Companies poised to capitalize from Copenhagen Protocol and pending "Cap & Trade" Bill

Money to be Made from “Cap & Trade”


By Trent McCandless

We’ve heard your feedback and, not surprisingly, the overwhelming majority of our readers who responded to the June 22nd article “The Green Road to Copenhagen” were opposed to the Copenhagen Protocol and the pending “Cap & Trade” Bill. Many of you were opposed to increased regulations and tax liabilities during this fragile economic period. Many of you were also opposed to the idea that America would somehow allow for other countries to dictate our domestic policies. Sadly, if there’s anything we’ve learned from the passing of the “Spending Bill” it’s that the American Government cares little, if at all, about the interests and opinions of the masses of which it represents.

That being said, perhaps it’s time we take a long hard look at our portfolios and consider making strategic moves if this pending legislation, which President Obama is strongly advocating, should pass.

So, which companies are poised to capitalize from the Cap & Trade Bill and the Copenhagen Protocol? For starters, carbon-compliance and monitoring companies like the United Kingdoms’ Hedra PLC and EmissionsLogic.

Before being acquired by Mouchel in 2008, Hedra PLC was the UK’s leading independent consultancy specializing in Utilities and public sector markets. Should the “Cap & Trade” Bill pass companies like Hedra will work with businesses so they understand their obligations under this new set of laws.

More laws = more lawyers.

EmissionsLogic is the one-stop-shop for environmental compliance solutions. They provide everything from monitoring solutions, regulatory compliance oversight, evaluation of energy reduction and abatement projects to allowance and carbon-credit trading. They also assist companies with reporting and third-party auditing. Think of them as the Pricewaterhouse Coopers of energy compliance.

Energy compliance companies aren’t the only businesses poised to capitalize from this energy and policy revolution. Companies like Clipper Windpower, who manufacture and maintain the massive windmills seen in “eco-friendly” commercials, stand to make a pretty penny as our nation’s energy dependency is transferred to renewable resources like wind and solar.

According to a recent press release from Clipper the company is entering into a 50:50 joint-venture with BP Alternative Energy (yes, that BP) to develop the Titan Wind Project. The project proposes to be the largest wind-power initiative to date; producing enough energy to power 1.5 million homes from an estimated 2,000 windmills. Oh yeah, and Clipper has the Master Turbine Supply Agreement (MTSA) so they’ll be providing most, if not all, of the turbines for the project.

Last, but certainly not least, to capitalize on this new set of legislation is arguably the worst run company in the United States: the Federal Government.

Okay, so it’s not really a “company” per se, however there’s no question that the proposed legislation will create new taxes on businesses and consumers which the government will capitalize from.

Even if new taxes weren’t created, which is unlikely, these climate initiatives will increase the cost of energy which will directly increase the volume of taxes paid on energy, even if tax rates remain steady.

The formula here is: new taxes + increased tax volume = increased federal revenue; a small price to pay in order to add marginal stability to our economy.

Does that mean it’s safe to invest in government-backed bonds again? Well, we never said it wasn’t safe—but, then again, we’re not your financial advisor.

If the “Cap & Trade” Bill is passed by the Senate we’re likely going to see hundreds, possibly even thousands, of new companies looking to capitalize from it. The key is to do your homework and find out which ones are the sharks and which ones are the long term investments.

“When buying shares, ask yourself, would you buy the whole company?” – Rene Rivkin