Wall Street Wants to Make a Profit on Climate Change
Having concluded that global warming is here to stay, Wall Street has decided not to do the right thing. Since efforts to slow down greenhouse gas emissions haven’t yet been successful, investors are taking their money elsewhere, to businesses deemed likely to profit as temperatures rise.
As Bloomberg reports, venture capital and private-equity investments in sustainable energy — wind farms, tidal energy project, solar power — fell 34 percent last year, to $5.8 billion. Instead, Wall Street is investing in companies like Oxitec Ltd., an Abingdon, U.K.-based startup that is developing a mosquito whose offspring are sterile. These genetically engineered mosquitos are already being released into a number of countries, in an effort (good) to combat dengue fever, which has spread due to rising temperatures and humidity, but with (bad) a yet unclear-sense of the impact these “doctored” mosquitos could cause.
Arcadis NV, a Dutch engineering firm specializing in flood protection, has also been doing quite well, courtesy of climate change. The company’s revenues are up 26 percent thanks to Hurricane Sandy; New York City and New York’s Nassau County have both hired Arcadis to assist with damaged water treatment plants.
One New York hedge fund, Water Asset Management LLC, is even buying up water rights and investing in water-treatment companies with its $400 million in funds.
Companies seeking to deal with the effects of climate change are not only having their moment. Greenland mining startup NunaMinerals A/S is “counting” on the 1,500-mile long ice sheet covering Danish territory melting, the better to mine the area which contains a “bonanza of gold, rare earths, and base metal deposits that will attract deals and capital to one of the most remote corners of the world.”
That is, “less ice means more money.”
But “flammable ice” that could provide a new source of fuel could become a much-desired commodity. Japan just announced that it has†tapped such ice for methane hydrate far beneath the deep sea floor. The†“world’s richest source of untapped fossil fuels” is now on its way to being, potentially, extracted and burned for fuel (Japan currently imports most of these and, after the Fukushima disaster, closed most of its nuclear plants) and one that is only “cleaner” in comparison to coal and oil, the “dirtiest options.” But flammable ice is really “just another climate-changing fossil fuel,” says†Grist — not that the companies hoping to tap into this new energy source will tell you that.
Bloomberg (it is a business publication) defends such investments as, well, good business. “Betting on the failure of global efforts to contain warming may seem cynical, but itís increasingly logical,” it’s noted, citing the so-far failure of the 1997 Kyoto Protocol to stem greenhouse gas emissions.
Perhaps it is logical, but it is cynical. As scientists have shown, the earth’s temperatures have been rising at a far faster rate than ever before, so the planet is on track to be the hottest since the last ice age. Investors are simply jumping the gun and not giving efforts to develop green energy a chance. By not trying to fight it, and in effect encouraging companies with interests in the world heating up in their pursuits, Wall Street is (pun very much intended) further fueling — and funding — climate change.
Related Care2 Coverage
Photo from Thinkstock