Tuesday, June 26, 2007

Personal Carbon Credits

Many investors reading at my June 19th post, “My Carbon Footprint,” might take pause before acting on it. In the post I describe how individuals can “buy” carbon credits to off-set personal carbon emissions by sending money to non-profits organizations. The idea makes me hesitate, since these groups may or may not be accountable for the way the money is spent.

In my view, a better way for the individual to make a real impact on carbon emissions is to invest in public companies that are actively cleaning up pollution or creating renewable energy sources. However, you will have access to financial records filed with the SEC that makes it possible to monitor what they are doing. Accredited investors can take the ultimate step of investing in private companies doing the same thing.

You will not get a cool bumper sticker or luggage tag that shows the world what a responsible world citizen you are. However, investing in the “green” sector puts real capital into real businesses that are effecting real change and not just talking about it.

In the Crystal Equity Research universe,
Fuel Tech, Inc. (FTEK: Nasdaq) has been a prime candidate for this “carbon offset” concept. Fuel Tech provides air pollution abatement solutions for utilities with coal-fired boilers. Unfortunately, FTEK is fully valued and we are currently suggesting investors take profits.

There are several stocks that have been profiled in the Small Cap SEARCH newsletter.
Altair Nanotechnologies, Inc. (ALTI: Nasdaq) is perfecting advanced battery technologies for powering all-electric cars and trucks. UQM Technologies, Inc. (UQM: AMEX) provides propulsion systems for vehicles, including one fleet truck that is being outfitted with Altair batteries. UQM recently raise $5.0 million through a private placement. Environmental Power Corp. (EPG: AMEX) is a biofuel producer. ADA-ES, Inc. (ADES: Nasdaq) is positioning itself to tap into the utility industry with nitrogen oxide and mercury emission solutions. ADA-ES is also expected to come to the capital markets with a secondary offering, following the filing of a shelf-registration statement.

Neither the author of the Small Cap Copy web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Crystal Equity Research has a sell rating on FTEK shares. ALTI, UQM, EPG and ADES were profiled with generally favorable commentary in the Small Cap SEARCH

1 comment:

Kiki Blitz said...

Personal Carbon Credits already exist on the UK site GoCarbonFree.com. It will be interesting to see how the public reacts to a voluntary carbon rationing program. I signed up and it seems to relatively straight forward, and free to use.

The way I see it is Personal carbon credits combine the act of consuming with a reminder that every action has an environmental impact. Big businesses are striving for greener images, so let them use their economical power to find greener solutions. Directing money towards CDM projects creates an economy for Co2 reduction, and much needed 'green' industry to places like India, Africa, and China.

Sir John Houghton, the former co-chairman of the IPCC talks about the green wave in consumerism in an interview with GoCarbonFree.com, and says "I have often thought the taxation route is the simplest method to reach emissions targets. However, perhaps we need more than one route forward and a combination of a cap and trade and taxation would be best "

Personal Carbon Credits use a cap and trade system, but act as a tax to businesses. Consumers can demand that there purchases be offset by the retailers and use their purchasing power to reduce Co2. On a large scale the reduction of Co2 could be enormous.

The site uses 50% earnings towards buying Gold Standard Eligible carbon credits, and the shareholders do not take any dividends.