I’m Going Out On A Limb By Saying This…

Heat waves… forest fires… mass migration… disruption to the lives of hundreds of millions of people… global conflict…

This is the dire warning of professor Lord Stern of the London School of Economics following the news that greenhouse gas emissions increased by a record amount last year.

According to the International Energy Agency (IEA), in 2010 a record 30.6 gigatons of carbon dioxide poured into the atmosphere – a rise of 1.6 gigatons on 2009.

In case you’re wondering, a gigaton is a billion tons.

Now, I’m going out on a limb by even bringing this up… Because I know a lot of people are skeptical about the whole climate change issue.

But your views on the increased levels of carbon emissions don’t really matter. The recent data from the IEA tells us something important about the big trends going on in the global economy.

Think about it…

Last year wasn’t exactly a boom year in the developed world. The economies of Europe, Japan and America were all crawling along at a snail’s pace. And consumers spent less, which means less air travel…less trips to the mall…and less shipping of goods.

Yet the most serious recession in 80 years is having only a minimal effect on emissions.


The answer is obvious. With emerging economies now making up just over half of the world’s GDP, emissions are going up regardless of what’s going on in the developed world.

As I mentioned on Wednesday, India and China alone – which account for 2.5 billion people between them – grew economic output at a rate of over 8% last year.

The developed world be damned. It’s “Chindia”…and other big emerging markets…driving the rise in carbon emissions.

This is another facet of the big trend we discussed at the recent Bonner & Partners Family Office meeting in France last week: the growing demand for natural resources as a result of the growth in populations and wealth in the emerging world.

This is not about whether climate change is real or not. Or what should be done about it.

It’s simply the acknowledgment that the more hydrocarbons we burn the more carbon we send into the atmosphere. And the more carbon we send into the atmosphere the more people…and governments…worry about the effects on the climate.

Now why I am telling you all this?

Because no matter what you think personally about the issue, the trend toward green energy solutions is something you should have on your radar right now.

Remember the facts:

  • Since 1800…when we first started burning hydrocarbons for energy…the world’s population has grown from 800 million to 7 billion.
  • Over that time there has been a tenfold increase in wealth in the developed world. And the emerging world is now starting to play catch up.
  • Despite the deepest recession in over 80 years, the effect of this growth in the emerging world is leading to record carbon emissions.

You don’t have to have a Ph.D. in climate studies to see the writing on the wall here. And you don’t need to own a pair of Birkenstocks and frequent the local vegan co-op to see the wide-open investment opportunity either.

As emerging markets continue to grow at record pace, the amount of carbon we send into the atmosphere will increase. And as these emissions increase so will the drive toward cleaner sources of energy.

Sooner or later, this will cause a bubble in clean energy stocks. And when it does, it’s going to make a lot of early investors very rich indeed.

One way to play this trend is through the Market Vectors Global Alternative Energy ETF Trust (NYSE:GEX). This ETF provides exposure to publicly traded companies worldwide that are principally engaged in the alternative energy industry.

This is a global ETF, with a 58% weighting toward overseas stocks. And it charges relatively low fee of 0.62%.

The bubble in clean energy isn’t here yet. But just wait until we get another couple of years of record emissions…and some more freak weather.

Then governments will really get their teeth into the climate issue.

And clean energy stocks will really soar…


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