Be sure to note the differences between ETFs and ETNs.

The cocoa ETN iPath DJ AIG Cocoa TR Sub-Idx ETN (NIB), currently down 13.6% year-to-date, tries to track the returns available through unleveraged investment in the futures contracts on the commodity from the index along with the rate of interest that could be earned on cash collateral invested in certain Treasury Bills. Cocoa demand has been down, with futures recently losing 3.9% as early speculative buying disappeared, reports Tom Sellen for The Wall Street Journal. Cocoa now goes for $2,353 a metric ton.

The cotton ETN iPath DJ AIG Cotton TR Sub-Idx ETN (BAL), currently up 15% year-to-date, seeks to reflect returns available through unleveraged investment in the futures contracts on the physical commodity from the index as well as the rate of interest that is potentially earned on cash collateral invested in certain Treasury Bills. According to Forrest Laws at the Farm Press, the cotton market is “biding its time” and futures are steadily climbing and could hit the high 60-cent range by December. Growers are worried about excessive rain in the Cotton Belt, which has delayed planting.

The coffee ETN iPath DJ AIG Coffee TR Sub-Idx ETN (JO), currently up 15% year-to-date, tries to mirror the returns available through unleveraged investment in the futures contracts on the commodity from the index along with the rate of interest that may be earned on collateral invested in specific Treasury Bills. Coffee prices could face a price spike and demand is on the rise, the Press Association says. Bad weather has led to a shortage of Colombian Arabica.

The carbon market ETN AirShares EU Carbon Allowances (ASO), currently down 4.4% year-to-date, intends to reflect the performance of a basket of exchange-traded futures contracts for European Union Allowances, which is an entitlement to produce 1 metric tonne of carbon dioxide that is transferable in accordance to the European Union Greenhouse Gas Emissions Trading Scheme.

On Wednesday, Republicans in the U.S. House of Representatives pushed to include nuclear power and “clean coal” as alternative energy resources used for electricity, reports Richard Cowan for The Washington Post. Democrats are gunning for renewable sources in wind and solar power.

Provisions still being negotiated include: Permits that may be given to oil refiners. A $17 billion fund for R&D of alternative fuels. Better trade protection for U.S. companies that would have to compete against foreign firms not compliant to carbon-emission rules. Cap and trade bill that may cause higher energy prices.

The PowerShares WilderHill Clean Energy (PBW), currently up 4% year-to-date, seeks to track the WilderHiill Clean Energy Index, which delivers capital appreciation through selection of companies focused on green and renewable energy sources and clen energy technologies.

The energy and climate bill circulating in the House of Representatives may include a scaled-back renewable power target of 15% by 2020, writes Ben Geman for The New York Times. This will require utilities to supply power from wind, solar and biomass sources.

The draft limits sources for biomass harvesting. Municipal solid waste will be counted among sources of renewable energy. Energy efficiency resource standard (EERS) are no longer included.

Max Chen contributed to this article.

There’s a battle over cotton that could affect its exchange traded note (ETN), and it’s anything but soft and fluffy.

The United States and Brazil have been in a war over cotton subsidies for around six years, with the United States on the losing end. The World Trade Organization has gotten involved, and things could get cotton-pickin’ scary. So far, the WTO has decided the Unite States is breaking the rules by subsidizing cotton exports. Sanctions could be in the billions of dollars, reports Stephen Beard for MarketPlace.

The Brazilian government is deciding whether or not to claim the sanctions, with a decision being made next year, reports Reuters.

Down under, a drought in Australia has put the cotton industry in a tight squeeze. The recent drought-like conditions have caused the entire continent of Australia to lose all of their cotton-producing regions, and growers have turned to other options, according to Michael Edwards for ABC News in Australia.

While one farmer says cotton gives a better return per hectare than any other crop, it’s also a water intensive endeavor. Its crop last year was the worst in three decades – so bad that many farmers are not even bothering with it this year.

Luckily, the United States is actually the leading cotton exporter, and second to China in production, so Australia’s falling production shouldn’t weigh down the industry too much.

iPath Dow Jones-AIG Cotton Total Return Sub-Index ETN (BAL) gives exposure to this shrinking industry through futures contracts, and is 100% cotton. Since its July 22 inception, it’s down 3.1%.

A cotton shortage could wind up stretching returns in this fund. The cotton industry is projected to produce 124.5 million bales in 2008-2009, down 1.4 million bales since July. World production is predicted to be down 2.8 million bales from July, according to the Cotton World Fax Update.