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.”
Update: Many positive responses. But, the argument the right is making is that Al Gore has an agenda with his talks. That he’s talking up saving the environment as a rouseruse to get people to invest in companies that he has stakes in. This is the same style of argument the left has used against politicians on the right - manipulating both markets and public-thought for personal gain. Dick Cheney, for the most egregious example, was hounded by the left for funneling contracts to Halliburton and the Carlyle Group, both of which Cheney had stakes in. In fact, some have argued his investments were an impeachable offense. I get that Gore is on the side of “good”. I understand that argument. But, it doesn’t really address the accusation that he’s talking up environmental regulations that would benefit a select group of ‘green’ companies. Thoughts?
It’s long been known that America’s electricity infrastructure is crumbling. But, with climate impacts (more powerful storms, for example), previous estimates for rebuilding the network are multiplying exponentially. NPR is on the case.
A power pole is bent after severe storms hit the Bemidji, Minn., area on Tuesday, knocking down thousands of trees and causing extensive damage to utility lines. Thousands of customers were left without power.
As hundreds of thousands swelter without power a week after a violent storm pummeled the Midwest and Mid-Atlantic, energy experts say the future will look even worse if the nation’s aging, congested electrical grid isn’t upgraded.
Customers chafe at rising utility bills, but the energy industry warns that the alternative is even scarier: Unless $673 billion is invested in the system, it could break down by 2020, according to an American Society of Civil Engineers report released in April.
The grid’s dependability has become an increasing concern as the system strains to meet increased demand. Bottlenecks in the grid and equipment failures are causing more brownouts and blackouts, energy experts say.
The civil engineers say that if investment in the system isn’t increased by at least $1 billion a year, service interruptions between now and 2020 will cost $197 billion.
MyC4 is a webservice that allows you to invest small amounts of money in African businesses. With 380 million people, and very few banks, capital to expand operations is difficult to obtain. MyC4 screens small businesses for credit worthiness. If approved, they get listed on the website, where the public can bid to invest.
I know, sounds sketchy, but it’s really a legit project, sort of like Kickstarter. It’s been featured on TEDx, BBC, and CNN.
A blog about the interactions between the built environment, people, and nature.
I'm a climate change consultant specializing in climate adaptation, environmental law, and urban planning based in the U.S. In addition to traveling and hiking, I research, publish, and lecture on how cities can adapt to climate change.
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