*[Enwl-eng] Investors Seek Ways to Profit from Global Climate Change
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Mar 13, 2013, 5:26:27 PM3/13/13
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*Investors Seek Ways to Profit From Global Warming*
By Matthew Campbell and Chris V. Nicholson on March 07, 2013
Investing in climate change used to mean putting money into efforts to
stop global warming. Morgan Stanley (MS), Goldman Sachs (GS), and other
firms took stakes in wind farms and tidal-energy projects, and set up
carbon-trading desks. The appeal of cleantech has dimmed as efforts to
curb greenhouse gas emissions have faltered: Venture capital and private
equity investments fell 34 percent last year, to $5.8 billion, according
to Bloomberg New Energy Finance.
Now some investors are taking another approach. Working under the
assumption that climate change is inevitable, they're investing in
businesses that will profit as the planet gets hotter. (The World Bank
says the earth could warm by 4C by the end of the century.) Their
strategies include buying water treatment companies, brokering deals for
Australian farmland, and backing a startup that has engineered a
mosquito to fight dengue, a disease that's spreading as the mercury climbs.
Derivatives that help companies hedge against abnormal weather and
natural catastrophes are drawing increased interest from some big
players. In January, KKR (KKR) bought a 25 percent stake in Nephila
Capital, an $8 billion Bermuda hedge fund that trades in weather
derivatives. (The firm is named after a spider that, according to local
folklore, can predict hurricanes.) "Climate risk is something people are
paying more and more attention to," says Barney Schauble, managing
partner at Nephila Advisors, the firm's U.S. arm. "More volatile weather
creates more risk and more appetite to protect against that risk."
Drought is helping spur business at Water Asset Management. The New York
hedge fund, which has about $400 million under management, buys water
rights and makes private equity and stock market investments in water
treatment companies. "Not enough people are thinking long term of
[water] as an asset that is worthy of ownership," says Chief Operating
Officer Marc Robert. "Climate change for us is a driver."
When investors think about global warming, "there is an overemphasis of
its negative impacts," says Michael Richardson, head of business
development at Land Commodities, which advises rich individuals and
sovereign wealth funds on purchases of Australian farmland. The
company's pitch: The gloomy prospect of hotter temperatures, scarce
arable land, and rapidly rising populations will make inland cropland
Down Under---far from rising seas yet close to Asia's hungry
customers---more valuable. The Baar (Switzerland)-based company worked
on more than $80 million in transactions last year, four times its 2011
total, according to Richardson.
Ole Christiansen is also investing to take advantage of rising
temperatures. "Last summer we were exploring in south Greenland, mainly
for gold," says the chief executive officer of NunaMinerals (NUNA), a
local mining company. "It has previously been covered by a glacier, but
most of that glacier has disappeared, so suddenly we had access to a lot
of ground that nobody had seen before." Mining companies spent 524
million kroner ($91.5 million) on mineral exploration in the Danish
territory in 2010, a 75 percent increase from a year earlier, according
to the most recent data available from Nuuk-based Statistics Greenland.
Those figures don't take into account recent deals such as one inked in
November between Anglo American (AAL) and Danish mining startup Avannaa
Resources, which have committed more than $15 million to a joint venture
to explore for copper in the eastern part of Greenland.
Jason Drew is among the investors who have bet about $30 million on
Oxitec, an Abingdon (England)-based startup that's developed a special
kind of mosquito: one that can't reproduce. When an Oxitec mosquito
mates with a wild female, the offspring will not survive to adulthood,
so the mosquito population declines. The company is exporting the
test-tube skeeters to the increasing number of countries coping with
outbreaks of dengue, a mosquito-borne disease whose spread has been
aided by rising temperatures and increased humidity. (Health authorities
in the Florida Keys reported 66 cases of locally acquired dengue in
2010.) "When the mosquitoes move quite rapidly over a relatively short
period of time, human resistance [to the virus] doesn't build up quickly
enough," Drew says.
The United Nations estimates that investments in infrastructure and
technology to mitigate the effects of climate change will total as much
as $130 billion a year by 2030. A leader in this field is Arcadis, a
Dutch engineering firm that offers flood-protection services. The
company has been on a buying spree in recent years, most recently
snapping up ETEP, a Brazilian water engineering and consulting firm.
Arcadis's revenue was up 26 percent last year, to EUR2.5 billion ($3.25
billion), thanks in part to Superstorm Sandy. The company won contracts
from New York's Nassau County and New York City to help bring water
treatment facilities back online. In the past it has worked with
authorities in New Orleans to upgrade levees and in San Francisco to
create a plan to deal with rising sea levels.
Piet Dircke, who oversees water management at Arcadis, says his phone
was ringing nonstop in the days after Sandy. "The climate is changing.
Sea level is rising. That's quite obvious," says Dircke. "At the same
time, the cities that are close to the waterline continue to grow and
have more money and need for protection. It's almost a natural growth
market."
Campbell is a reporter for Bloomberg News in London. Nicholson is an
editor for Bloomberg News in Paris.
http://www.businessweek.com/articles/2013-03-07/investors-seek-ways-to-profit-from-global-warming
*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this
material is distributed, without profit, for research and educational
purposes only. ***
From: "Yahoo Newsgroups" <vasi...@ramapo.edu>
Sent: Tuesday, March 12, 2013 1:02 PM
Subject: News: Investors Seek Ways to Profit from Global Climate Change
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*Investors Seek Ways to Profit From Global Warming*
By Matthew Campbell and Chris V. Nicholson on March 07, 2013
Investing in climate change used to mean putting money into efforts to
stop global warming. Morgan Stanley (MS), Goldman Sachs (GS), and other
firms took stakes in wind farms and tidal-energy projects, and set up
carbon-trading desks. The appeal of cleantech has dimmed as efforts to
curb greenhouse gas emissions have faltered: Venture capital and private
equity investments fell 34 percent last year, to $5.8 billion, according
to Bloomberg New Energy Finance.
Now some investors are taking another approach. Working under the
assumption that climate change is inevitable, they're investing in
businesses that will profit as the planet gets hotter. (The World Bank
says the earth could warm by 4C by the end of the century.) Their
strategies include buying water treatment companies, brokering deals for
Australian farmland, and backing a startup that has engineered a
mosquito to fight dengue, a disease that's spreading as the mercury climbs.
Derivatives that help companies hedge against abnormal weather and
natural catastrophes are drawing increased interest from some big
players. In January, KKR (KKR) bought a 25 percent stake in Nephila
Capital, an $8 billion Bermuda hedge fund that trades in weather
derivatives. (The firm is named after a spider that, according to local
folklore, can predict hurricanes.) "Climate risk is something people are
paying more and more attention to," says Barney Schauble, managing
partner at Nephila Advisors, the firm's U.S. arm. "More volatile weather
creates more risk and more appetite to protect against that risk."
Drought is helping spur business at Water Asset Management. The New York
hedge fund, which has about $400 million under management, buys water
rights and makes private equity and stock market investments in water
treatment companies. "Not enough people are thinking long term of
[water] as an asset that is worthy of ownership," says Chief Operating
Officer Marc Robert. "Climate change for us is a driver."
When investors think about global warming, "there is an overemphasis of
its negative impacts," says Michael Richardson, head of business
development at Land Commodities, which advises rich individuals and
sovereign wealth funds on purchases of Australian farmland. The
company's pitch: The gloomy prospect of hotter temperatures, scarce
arable land, and rapidly rising populations will make inland cropland
Down Under---far from rising seas yet close to Asia's hungry
customers---more valuable. The Baar (Switzerland)-based company worked
on more than $80 million in transactions last year, four times its 2011
total, according to Richardson.
Ole Christiansen is also investing to take advantage of rising
temperatures. "Last summer we were exploring in south Greenland, mainly
for gold," says the chief executive officer of NunaMinerals (NUNA), a
local mining company. "It has previously been covered by a glacier, but
most of that glacier has disappeared, so suddenly we had access to a lot
of ground that nobody had seen before." Mining companies spent 524
million kroner ($91.5 million) on mineral exploration in the Danish
territory in 2010, a 75 percent increase from a year earlier, according
to the most recent data available from Nuuk-based Statistics Greenland.
Those figures don't take into account recent deals such as one inked in
November between Anglo American (AAL) and Danish mining startup Avannaa
Resources, which have committed more than $15 million to a joint venture
to explore for copper in the eastern part of Greenland.
Jason Drew is among the investors who have bet about $30 million on
Oxitec, an Abingdon (England)-based startup that's developed a special
kind of mosquito: one that can't reproduce. When an Oxitec mosquito
mates with a wild female, the offspring will not survive to adulthood,
so the mosquito population declines. The company is exporting the
test-tube skeeters to the increasing number of countries coping with
outbreaks of dengue, a mosquito-borne disease whose spread has been
aided by rising temperatures and increased humidity. (Health authorities
in the Florida Keys reported 66 cases of locally acquired dengue in
2010.) "When the mosquitoes move quite rapidly over a relatively short
period of time, human resistance [to the virus] doesn't build up quickly
enough," Drew says.
The United Nations estimates that investments in infrastructure and
technology to mitigate the effects of climate change will total as much
as $130 billion a year by 2030. A leader in this field is Arcadis, a
Dutch engineering firm that offers flood-protection services. The
company has been on a buying spree in recent years, most recently
snapping up ETEP, a Brazilian water engineering and consulting firm.
Arcadis's revenue was up 26 percent last year, to EUR2.5 billion ($3.25
billion), thanks in part to Superstorm Sandy. The company won contracts
from New York's Nassau County and New York City to help bring water
treatment facilities back online. In the past it has worked with
authorities in New Orleans to upgrade levees and in San Francisco to
create a plan to deal with rising sea levels.
Piet Dircke, who oversees water management at Arcadis, says his phone
was ringing nonstop in the days after Sandy. "The climate is changing.
Sea level is rising. That's quite obvious," says Dircke. "At the same
time, the cities that are close to the waterline continue to grow and
have more money and need for protection. It's almost a natural growth
market."
Campbell is a reporter for Bloomberg News in London. Nicholson is an
editor for Bloomberg News in Paris.
http://www.businessweek.com/articles/2013-03-07/investors-seek-ways-to-profit-from-global-warming
*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this
material is distributed, without profit, for research and educational
purposes only. ***
From: "Yahoo Newsgroups" <vasi...@ramapo.edu>
Sent: Tuesday, March 12, 2013 1:02 PM
Subject: News: Investors Seek Ways to Profit from Global Climate Change
------------- * ENWL * ------------
Ecological North West Line * St. Petersburg, Russia
Independent Environmental Net Service: http://www.bellona.ru/enwl/
Russian: ENWL(discussions), ENWL-inf(FSU information), ENWL-misc(any topics)
English: ENWL-eng (world information)
en...@lew.spb.org, enwl...@lew.spb.org, en...@lew.spb.org, en...@lew.spb.org
Subscription, Moderator: vf...@lew.spb.org or en...@enw.net.ru
Archive: http://enwl.bellona.ru/pipermail/
and http://groups.google.com/group/enwl/
SEE ALSO: http://www.bellona.org (English)and http://www.bellona.ru
(Russian)
RSS: http://groups.google.ru/group/enwl/feeds?hl=ru
(C) Please refer to exclusive articles of ENWL
-------------------------------------
ONLY if your address is subscribed:
Enwl-eng mailing list
Enwl...@enwl.bellona.ru
http://enwl.bellona.ru/cgi-bin/mailman/listinfo/enwl-eng
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