The Supreme Court has begun debate concerning greenhouse gases as pollutants, giving attention to exchange traded funds (ETFs) focused on alternative energy stocks. This is the first time the high court has entertained acts specifically concerning greenhouse gases, which will give momentum to "green" or alternative energy producers. Murray Coleman for MarketWatch.com adds that Al Gore’s recent recent Academy Award for his documentary along with President Bush’s remarks about greenhouse issues in his state of the union address in January, have given alternative energy stocks a boost.

PowerShares WilderHill (PBW) is up 8% this year, but has lost more than 10% during the past 12 months. This fund is by far the most popular in this space, attracting more than $1 billion in assets in a short period of time after its launch in early 2005. The ETF hit the market with good timing. In the first half of 2005, oil prices were moving dramatically to the upside and people were looking for alternatives. With most of the stocks smaller-cap names, all of the money flowing into that space at the time gave them a nice amount of appreciation. But as energy stocks corrected, so did alternative suppliers. You see some great companies making headway with new technologies, but it’s energy for the future. It’s going to have a lot of ups and downs before alternative energy becomes mainstream.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.