How to profit from climate change
By
MoneyWeek Editor
John Stepek Dec 08, 2009
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Everyone has to cut back and everyone has to make sacrifices, if we're to save the world.
That's why the world's leaders and their representatives are sitting in Copenhagen, working on reducing our carbon emissions.
So it's hardly the perfect time for the British government's 'Committee on Climate Change' to give the all-clear to building a third runway at Heathrow airport. Apparently, this is entirely consistent with our plans to cut greenhouse gas emissions from air travel back to 2005 levels by 2050. As long as we build a high-speed rail network too. Oh, and as long as we raise taxes on flying, so that passenger numbers grow more slowly.
I have no strong feelings about Heathrow, though I have sympathy for anyone living under the flight path. But this sort of thing really sums up why people get fed up and confused over the climate change debate.
The good news is that you don't have to take a view on climate change to be able to profit from it...
It's easy to see why people get frustrated by the climate change debate. On the one hand, we're hectored in government advertising campaigns (which we paid for) that we should be turning off the standby button on our telly, or we'll kill a polar bear. But then the government can just wave through a dirty great extra runway onto one of the world's busiest airports, and somehow fudge the figures so that it's effectively carbon neutral.
And between the self-righteous world-changers on the one hand, and the ranting petrol-heads on the other, it seems to be nigh-on impossible to get concrete, neutral information on climate change. (Although science journalist Fred Pearce has a decent crack at it in The Telegraph today – check out his idiot's guide to climate change here). So it's easy to get confused and cynical.
The key to profiting from climate change
What's the solution? To put it bluntly, just ignore it. It's a political football. You have no hope of influencing, or making sense of a debate dominated by extremists and politicians. And the good news is that you don't have to. The real issue here is pretty simple. It's all about energy efficiency.
Regardless of whether your aim is to cut carbon emissions, or reduce the use of oil, the key is to make more efficient use of the limited resources we have. And making the case for efficiency should be an incredibly easy sell. So easy in fact, that it's hard to understand why climate change campaigners don't make it a more prominent part of their arguments.
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Let me see – a world where our country is no longer beholden to the Gulf for its oil, or to Russia for its gas? I'll vote for that. A world where our power grids are able to make use of a far larger proportion of the energy generated, where we can see and control how much we spend on heating and lighting our homes more easily? A world where there's more genuine competition between energy providers, and in the long run, lower prices for consumers? I'll vote for that too.
We've been writing about a range of these energy efficiency solutions in MoneyWeek magazine all across this year, including electric cars, smart grids, and alternative energy – not to mention this week's cover on nuclear power. Many of the stocks have done well. Sure, some of the stories are bound to be over-hyped and many of the companies involved will eventually disappoint. But there's no mistaking the fact that there is a broader move (driven by costly oil prices as much as anything else) to find better ways of generating and using energy.
We need to focus on magic bullets
Climate change activists often prefer to ignore technological solutions, or 'magic bullets', as they call them. You can't rely on technology to do the job, they argue. Change – and ultimately, falling living standards – have to be imposed by global governments. That's why we've got the meeting at Copenhagen after all.
That's all very well. But anyone who thinks we can rely on global governments to sort out something this important on their own, needs to take a long hard look at that Heathrow expansion paper. A high-speed rail network? Expanded video-conferencing? More fuel-efficient aeroplanes? They all sound like magic bullet solutions to me.
Trying to bully and tax people into renouncing economic growth won't work. The only way our lifestyles will change is if consumers can see the benefit. So like it or not, the focus of climate campaigners who want to succeed, should be on using technology to create a leaner, more efficient society, not on winding the clock back.
We've more on how to profit from energy efficiency in the next issue of MoneyWeek magazine, out on Friday. If you haven't subscribed, you can get your first three issues free here.
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