By GRAHAM FROST 23/11/2007
There seems little doubt that climate change is happening now and people expect their governments to come up with a strategy to combat this serious threat to life as we know it. What needs to happen: concerted action to reduce emissions and measures to adapt to the impact of changes already underway. Hopefully, politicians will move this to the top of the international agenda rather than protecting unsustainable short term interests. Assuming we are not all doomed, then some interesting business opportunities are likely to emerge.
Areas such as alternative energy sources, energy efficiency improvements, carbon neutral technologies, carbon and emission trading platforms, carbon capture and storage, fresh water and food supply and storage, sea defences and environmental protection are likely beneficiaries.
Emerging economies are likely to be hit harder by climate change by virtue of their geography and manufacturing orientation. Companies helping them in pollution reduction, and leading in technology development generally, are well placed to benefit from increasing regulation. Emission measurement system providers and monitoring companies will likewise benefit.
Investors and fund providers have latched onto some of these ideas already of course. You should see this theme appearing in general portfolios anyway but if you want to play this trend more directly several fund groups have recently launched climate change funds. They aim to benefiting from the above trends although too soon for us to rate them due to lack of a track record. Worth having on your watch list.