Green Investing (or How to Buy a Future)

Renewable energy investments hit an all time high of over 30 billion dollars last year or 20% of the total investment capital in
the energy sector worldwide. Driving this growth seems to be the realisation that global warming, be it fact or fiction, is the hot
topic of the day. New exciting energy technologies are appearing almost daily as the world races to find a cure for what ails it: oil
dependence.

Global Warming or Global Warning?

At first glance it would seem that the spectre of global warming and the resulting potential of extreme
climate changes would be the obvious instigator driving investment into alternative energy. But a
closer examination reveals that is not the whole story. Human kind are certainly motivated by fear but
long term fear? Fear of events to come in our children's or grand children's lifetime? For some of us,
perhaps the nobler among us, this might be the case. But for the decision makers on high it is a
motivates.

I will give you two words, oil dependency. Bankers and Investors, corporations and governments alike
go all weak kneed upon hearing those two words. From the US dependence on Venezuela to European
dependence on the former Soviet Republic and the eternal conflict in the middle east; oil dependence
equals economic threat.

When President Bush signed the new laws encouraging investment in alternative energies it wasn't global warming he cited as the
reason, it was breaking the US dependence on foreign oil. The same can be said the world round. Global Warming and Climate
Change make for nice political sound bytes but oil dependence is the real monster under the bed.

It Does Just What The Label Says

Alternative Energy, in the end, is just what the label says it is: alternative. Alternatives to fossil fuel. Alternatives to foreign
supplied energy. The worlds economy is often said to be oil based, but that is a misnomer. It is energy based. The world is in
a headlong rush, a race to discover new means of producing energy that will eliminate dependence on a rapidly diminishing
supply of non renewable, foreign controlled energy.

So why do most people invest in green investments? Certainly for the average person it is about global
warming, about doing the right thing. But for the big institutional investors like hedge and mutual funds
its about the bottom line: profitability. And green investments will ultimately deliver that profitability.

Sure, at present, alternative energy is hard pressed to be as cost effective as fossil fuels, but with the
strong government incentives and strong financial backing alternative energy enjoys its just a matter
of time until it can deliver energy at the same cost or less than fossil fuels. That's the day we all look
for, the day we all win.