Worldwide, global venture capital investment in the green tech sector has climbed to $4.04 billion during the first half of 2010.  This represents a 65% increase from the same period last year, and slightly exceeds the investment record set during the “boom year” of 2008.

Data from The Cleantech Group and Deloitte shows that solar energy garnered about 40% of all investments, attracting about $811 million in funding.

“There’s been a very clear resurgence in solar activity and that is largely responsible for the strong quarter,” notes Richard Youngman, head of global research for the Cleantech Group.

Scott Smith, Deloitte’s U.S. clean tech leader believes this VC investment trend will have a positive impact on renewables and low carbon industries.    “The significant strengthening of corporate and utility investment into the clean tech sector, relative to 2009, is very encouraging, given the key role they will play in enabling broader adaptation of clean technologies at scale,” he said in a statement.

Read the full article here…

U.S. crude prices have fallen 9.7% since March, finishing the quarter down $8.13, the first quarterly price decrease since Q4 2008.  This has triggered worries over the state of global demand in the wake of continued strain in global financial markets and sluggish job growth.

The U.S. Energy Information Administration (EIA) reports growth in gasoline stocks and distillates inventories, disproving forecasts which predicted a fall.  On the other hand, crude stocks dropped by 2.01 million barrels; twice the expected rate.

The onset of Hurricane Alex actually helped to stem the price fall by forcing a stop in 26.3% of oil production and 14.4% of natural gas production in the Gulf of Mexico region.

Read more here…

It appears that between the Gulf Oil spill, climate change uncertainty, rising energy costs and the availability of future supplies has finally shaken American consumers out of their comfort zone.

Long accustomed to cheap and easy access to energy, American consumers have been notoriously resistant to changing their ways to use less energy.  However, according to a recent study by GE, 79% of U.S. consumers would be willing to make short term changes in order to achieve long-term energy benefits.

A full 88% of those polled would start to use devices like smart meters to help them use energy more efficiently, and of this group, 82% say that smart meters and related devices will be “vital technologies” for the future.

Perhaps the most striking result is the 72% of respondents who agree that America’s energy use and consumption habits, if left unaltered, could stifle future economic growth.  This result, GE says, proves that “consumers are ready to think differently about how they use energy.”

“There are some things that are essential to achieving a desired quality of life,” says Bob Gilligan, VP of Digital Energy for GE Energy Services, “and Americans overwhelmingly agree that investing in our nation’s energy future is one of them.”

Read the full article here…

CEO’s of the largest corporations in the world are taking sustainability seriously, and increasingly believe that sustainaibility is an important factor for the health and success of their businesses.

In the largest survey ever conducted on corporate sustainability, the UN Global Compact and Accenture asked 766 CEOs around the world their thoughts on these important issues.  The results were significant:

- 93% believe sustainaibility will be “critical” to the future success of their company

- 80% say the economic downturn has raised the importance of sustainability in saving money and cutting waste

- 81% say sustainability issues were part of company strategy and operations, compared with 50% three years ago

“Achieving greater environmental and social sustainability takes time, effort and a sincere leadership commitment,” said Georg Kell, executive director of the UN Global Compact.  Moving forward, he said, will mean convincing investors that sustainability is actually good for the bottom line.

Read the full article here…

Achim Steiner, the head of the U.N. Environment Program (UNEP), says the world needs a fresh infusion of investment in the new “green economy.” So far, nations around the world have pledged $500 billion for “green spending” on a wide variety of projects, from solar plants to transportation sector initiatives.  However large that number appears, Steiner warns that it is still not sufficient.

Of the $500 billion pledged, 40% of funds comes from China, which means many developed countries are falling short in their commitment to a green economy, Steiner says.  In 2008, the UNEP called for a global investment of $750 billion, equivalent to 1% of global GDP to be funneled into a “Global Green New Deal.”

“The green economy is not a luxury, but a 21st century imperative on a planet of six billion, rising to 9 billion in just 40 years,” said Steiner and Pavan Sukhdev, leader of UNEP’s Green Economy Initiative in a statement released in advance of this weekend’s G20 Summit in Toronto.

G20 delegates re-affirmed their pledge to phase out the “inefficient” subsidies to the fossil fuel industry,  which by some estimates amount to $300-$500 billion/year.  The International Energy Agency estimates that elimination of these subsidies could help reduce greenhouse gas emissions by around 7% over the next ten years.

Read more here and here…

The Organization for Economic Co-operation and Development (OECD) is urging G20 nations to end subsidies for fossil fuels and to follow through with the pledge made after last year’s gathering in Toronto to phase out these massive subsidies over the near- to medium- term.

OECD chief  Angel Gurría calls these subsidies, which by some estimates may be as much as $557 billion a year in developing nations and over $100 billion in the industrialized world, a “wasteful use of scarce budget resources.”  There is a contradiction, he says, because”many governments are giving subsidies to fossil fuel production and consumption that encourage greenhouse gas emissions, at the same time they are spending on projects to promote clean energy.”

According to some estimates, eliminating fossil fuel subsidies may help to reduce total global greenhouse emissions by 10% from their expected 2050 levels.  This would greatly assist  G20 nations with other policy initiatives to mitigate the effects of global warming.

Read more here…

According to an Ernst & Young global survey of 300 corporate executives, 70% of global firms with revenues of $1 billion or more say they will be increasing spending on climate change initiatives over the next two years.

Energy efficiency investments emerged as a major theme from the survey results.   More than 82% of respondents expected to make energy efficiency investments over the next year, and 92% of those polled said energy costs would be high on the list of priorities over that time period.

Melanie Steiner of Ernst & Young said these results show that despite uncertainty over climate change, “companies are really taking action anyway, because they’re seeing that this is a business issue and an opportunity to generate new revenue.”

Read more here…

The Asian Development Bank (ADB) is providing $2.25 billion in financing to the Asia Solar Energy Initiative, in the hopes of attracting significant additional investment – on the scale of $6.75 billion over  the next three years.  The Asia Solar Energy Initiative (ASEI) will develop large-scale solar power projects in the Asia and Pacific region, aiming for 3,000MW in installed generating capacity by 2012.

“With energy demand projected to almost double in the Asia and Pacific region by 2030, there is an urgent need for innovative ways to generate power whole at the same time reducing greenhouse gas emissions,” said Rajat Nag, managing director at ADB.  Central Asia is a region of particular interest, thanks in part to the vast amounts of desert land available for massive solar construction.

In 2009, ADB supplied nearly $1.3 billion in funding for clean energy projects, exceeding its $1 billion target.  Beginning in 2013, the Bank is aiming to increase its investment to $2 billion/year.

Read more here…

Global demand for oil is climbing as the economy gets back on track, however, upstream project cancellations and delays as a result of the recession last year may lead to a supply crunch in the near future.  Many believe it is only a matter of time before the next oil price spike, and believe a future barrel price of $150 is not out of the question.  If prices skyrocket once more, what industries will be affected most?

The following chart displays credit ratings agency Fitch’s picks for top winners and losers in a future era of expensive oil as seen in the FT blog “Energy Source”

By SETH SUTEL (AP) – 2 hours ago

NEW YORK — Commodities prices fell sharply Tuesday as new doubts about Europe’s ability to resolve the Greek debt crisis sparked a global flight from risky investments.
Crude oil and other energy contracts tumbled, a day after oil hit an 18-month high. Prices for copper and other industrial metals also fell sharply.
The declines in commodities were made worse by a spike in the dollar as investors sought safe places for their money. The rising dollar tends to sap demand from foreign investors for commodities, which are priced in dollars.
Oil fell 4 percent, as did heating oil.
Copper fell more than 3 percent, and silver prices were off nearly 5 percent.
The dollar rose sharply against other currencies, especially the euro, which has been battered by the Greek debt crisis.

The ICE Futures US dollar index, which measures the dollar against six other currencies, jumped 1.2 percent to 83.26.
The seemingly endless saga of finding a solution for Greece’s debt crunch has unnerved investors, sending stock prices down around the globe Tuesday. The Dow Jones industrial average was down as much as 283 points, its biggest drop since Feb. 4, before it closed down 225.

“There seems to be a wholesale run for the exit for risky assets,” said Evan Smith, co-manager of U.S. Global Investors’ $800 million Global Resources Fund. “It appears to be concerns about Greece and the impact on the euro zone. We thought that fire had been put out, but it keeps reigniting, it seems.”

European nations agreed to a bailout package for Greece over the weekend, but street protests broke out in Athens Tuesday as unionists opposed the sweeping budget cuts the country agreed to in order to qualify for the aid. Standard & Poor’s downgraded Greece’s debt to junk last week and also lowered its ratings on debt issued by Spain and Portugal, confirming fears that Europe’s sovereign debt woes were spreading.

Copper’s decline was made worse by another factor: China. Beijing imposed more restrictions on its banks, leading investors to worry that its hunger for copper, oil and other industrial commodities might wane as its economic growth moderates. July copper dropped 11.5 cents to $3.1785 a pound.

Other metals also tumbled.
Platinum fell $43.10 to settle at $1,685.80 an ounce, while palladium for June delivery fell $33 to $515.25 an ounce. Both are used in making catalytic converters for cars and therefore respond to shifts in sentiment about economic growth.
July silver fell 99.8 cents to $17.842 an ounce. Gold was the least hurt among metals in the selloff, falling $14.10 to settle at $1,169.20 an ounce.
In energy trading, crude oil prices dropped $3.45, or 4 percent, to settle at $82.74 on the New York Mercantile Exchange.
Crude had traded at its highest level in a year and a half on Monday. Oil prices are also taking a hit from growing crude inventories, which may have gained an additional 1.5 million barrels last week, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

In other Nymex trading in June contracts, heating oil fell 8.56 cents to settle at $2.2595 a gallon, and gasoline lost 11.29 cents to settle at $2.3222 a gallon. Natural gas added 1.3 cents at $4.013 per 1,000 cubic feet.
Agricultural commodities were mixed. Wheat for July delivery rose 9 cents to settle at $5.1075 a bushel. June soybeans rose half a cent to $9.87 a bushel, while corn fell 2.5 cents to $3.69 a bushel.

Copyright © 2010 The Associated Press. All rights reserved.

As the United States Senate prepares to re-visit climate change legislation, the special envoy to the Chinese president voiced grave concern over the effects un-mitigated climate change could have on China’s economy.

“The scale of economic destruction would be equivalent to that of the two world wars and the Great Depression combined” if global temperatures rise by 3°C to 4°C, Xie Zhenhua wrote recently in the China Economic Herald.  ”Human beings cannot afford such disasters.”

In now appears that the group of BASIC countries (Brazil, South Africa, India and China) are becoming more amenable to the terms of the Kyoto Protocol, which they had previously resisted heartedly.  This resistance was a major reason why the United States never ratified the treaty, which is set to expire in 2012.  BASIC environment ministers will meet in South Africa later this month to incorporate elements of the Copenhagen Accord, the non-binding agreement formulated at the Copenhagen climate talks last December, can be worked into a broader global pact to succeed the Kyoto Protocol.

Read more here and here…

What is the fastest and most immediate way to reduce the globe’s rapidly rising demand for energy?  According to a publication from leaders at the World Economic Forum, entitled Energy Vision Update 2010; Towards a More Energy Efficient World, energy efficiency is the answer.

By closing the “efficiency gap” between today’s wasteful production methods and other more streamlined options, we can reduce global resource strain, and potentially save billions of dollars.   For every dollar spent on efficiency methods, the report estimates savings of $2-$4 in what would have been wasted energy.

Important developments in this sector are occurring around the world, including massive smart grid investment in South Korea, construction of new high voltage transmission lines in China and development of smart grid software in high-tech hubs in the United States and India.

The following chart shows where we are now… and how far we still need to go.

Anticipating a growth in global oil demand, OPEC leaders agreed to keep production levels stable at 24.84 million barrels per day (bpd), even though many member nations such as Saudi Arabia have been consistently overreaching those targets.

“Good demand, reliable supply, beautiful prices – we are very happy,” remarked Saudi Arabian Oil Minister Ali al-Naimi, who expects global demand to pick up by “about a million barrels” per day in the latter half of the year, largely due to rapid growth from Asia.

Even though the International Monetary Fund (IMF) predicts China’s economy will expand by 10% this year, the nation’s rising inflation may prompt new actions to limit credit that may also negatively impact the oil market.  OPEC President Germanico Pinto addressed this point in a speech delivered before the meeting, admitting “there is still a long way to go before we can feel at ease with the situation.”

Read the full article…

Sustainable investments in Switzerland rebound strongly to hit new peak

Sustainable investments run by Swiss fund managers rebounded after the financial crisis to reach a new high of CHF34.1bn (€23bn) during 2009 – with investment inflows outstripping the market average – according to a report from Zurich-based consulting firm onValues. The rise in sustainable assets managed by fund managers at the end of last year represented a 63% increase over the figure at the end of December 2008. The figures comprise assets in investment funds, segregated mandates and structured products.

In a 12-page report surveying 19 asset managers, onValues said the net asset flow into sustainable funds was approximately 22.9%, during 2009 compared to 4.5% seen by the average Swiss fund provider over the same period. The report said the sustainability asset inflows were “particularly marked” for thematic equity funds and new funds in the real estate and emerging market equities.

In a breakdown of Swiss sustainable assets, onValues said funds accounted for approximately 55% of the total, segregated mandates for 40% and structured products 5%. Institutions account for 45% of the sustainable assets market, with the balance invested by retail/private banking investors. However, the report said fund manager respondents believe institutional investors will drive the main growth in the sector in the next three years. OnValues said it set out to assess the market for specialist sustainable investment products and not the degree to which ESG factors are being used in mainstream investment portfolios. It said this means there are probably more total assets in Switzerland run via broader sustainability criteria.

The survey was backed by Bank Sarasin, Bank Vontobel, Ethos, Forum Nachhaltige Geldanlagen, INrate, Kaiser Ritter Partner, SAM, Swisscanto, UBS and Zürcher Kantonalbank.

Climate change investments hold both immediate and long-term potential for growth, says Deutsche Bank Climate Change Advisors in a new report.

Kevin Parker, DB’s Global Head of Asset Management, had this to say about this growing investment space:

“The shift to a low-carbon economy to mitigate global warming will require the creation of new technologies, industries and jobs on a massive scale.  The absolute imperative to prevent climate change is therefore also, I believe, the economic and investment opportunity of a lifetime.”

“…  In other words, climate change is not merely an investment sector that may hold future promise; it is a sector that has already delivered and is continuing to deliver.  That is is why we believe institutional investors should be shifting their asset allocation towards climate change.  For fidiuciary reason, if for no other, they should be seeking out this attractive source of alpha.”

Click here to download the full report

A dramatic increase in investor resolutions dealing with climate change shows that awareness of these risks and how they tie into the business bottom line.  This year, 95 such resolutions have been filed, representing a 40% increase over last year’s figures, says a recent study by Ceres, a coalition of investors, environmental groups and public interest groups working to promote sustainability issues.  These resolutions have been filed with some of the largest coal, electric power and oil companies in the United States and Canada, including ExxonMobil, ConocoPhillips and Southern Company.

Jack Ehnes, CEO of the California State Teachers’ Retirement System with $131 billion in assets had this to say:

“We want our companies to closely look at the impact climate change legislation and regulation have on them, to realistically assess those risks, and to consider the indirect consequences of climate change-drive regulation and the business trend on their activities.  The SEC’s interpretive guidance outlines exactly the kind of action we have been asking our portfolio companies to take with regards to the issues raised by climate change.  It fits with our role as a long-term investor focused on providing lasting value for the educators of California and their families.”

In January, the Securities and Exchange Commission (S.E.C.) mandated that companies must disclose climate change-related risks to investors, a move that was welcomed by a wide-ranging group of investors, such as the one above, who had been pressing for disclosure of this type.

Read more…

In a landmark ruling, the United States Securities and Exchange Commission (S.E.C.) for the first time will hold companies accountable for disclosing any risk that climate change might represent to their business bottom line.

Although the S.E.C. has previously required disclosure of a wide variety of other environmental risks, it has never made specific mention of climate change. The S.E.C. does not support any singular scientific or political viewpoint on climate change, but says it was a “logical step” to include climate change among the other disclosures it requires.

The S.E.C.’s decision was met with praise from a number of prominent investors and environmental groups who have strongly advocated for climate risk disclosure, saying it is a business issue of primary importance.  “We’re glad the S.E.C. is stepping up to the plate to protect investors,” remarked Anne Stausboll, CEO of the California Public Employees Retirement System (CALPERS), the influential pension fund that is the largest in the United States.

“Ensuring that investors are getting timely, material information on climate-related impacts… is essential.  Investors have a fundamental right to know which companies are well positioned for the future and which are not.”  The S.E.C. has released “interpretive guidance” in order to help companies decide what risks are worth disclosing and how to best communicate them to investors.

Read more…

In his first State of the Union address, President Obama spoke in no uncertain terms of the important role clean energy and energy efficiency must play in the United States economy now, and in the years to come.

The President emphasized the connection between investing in clean energy and job creation in the United States, which has been struggling with high unemployment.  Upgrading aging and inefficient infrastructure and expanding the reach of renewable energy and smart grid systems will be crucial to reviving the U.S. economy.  “We should put more Americans to work building clean energy facilities and give rebates to Americans who make their homes more energy-efficient,” he said.

Obama spoke favorably of the impact the Recovery Act has had on new energy technologies.  Under the sweeping legislation, the Department of Energy (DOE) has invested hundreds of millions of dollars into research and development initiatives for advanced biofuels, wind, solar, geothermal, advanced batteries, and smart grid systems.  These investments are paying off, Obama said, as new factories, manufacturing plants and power installations enter project pipelines all around the country, putting more Americans to work.  Obama also expressed support for construction of new, safe nuclear energy plants and for exploration of sites for offshore oil and natural gas drilling.

President Obama offered praise to the House of Representatives for passing the Waxman-Markey climate bill, and urged the Senate to break its inertia and move quickly on the legislation in its chambers.  “Washington has been telling us to wait for decades, even as the problem has grown worse,” he warned.  We need to pass a “comprehensive energy and climate with incentives that will finally make clean energy the profitable kind of energy in America.”   Acknowledging critics who say the timing is not right for such complex energy and climate legislation, Obama reiterated the urgency of the issue, forcefully saying “the nation which leads the clean energy economy will be the nation that leads the global economy.  And America must be that nation.”

The S&P 500 rose for a fifth consecutive session on Friday, up 0.3% on the day and 2.7% in the first week of 2010; industrial shares rose 1.4% to lead Friday’s gain, supported by optimism about Q4 corporate results; consumer shares ended lower reflecting the disappointment in the headline nonfarm payrolls figure

$ The UST 2/10 yield spread widened 7bps to 287bps on Friday as the payroll result put downward pressure on short-end yields; the 2yr yield dropped 6bps to 0.968% while the 10yr gained 1bps to 3.834%

FX The US dollar index dropped 0.7% on the day to 77.50; Cable strengthened early on the above-consensus PPI figures and ended the US session 0.6% higher at 1.602

$ Fed’s Rosengren (voter): slack labor markets and little business pricing power “should allow for accommodative monetary policy to continue to support the economy until the underlying demand of consumers and businesses becomes self sustaining”

$ Fed’s Lacker (non-voter): the risk of inflation could increase during the recovery; on withdrawing stimulus, “I thought asset sales made sense to look at first”

$ Fed’s Bullard (voter in 2010) would like to see jobs growth in the US before economic stimulus is withdrawn; liquidity programs designed to address the financial crisis can be eased

$ US nonfarm payrolls fell 85k in December, disappointing against expectations of a positive print; however, the improving trends within services and manufacturing continued and the November NFP reading was revised up to +4k from -11k before to show the first positive monthly result since the start of the recession in Dec’07 (+120k)

$ US unemployment rate held steady at 10.0% in December as expected; the number of unemployed people declined in December but the labor force continued to shrink which kept upward pressure on the unemployment rate; discouraged workers rose further to a new record high of 929k (since Jan’94)

$ US average weekly hours worked held steady at 33.2 in December; average hourly earnings rose 0.2%MoM in December and November’s gain was revised up to 0.2% (initially +0.1%); compared to one year ago earnings were up just 2.2%, the smallest gain since Aug’04, versus +2.6% at the end of Q3

$ US consumer credit plunged $17.5bn in November, a record drop in the series’ history since 1943, versus a revised -$4.2bn in October (initially -$3.5bn); revolving credit continued to lead the declines, down $13.7bn in November

$ US wholesale inventories jumped 1.5%MoM in November and October’s gain was revised up to 0.6% (initially +0.3%); the inventory/sales ratio fell to 1.14 in December and was the lowest since Jul’08; the inventory gain was led by an increase in nondurable goods (+4.2%) even excluding petroleum (+1.2%); durable goods inventories fell 0.3% versus -0.1% previously

€ German industrial production rose 0.7%MoM in November following a decline of 1.7% in October (initially -1.8%), disappointing slightly versus the consensus estimate of +1.0% but gains were broad across ex-energy sectors; the Economy Ministry said the improving trend in industrial production continues but the “upward dynamic should weaken in light of the moderate development in industrial orders”

€ Italian unemployment rate rose to 8.3% in November from 8.2% in October and was the highest since Mar’04

€ Eurozone final Q3 GDP estimate was unrevised at +0.4%; the annual decline was revised up to -4.0% from -4.1% on upward revisions to household spending and net trade

€ Eurozone unemployment rate rose the highest since 1998 at 10.0% in November, above the consensus estimate of 9.9%; the October figure was revised up to 9.9% from 9.8% initially

£ UK producer output prices rose 0.5%MoM in December and core prices excluding energy, food, alcohol & tobacco jumped 0.7% on the month, coming in well above the median market forecasts of 0.2% and 0.1% respectively; input prices rose for a third month, up at a steady pace of 0.1% (consensus: -0.2%)

News courtesy of Tullet Prebon