Monday, October 22, 2007

Global warming has a financial upside

With panelists telling them they were entering a new dot-com-style boom, more than 100 persons attending a meeting on renewable energy in Coral Gables on Thursday heard how billions of dollars could be made off of global warming.

Venture capitalists, investment bankers, accountants, climate-change consultants, a garbage expert, executives from a cruise line and even a guy selling tractors attended the event sponsored by an arm of the British government. Also there were some stunned environmentalists, not sure what to make of it all.

Among the ways to make money: Coming up with cheaper biofuels, building solar-energy chips into roof shingles, measuring greenhouse gases and speculating in carbon credits.

The underlying message: Global warming is a reality. The world's governments are adapting to it (the United States much slower than Europe) and for smart businessmen, there is a lot of money to be made.

''We're coming into a new era that will be like the dot-com times,'' said Michael Sole, secretary of the Florida Department of Environmental Protection.

While the Bush Administration rejected the Kyoto agreement that dictated the reduction of carbon and other greenhouse gases, Europe has been actively dealing with global warming for some years. Sir Alan Collins, Her Majesty's Consul-General in New York, said that means many British companies are far ahead of U.S. companies in finding ways to make money off global warming.

''There are absolutely an enormous amount of business opportunities,'' said Collins. He represents UK Trade and Investment, which sponsored the meeting in the hopes of spurring an exchange of such opportunities between companies in the United Kingdom and Florida.


Those in the audience were well-aware that in the dot-com era some made fortunes while others lost huge sums. ''We're looking for opportunities,'' said Ricardo Hellmund of TIS Ventures, a Miami-based company made up primarily of investors from Latin America. ``But of course we're going to be careful.''

The key to big profits is finding ways to generate power without relying on fossil fuels, which produce huge amounts of greenhouse gases that scientists say are warming the world to dangerous levels.

One panel focused on biofuel opportunities, particularly looking at ''second-generation'' possibilities that might be more efficient and cheaper than ethanol, either through improved processes, such as butanol, or by turning to new sources of power, such as algae oil.

An afternoon panel discussed how Europe is controlling carbon emissions through a ''cap-and-trade'' policy in which those with high carbon emissions can buy credits from those that have done a better job reducing emissions. A polluting factory in Germany can also be offset by planting trees in Brazil.

In theory, this trading sets up a new currency that allows the free market to set a price for the reduction of carbon, which makes up about 80 percent of greenhouse gases. John Mackle of MGM International, a Miami-based company, described how his firm is now buying and selling carbon credits worldwide -- a business that has proved so successful that Morgan Stanley has now bought a piece of it.

Alex Rau, of the British-based Cheyne Carbon Fund, said that altogether investment firms have spent $12 billion on carbon credits in Europe, speculating they will become much more valuable in the years ahead.

Many attended the day-long session hoping to find a niche for themselves. Sasha Tapic of Strategic Energy Development was there to see about the possibilities for promoting his firm's plans to convert waste into energy. Carnival Cruise Line had two persons -- one the environmental specialist, the other the superintendent of energy savings.

Susan Glickman of The Climate Group was there, ready to advise companies on how to adjust to new economic realities. She said Google and Nike used the group's services.

Here is the full article.