The International Climate Change Negotiations are in full swing and countries have agreed on the need to carefully monitor our climate. The conference brought to light the realities of environmental measures enacted that could be a boon to the alternative energy industry and related exchange traded funds (ETFs).
According to Rebecca Lefton, Andrew Light and Daniel J. Weiss for American Progress, the International Climate Change Negotiations dispelled the myths and revealed the truths about how the world is responding to global climate change:
- Both China and India are planning for emissions reduction and low-carbon development. China is considering raising fuel economy standard for passenger cars to 42.2 mpg from current 36.7 mpg. China is also trying to reduce energy intensity, or energy consumption per unit of GDP, and increase generation of renewable energy. India is planning the most ambitious solar energy goal in the world and has taken steps toward quantifying greenhouse gas emissions.
- Both China and India have agreed to sign new climate agreement so long as it doesn’t inhibit economic growth. Both countries have ratified the Kyoto Protocol and have acknowledged “the scientific view that the increase in global average temperature above pre-industrial levels out not to exceed 2 degrees C.”
- Developing countries do not need to accept binding targets on gas emissions because they have different needs. A majority of global citizens live in poverty and should not be obligated to the same guidelines as developed countries. These developing countries will likely consider future caps.
- Measuring, reporting, and verifying emissions reductions will be accountable by developing and developed countries. China has developed fairly detailed range of quantifying energy and environmental policies. Whereas, developing countries are still improving measurement, reporting and verification capacities.
- Domestic climate legislation and investments in a clean energy economy will help the United States in the clean energy race by boosting job creation and the economy. The American Clean Energy Security (ACES) Act will generate 1.7 million jobs. The act has provisions to assist energy-intensive, trade-sensitive industries competing with firms from countries without reduction plans.
- The U.N. Climate Change Conference slated for December in Copenhagen is part of a process for structuring an international agreement. Upon its success, there will be a new treaty to replace the Kyoto Accord.
- Present mid-term emissions reductions proposals coupled with complementary measures will allow the United States to equal targets to those of other developed countries.
- The United States has already gone forward to reduce greenhouse gas pollution before any potential agreed upon worldwide commitment at the UNFCC meeting in December. Efforts in reducing emissions and investing in renewable energy at the state and federal level have already taken place.
- The E.U. Emissions Trading System has helped reduce pollution by 50 to 100 million metric tons of carbon dioxide per year. The program initially led to windfall profits from polluters, with price spikes for consumers, but revisions has made the program more successful.
- PowerShares Wilderhill Clean Energy Portfolio Fund (NYSEArca: PBW): up 24.7% year-to-date
- Market Vectors Global Alternative Energy (NYSEArca: GEX): up 7.9% year-to-date
For more information on green energy, visit our alternative energy category.
Max Chen contributed to this article.
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.