of the volume was being traded over exchange rather than over-the-counter between brokers.

U.S. crude oil futures fell to just above $79 a barrel and was set for its first weekly drop in more than a month on disappointing economic data and expectations for reduced heating demand in the United States.

British natural gas traded down 4.5 percent to 32.50 pence per therm while German calendar 2011 baseload power was down 40 cents at 50.10 euros per megawatt hour.

CERs were lower with the Dec-10's trading down 20 cents or 1.7 percent at 11.58 euros, and the Dec-12's down 25 cents or 2 percent at 12.05 euros.

The EUA-CER spread sat around 1.70 euros.

Obama Awards $2.3 Billion 'Clean Energy' Tax Credits

January 8, 2010

Reuters - U.S. President Barack Obama unveiled a $2.3 billion tax credit on Friday to boost jobs by promoting clean energy, as new data showed the country's unemployment rate remained stuck in the double digits.

Obama said the credit, from funds earmarked under a $787 billion stimulus package he signed last February, would create 17,000 U.S. jobs and be matched by an additional $5 billion in private capital.

"Building a robust clean energy sector is how we will create the jobs of the future, jobs that pay well and can't be outsourced," Obama said.

"This initiative is good for middle-class families. It is good for our security. It is good for our planet," he said.

High unemployment is one of Obama's most pressing domestic challenges and a monthly payroll report released on Friday served as a reminder labor market conditions remain grim. U.S. unemployment was unchanged at 10 percent in December, while businesses unexpectedly shed 85,000 jobs.

"The jobs numbers that were released by the Labor Department this morning are a reminder that the road to recovery is never straight," Obama said.

Climate change, alongside healthcare and financial regulation reform, is a core goal of Obama's White House.

All require support from Congress, where his Democratic Party may suffer a setback in November congressional elections unless he can start to push the jobless figures down.

The tax credits have been granted to 183 projects across the country involved in technologies that include solar, wind and other initiatives to improve energy efficiency.

On top of the employment resulting directly from the tax credit, Obama said it would lead to "tens of thousands" of additional new jobs.

The White House says the stimulus money has helped prevent the deepest U.S. recession in 70 years from getting much worse, and has renewed its push to boost job creation, which many analysts say warrants more public spending.

Obama held a jobs summit and met with bankers last month to boost lending to small businesses in the hope that would encourage them to hire more workers.

In addition, the House of Representatives has approved an additional $155 billion jobs package to boost hiring, although the Senate has yet to take up its version of the legislation and will first tackle Obama's signature healthcare reforms.

"We have to continue to explore every avenue to accelerate the return to hiring," he said.

Companies that will benefit from the clean energy tax credit include Itron Inc, based in Liberty Lake, Washington, PPG Industries, Inc, based in Pittsburgh, and TPI Composites, Inc, based in Scottsdale, Arizona.

Factbox: New clean energy tax credits
Factbox: New U.S. clean energy manufacturing tax credits