Global Warming - Green Chip Review

Debating Climate Change

It's always shark-infested waters when I report on climate change news.

On one side, there are those who think climate change is some kind of liberal conspiracy designed to crush the U.S. economy. On the other, there are those who believe it's the most pressing environmental issue facing the world today; believing we can just flip a switch and end our reliance on fossil fuels overnight... if we only had the will to do so.

Now I'm not so naïve to believe that we'll ever come to any kind of meaningful and honest agreement on climate change. At least not with the debate being fueled by so many ill-informed and overzealous environmentalists and all that oil and coal money that continues to line the pockets of our elected officials and fill the coffers of television advertisers and big PR firms.

But one thing is certain: The effects of a changing climate are not being overlooked by the military.

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A Military Position on Climate Change

Last week, Jordan announced its plans to help fight climate change by having its military upgrade engines and old vehicles and by using new energy-saving technologies.

This announcement picked up a decent amount of coverage, and I noticed that there was quite a bit of ranting and raving in online comments sections about how the U.S. military needs to do the same.

But the truth is, the U.S. military isn't a laggard at all in this area. In fact, we even dedicated a section to this issue in our book, Investing in Renewable Energy.

Here's an excerpt written by my colleague, Chris Nelder:

In 2004, a leaked report from the Pentagon predicted that rapid climate change may well set off global competition for food and water supplies and, in the worst scenarios, spark nuclear war. "Because of the potentially dire consequences, the risk of abrupt climate change... should be elevated beyond a scientific debate to a US national security concern," it said.

In April 2007, a top panel of 11 retired military brass from all branches of the military, including five admirals and four generals, released a report that came to similar conclusions. Entitled "National Security and the Threat of Climate Change," it was commissioned by the Center for Naval Analyses, a nonprofit government-funded think tank. Though initially several of the authors were skeptical of the topic, they spent months meeting with climate scientists, business leaders, and other experts, and found the experience "very sobering." Their conclusion was,"Climate change is a national security issue."

They said that the security consequences of climate change should be fully integrated into national defense strategies, and "the intelligence community should incorporate climate consequences into its National Intelligence Estimate." In other words, they insist that we stop pretending that climate change and defense are separate issues, and start working on them together.

In March 2007, the US Army War College sponsored a two-day conference on the subject, entitled "The National Security Implications of Global Climate Change." This marked the first time that we have ever heard a military expert connect global warming with the global war on terror: "Climate change can provide the conditions that will extend the war on terror," said retired Admiral T. Joseph Lopez, former commander-in-chief of US Naval Forces Europe and of Allied Forces, Southern Europe.

Why is this so? Because it's a "threat multiplier," exacerbating the conditions that tend to breed terrorist groups in volatile parts of the world, such as water and food shortages. For example, the report notes, nearly half the world gets about half of its drinking water from melting snow and glaciers that are quickly disappearing. The authors note that migrations of environmental refugees, strained border relations, and resource conflicts will make it hard for states to meet the basic needs of their residents, which will lead in turn to security problems.

But the climate change threat affects us all, as report author Vice Admiral Richard Truly admits: "It's going to happen to every country and every person in the whole world at the same time."

The report also showed that the commanders were wisely taking a long-term view of the problem. Said retired Marine Corps General Anthony C. Zinni, former commander of US forces in the Middle East: "We will pay for this one way or another. We will pay to reduce greenhouse gas emissions today, and we'll have to take an economic hit of some kind. Or, we will pay the price later in military terms. And that will involve human lives. There will be a human toll."

So, clearly a changing climate is not being overlooked by the military. Nor is it being overlooked by those companies working with the military to reduce energy consumption. After all, if you want to reduce greenhouse gas emissions, you have to reduce fossil-fuel based energy consumption.

Whether its Lockheed Martin (NYSE: LMT) advancing efficiency technologies; Honeywell (NYSE: HON) providing foam insulation on tents (which in Iraq can cut the need for air conditioning by 45 percent); or Energy Focus (NASDAQ: EFOI), working with the United States Navy to implement ultra efficient LED lighting for Navy ships... there's definitely a market here, with a number of opportunities for Green Chip investors.

So feel free to continue the climate change debate all you want. But don't sleep on the opportunities that will continue to provide us with profits.

To a new way of life, and a new generation of wealth...

Jeff

Copenhagen Conference News

This weekend in Copenhagen, they're thinking about what really matters...

Monday will mark the beginning of the pivotal second week of the United Nations Climate Conference (COP-15), making this prime time for conjecture. What will national leaders promise in the way of greenhouse gas emission reduction, and will they agree on a global carbon pricing system in a final Copenhagen consensus?

Well, as I've weighed the reports from my contacts there at the conference against market observations and other global energy news, I'm happy to say I don't think next week will make or break us as clean energy investors.

Action Outside Copenhagen

The United States doesn't have a price on carbon emissions — pending legislation is angling in that direction — yet this week GE (NYSE:GE) completed a deal to produce turbines for the world's largest wind farm in Oregon. At $1.4 billion, the 845 megawatt GE blockbuster is a shining example of large-scale renewable energy momentum already in full swing. Due north from Oregon in British Columbia, GE is pursuing a smaller, 300 MW project.

Yet on the second day of COP-15, UN Executive Secretary and climate change chief Yvo de Boer pushed for such deals to get done in Copenhagen. "Please please, please, if you are a businessman, do a deal in Copenhagen and please, please, please make it market-based. Because if we fail to get a market-based agreement, we will be forced to turn to tax and regulation," de Boer pleaded.

He might not have known about GE's newest North American projects, but de Boer should be aware that renewable energy has its own momentum that is separate from the climate change issue... That's been our observation at Green Chip Stocks all along.

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Oil price increases alone bring new clean energy technology into the realm of reality with every dollar tick upward. The International Energy Agency just revised its 2010 demand scenario upward, and that's driving oil higher. The main reason is China's economic resilience, which we'll discuss more in a bit...

Oil is certainly a major factor in business success for any company that owns a vehicle, and efficiency rules in today's marketplace.

Getting Down to Green Business

Last Sunday in the New York Times, Guns, Germs and Steel author Jared Diamond asked, "Will Big Business Save the Earth?"

As he illustrated with examples from Coca-Cola, Chevron, and even the bogeyman of many left-leaning causes, Wal-Mart, the business world has its own reasons for going green. In Wal-Mart's case, the decision to reform its logistics chain to save fuel is saving the company and its shareholders $26 million a year. Coca-Cola realized people couldn't have a Coke and a smile if water supplies are too strained and too expensive to get good H2O first.

Diamond pointed out that oil giant Chevron is going super-sustainable with its operations in Papua New Guinea to save itself the pain of local unrest, regulatory wrangling, and simply to provide value to investors who now demand sustainable operations even in the fossil fuel industry.

Renewable energy is a matter of consumer choice, risk mitigation, and plain-ol' competitive advantage in a business world that values "green."

Of course, that doesn't mean that all shades of green look the same. At GCS we bring you info on industrial stalwarts like GE that are becoming titans of new energy, as well as newer companies like Trina Solar (NYSE:TSL), which has gained 416% since the beginning of 2009!

Trina's success as an international solar power player born in China would have been unthinkable a decade ago. China was for low-cost toys and clothing, not industry leading clean energy technology... Can you imagine what publicly-traded green companies could come out of Africa in the next several years?

Billionaire financier George Soros is thinking that way. This week in Copenhagen, Soros proposed using the International Monetary Fund's special drawing rights (SDRs) to set up a "green fund" that would subsidize cleantech in poorer countries. SDRs are a financial instrument (sometimes called a "virtual currency"), that you never really have in your wallet. But SDRs can be turned into real lucre and put into action just like pounds, euros, and dollars.

There in Copenhagen but outside the policy fray, Soros showed the power of new thinking by people who know quite a bit about real-world business. Climate change mitigation and moneymaking are not at odds, and indeed the quest for a cleaner global energy mix has already made many entrepreneurs and investors into millionaires.

So when Yvo de Boer threatens taxes and regulation if deals don't get done in Copenhagen, he is voicing his clear preference for private sector leaders like Soros to take the reins from the very treaty negotiators now convened at COP-15.

Not Waiting for 2020

In Germany — where policy and industry have worked in tandem to create a green jobs market several times larger than what we have in America — we're now seeing the second and third phases of a new energy economy's development. In Berlin, Environment Minister Norbert Roettgen is now calling for a dynamic feed-in-tariff (FIT), weaning clean energy companies off a system where the government pays a fixed price for their generation to make solar, wind, etc. competitive with thermal (coal) capacity.

Where would the United States be now if Washington had adopted such a system years ago? As I told you in my reporting from the American Council on Renewable Energy Policy Forum on Capitol Hill, U.S. legislators are moving closer and closer to taking proven policy approaches from Europe; business leaders are thrilled.

This coming week in Copenhagen, expect to hear what the Economist has called "oceans of planet-saving rhetoric." Plenty of it will be static. By listening to more of what's going on and tuning in to what's happening now instead of what presidents promise for 2020 or beyond, we hope to make a profitable clean energy economy real for you in the very near future.

In fact, Green Chip International premium subscribers have been busy taking advantage of global clean energy profits in 2009. To find out more about GCI's direction in 2010 and see why our average closed position gained over 58%, click here:

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Regards,

Sam Hopkins

EPA to Regulate Greenhouses Gases

I love it when we get it right.

Yesterday, the Environmental Protection Agency officially declared that greenhouses gases pose a danger to human health and the environment.

Sounds obvious, I know.

But this was a huge announcement. One that will change the game for cleantech policy and investing.

And one we've been telling you would happen.

The Carbon Backdrop

In case you're not up to speed, here's the carbon policy prologue.

Late last century, the world ratified the Kyoto Protocol — an international accord calling for the 5.2% reduction of greenhouses gases from 1990 levels in industrialized countries.

Under Clinton, the U.S. signed the protocol but never sent it to Congress for ratification.

And George W Bush, citing exemption for developing nations like India and China, didn't submit the treaty for Senate ratification either.

Since then, Congress, the EPA, several states, and hordes of industry lobbyists have a played a carbon-induced chess match.

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In 1999, the EPA told California it was not allowed to regulate emissions under the Clean Air Act. California and a dozen other states sued.

And for some time, it looked as though the match would end in a stalemate.

But then a Supreme Court ruling declared that, in fact, the EPA could regulate greenhouse gas emissions. And if they didn't, they had to explain their reasoning scientifically. That just about brings us to yesterday's announcement.

The Irrelevance of Congress

If the picture is still a bit muddy, here's the nutshell version: Before yesterday, it literally took an act of Congress to regulate emissions. Today, all it takes in the signature of an EPA official.

This could be the game-changer we've been waiting for.

For starters, it means the EPA can now bypass Congress en route to regulating greenhouse gases. This could be the policy trigger that many companies have been waiting for.

Large emitters that have been loath to curb emissions should instantly feel the pressure this decision.

Secondly, it will signal to investors that carbon now has a price. That means carbon-intensive businesses, like coal and manufacturing, will have to incorporate this new risk into their models.

And major institutional investors will be looking for plays with minimal carbon risk. The entire cleantech community falls in that realm.

A Deeper Look

Think of it like this...

Until yesterday, carbon was an externality.

So when a utility applied for a bank loan to build a new coal plant, that bank didn't count carbon as a risk.

Now it will.

And provided the other economics hold up, a bank will now be more willing to finance a new wind farm than a new coal plant because the coal plant now carries extra risk.

This is why major banks — BoA, Citi, JPMorgan, Credit Suisse — have established the Carbon Principles, which "provide a consistent approach for banks and their U.S. power clients to evaluate and address carbon risks in the financing of electric power projects."

The city of Los Angeles has already banned new coal plants altogether.

Similarly, when major investors (mutual funds, pension funds, etc.) decide where to place their funds, they'll be less apt to choose a business with increasing carbon risk.

CalPERS — which runs of the largest pension funds in the country — has already requested that companies "intensify efforts to provide investors with comprehensive analysis and disclosure about the financial risks presented by climate change."

And that mentality will be pervasive.

To avoid regulation, big emitters will be forced to clean up their acts. And utilities will simply forgo building coal plants in lieu of cleaner assets.

And Green Chip investors will be cleaning up the entire time. Because we've known this day would come. And we've been preparing for it.

Call it like you see it,

Nick

P.S. As you read this, world leaders are in Copenhagen trying to figure out how to incorporate carbon reduction into the global economy. The meeting, known as COP-15, is an event we've been reporting on it for months. The talks are this week, so this could be your last chance to prepare your portfolio before global policy is forever changed.

Climate Change Opportunities

Last week, Ed Begley Jr. was invited to discuss global warming on Fox News with Stuart Varney.

Not surprisingly, the discussion became a bit heated when Varney brought up those recent e-mails that some folks are declaring are the smoking gun of the climate change debate.

You see, last week it was reported that hundreds of e-mails about climate change were hacked from the Climate Research Unit at East Anglia University. Apparently, those particular e-mails questioned or led to questions regarding global warming.

The jury's still out on whether or not those e-mails were taken out of context or possibly edited, as well. But either way, it has provided great fodder for those who believe global warming is not real.

Now my question is, if you're really interested in debating the climate change issue or you want to further investigate those e-mails, why not do it with a scientist instead of a Hollywood celebrity?

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Don't get me wrong. I applaud Begley for all his work on environmental causes and also shining that celebrity light on the benefits of solar, electric cars, and water conservation on his weekly television show Living with Ed. This guy definitely walks the walk! And his efforts should not go unnoticed.

But let's face it: if I want to research climate change, I'm going to the science community, not Hollywood.

Of course, just to clarify, Fox is not the only news organization to do this. From my local news here in Baltimore to CNN, celebrities put the asses in the seats. And there isn't a single news source that doesn't take advantage of that reality.

But I'm not writing this today to attack mainstream media. After all, I'm no Edward R. Murrow. But what I am is an investor who knows that the market is responding to climate change initiatives — regardless of what you, Ed Begley, or Stuart Varney think about it.

Is Global Warming Real?

About once every week or so, I get an e-mail from an investor who wants to know if I think global warming is real. And to be honest, I never really understood that.

My personal opinion on this topic is irrelevant for the purpose of making money. And if you're looking to investigate whether or not human-induced climate change is real, the last place you should look is the pages of an investment research letter.

However, if your concern is simply the opportunities stemming from climate change — well, these are the pages you can count on.

Because make no mistake about it...

Any kind of climate change legislation, from international treaties to state and local mandates, will only further the integration of renewable energy... and make us even more money going forward.

And don't think for a second that a handful of conveniently-timed e-mails is going to derail the massive flow of capital heading straight toward new renewable energy projects and smart grid development.

I see this stuff everyday, folks.

I look at all the new deals that are in the pipeline, all the new legislation being drafted, introduced, and debated — on a global scale. I've been traveling the globe, checking out new companies and sitting in on multimillion-dollar financing meetings.

The truth is, in all my years analyzing "green" markets, I can honestly say that I've never been more excited than I am going into 2010.

The amount of money up for grabs is mind-blowing. And I want to make sure you have every opportunity to get your share.

So in two weeks, I'll be sending you my 2010 Green Chip Stocks forecast.

From new wind and geothermal technologies to utility-scale developments, it's going to be a very profitable year for us. And I can't wait to help you take full advantage of every opportunity coming around the bend.

To a new way of life, and a new generation of wealth...

Jeff

Copenhagen Climate Conference

It's becoming more difficult by the day to ignore the multi-trillion-dollar market being created by the upcoming COP-15 summit.

Today, let's look at where companies, consumers, and investors stand.

The Corporate Leaders Group on Climate Change is an organization headed by Prince Charles. Comprised of no fewer than 500 top-tier international companies, the CLG is demanding "immediate and deep" emissions control commitments from December's UN Conference of Parties (COP-15) in Copenhagen.

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Publicly-traded corporate titans like Coca-Cola (NYSE:KO), Royal Dutch Shell (NYSE:RDS), BP (NYSE:BP), British Airways (OTC:BAIRY), and General Electric (NYSE:GE) have signed on to a memorandum called the Copenhagen Communiqué that squares action on emissions with the health of the global economy.

That's right: though naysayers would have you believe that preventive measures to cut greenhouse gas output will destroy the world's wealth, boards of directors disagree vociferously. In fact, they're clamoring to get their names on the Corporate Leaders Group list.

The Copenhagen Communiqué bears the signatures of execs at retailers such as Britain's Tesco (OTC:TSCDY), which can lead the charge to reduce packaging, encourage reuse of shopping bags, and make distribution networks more efficient.

With a U.S. market cap of over $56 billion, German insurance giant Allianz (NYSE:AZ) is concerned about the heightened underwriting risk posed by rising sea water and worsening weather events. Lower emissions could mean lower future payouts and higher margins for Allianz, so they're on board with Prince Charles and the CLG 500.

We also see unlikely champions of climate action like Shell and BP — oil and gas companies whose declining North Sea production base is forcing them to move into wind, solar, and other renewable energy sources. BP has nearly 100 wind energy projects in the U.S alone, adding up to 20 gigawatts of potential output.

Rather than viewing the political echelon as an enemy to profits, these petroleum powers want a guarantee that their clean energy efforts will be met with grid purchasing agreements and effective subsidies.

And let's be real — there's also a sizable public-relations element to the CLG effort. The drive to earn clean energy cred has turned from a few companies' push for good press into an agglomeration of multinational firms that now has its own gravitational pull. . .

Only 150 companies signed onto 2007's Bali Communiqué, named for that year's abortive UN climate conference in Indonesia.

This time around, the number of companies totals 500.

Nevertheless, the public may continue to be skeptical of corporate credibility on green matters. For example, survey data from Boston College and strategic marketing agency Cone, Inc. show that environmentally-friendly messaging is penetrating, but may not yet be clear enough to the U.S. consumer base.

Consumers and Corporations Get on the Same Page

The 2008 Boston College/Cone Green Gap Survey shows that less than half (47%) of Americans trust a company's own representation of its sustainability practices.

Of those polled for the survey, 39% prefer purchasing "environmentally-friendly" products, but only the same number of respondents said they really understand the terms industrialists use to establish their green reputations.

Those companies at the front lines of consumer awareness may have the easiest job. Just look at Chile's Viña Concha y Toro (NYSE:VCO), which is changing about 68.4 million bottles per year to a new, lighter Eco-Glass design. The company is also setting carbon neutrality targets and developing local geothermal resources to that end.

It's not perfection, but it's effort. . . and you can bet you'll see stickers on each bottle soon, alerting you to the changes Chile's biggest winery has made.

Being a listed company, Concha y Toro joins many of the Copenhagen Communiqué signatories in calculating that energy efficiency will pad profits and yield higher earnings per share.

In turn, investors in all sorts of industries will find themselves on the receiving end of "green dividends."

Again, the multi-trillion-dollar chorus is growing. . .

Investors Present $13 Trillion to Fund Action

On September 16, investors at the International Investor Forum on Climate Change in New York issued a joint statement calling for climate action.

Representing 180 of the largest investment firms and funds in the world, their word is worth $13 trillion in assets. Those dollars, euros, yen, and yuan can be diverted away from high-risk polluters and companies that don't get with the program.

All told, we're looking at an unprecedented tailwind for climate change progress. On Tuesday, Chinese President Hu Jintao promised to "cut CO2 emissions per unit of GDP by a notable margin by 2020 from the 2005 level." As he spoke, Hu removed one last arrow from the quiver of those who keep trying to pop what they see as a big green bubble.

The Corporate Leaders Group wants to help Hu and his peers in developing countries by safeguarding forests and transforming black-sky nightmares with carbon capture and other clean technology.

Hu wants to parlay the cleantech success China has already had with solar power companies like Trina Solar (NYSE:TSL) into end-to-end emission-lowering solutions that are marketable to other developing countries.

The gap is quickly closing between consumers and corporations, between countries and companies, and among the world's biggest polluters. Consensus is on the way, and you don't want to be behind the 8 ball when COP-15 kicks things into high gear in December.

As it turns out, the trillions I've talked about here are only the first waves of money moving into and around emissions reduction efforts.

You can read Green Chip International's complete report on the Copenhagen climate conference and gain instant access to our portfolio of advance plays on COP-15 by clicking here.

Regards,

Sam Hopkins

International Editor

Indian Energy IPO

India just announced its biggest oil find in two decades.

Yet that's not the biggest energy news in the capital. . .

Instead, number-crunchers are uncovering India's advantage in limiting industrial pollution, and the consequent leg up that new Indian clean energy companies will have.

"Implausible (emission) results have been cited to portray a steep rise in India's emissions," said Dr. Prodipto Ghosh, a fellow at the Energy Resources Institute (TERI), in an interview with the Calcutta Telegraph on September 2.

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He derided "guesstimates" by western researchers that aim to justify inaction on the part of developed countries.

You've heard it before from the do-nothing chorus: "If India and China don't clean up their consumption, then how can America or Britain?"

As we move toward the COP-15 summit on emissions reduction this December in Copenhagen, Indian researchers are calling B.S. on fuzzy math.

Just a week after Prime Minister Manmohan Singh opened the spigot at western India's Barmer field, where Scottish energy operator Cairn Energy (LSE:CNE) announced a 3.5 billion-barrel discovery in 2004, the government released a flurry of new figures that show India's emissions well below the 2005 global average — in 2030!

"The debate on emissions has until now been pushed by research from the developed countries that does not capture India-specific or developing-country realities," Dr. Ghosh griped. He can actually claim the most credit on this one, as TERI came out with a higher number than the four models the National Council for Applied Economic Research delivered to press.

TERI projects per capita emissions of 5 tonnes in 2030, which would be above the 2005 global average. The other university-based studies gave a range of between 2.77 and 3.9 tonnes, which comes in below the worldwide mean of 4.22 tonnes four years ago.

Dr. Ghosh formerly served as a secretary in the Environment Ministry, and he knows what gears are turning today. The base case in many non-Indian studies doesn't take into account moves that the Indian government is making to boost efficiency and stimulate clean energy production.

And alongside scientists, economists are stepping up to bat — cricket, of course — for India. Jadavpur University Professor Joyashree Roy helped develop one of the academic models released this week. She says it "takes into account technology changes, energy efficiency and the behavioral response of producers and consumers."

If outsiders claim to predict India's climate impact in two decades without acknowledging its transition to cleantech, they're guilty of academic dishonesty.

And I'll tell you right now that as an investor, if you ignore India's clean energy push. . . you're guilty of leaving a pile of money on the table.

Indian Energy IPO

Indian Energy Ltd. debuted on London's Alternative Investment Market (AIM) on Wednesday, bringing in $15.75 million in its IPO.

With offices in London and Mumbai (Bombay), this wind turbine operator is shooting for 300 MW of operating capacity in four years. That will mean a major, nationwide push from its current capacity of around 25 MW, along with more equity financing and help from State Bank of India, the country's biggest bank.

SBOI has already ponied up over $18 million for Indian Energy Ltd., which shows the local financial community's commitment to developing green alternatives that can supplant coal and oil. As it stands, those two resources generate over 80% of India's power production.

Electricity access falls short of what is needed for India to continue growing at a 7%-9% clip per year, and Indian Energy is working on bigger listings on the LSE and Bombay Stock Exchange to tap what international investors recognize as a critical need with market opportunity built-in.

PM Singh wants Indian solar power output up to 20 GW by 2020, which will enable millions of Indians to wire their homes for the first time with the help of rooftop PV units.

Industrial-scale projects will also be added to the mix, but Indian Energy states it's sticking to wind. Not every Indian clean power producer has to be a Jack of all trades, and serious infrastructure challenges remain. Yet, as the prime minister said this August:

"In dealing with the challenge of climate change and environmental degradation we face the unfair burden of past mistakes not of our making. However, as we go forward in the march of development, we have the opportunity not to repeat those mistakes."

Green Chip International subscribers have already closed one AIM-listed Indian renewable energy player for gains of more than 40%. In fact, our average upside has been just below 40% over the life of the GCI portfolio.

As India's government and researchers continue to team up with international investors to make India's clean energy transition a reality, we'll keep you up to date.

Regards,

Sam Hopkins

P.S. On September 11, Managing Editor Jeff Siegel will be speaking at the Modern Energy Investor Forum in Denver. The conference managers have offered a special rate of $300 for any Green Chip members who want to attend. The regular price is $500. Click here for more information. Please note that in order to attend the conference, you must be a registered attendee. Also, in order to get the discount, make sure you reference "Green Chip Stocks" in the "interests" section on the form.

Renewable Energy in India

India's market for renewable energy and related technology is growing by 25% per year.

That's according to a U.S. Commerce Department statement encouraging American energy enterprises to get a chunk of the South Asian market.

But the flow of capital and ideas into India from Silicon Valley may be reversing, due to a controversial provision of the stimulus package.

A brand-new nationwide survey says that more than 60% of India's companies are hiring...

And more of India's best and brightest may be taking fresh jobs at homegrown clean energy technology companies.

You see, part of the recently passed U.S. stimulus package says U.S. citizens should be given precedence over H-1B holders when hiring is conducted in financial firms that receive bailout funds.

Even though tech firms aren't included, the combination of stalling rich-country economic conditions and the launch of major energy projects is drawing talent back home to India.

Bringing Brains Back to Bangalore

The H-1B 6-year guest visa category, which has allowed hundreds of thousands of Indian engineers and software specialists to work on our shores, has transformed the face of American technology.

Job services giant Manpower India says, "One-third of the engineers in Silicon Valley are of Indian descent," while over 7% of Silicon Valley firms have Indian CEOs.

The average income for those expat Indians is around $125,000, and their total contribution to the American economy in innovation and consumption reaches into the billions yearly. Aside from wage-earners and the cash they turn over, more than 100,000 Indian students are pursuing their education at U.S. colleges and universities.

Last spring in Washington, Bill Gates emphasized the importance of H-1B availability to companies like Microsoft, urging policymakers to issue more of the visas:

"Traditionally, the U.S. - because it's so attractive - has had this huge advantage that other countries bemoan. ... Now, they celebrate the fact that we're kicking them out after giving them the world's best education," Gates said.

Instead of inviting more talent, the number of H-1B visas issued yearly has been dropping, from nearly 100,000 in 1999 to just 65,000 in 2008.

Fast-forward to early '09. Every day brings dismal new economic news in the U.S...

So, more Indians who would have applied for H-1B see India as a fine place to start a business.

Writing from Bangalore, "India's Silicon Valley," Eureka Bharali of SiliconIndia.com thinks the country's energy progress will be made in large part by those who came back home.

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India's Smart Energy Growth

In an article titled "India to Have More Startups Due to H1B Visa Ban," Bharali points out India's advantage from bringing its brightest minds home.

The head of Bell Labs Research of India echoes Bill Gates in the article, saying those who left "are trying to come back to India, which has emerged as a land of opportunities. They gain the required experience in U.S. which will help them to thrive in India."

Other experts point to low cost of capital, lower inflation, and high government subsidies as booster shots to Indian startups.

Of course, Indians returning home can't just translate lessons learned in the unique American entrepreneurial atmosphere—they also must recalibrate to India's regional competitors, especially China.

Compared to China, which drew the bulk of the frenzied foreign direct investment into Asia over the past few years, India's energy market growth has been far healthier...

India enjoyed 7-8% economic growth in recent years, but primary energy consumption rose by just 3.7%, according to a 2007 statement to the Security Council by India's UN ambassador.

China, on the other hand, logged a 1.5% increase in energy usage for every 1% its economy expanded.

Now, India's government is aiming for 45,000 MW of installed wind energy capacity by 2030, up from 7,000 MW in 2007.

You can bet India's repatriated engineers and entrepreneurs will maximize every megawatt. Massive rural electrification schemes and the expansion of India's energy infrastructure are already reminiscent of what America did with the Tennessee Valley Authority in the 1930s.

India's all about smart energy growth for future prosperity.

But you don't have to wait for rounds of venture capital funding to bring Indian energy firms to full flower...

Indian Renewable Energy Companies

We've already seen the emergence of Indian clean energy firms like cellulosic ethanol maker Praj Industries, twice named Forbes's "Best Under a Billion Company in Asia."

Praj is listed on the Bombay Stock Exchange, and it's taking advantage of energy ties not only in India but also in the Philippines and other Asian countries.

In December 2008, Praj was hired to build a biofuel plant for the Tata conglomerate's Tata Chemicals division.

And we see more potential for international renewable energy companies that operate in India, profiting from a fresh influx of highly-skilled local staff that may come back to Bangalore, Bombay, and other Indian cities in the next few years.

In this turbulent economy, you go where the jobs and opportunity are.

For Indian entrepreneurs today, there's no place like home.

So in Green Chip International we're looking at a full range of companies—from startups to listed companies like Praj—as India prepares for a smart-growth energy boom.

Over in China, though, they're using cleantech to play clean-up for years of coal-fired GDP increases.

We've prepared a full report on China's energy challenges and how they're turning to wind, solar, and above all cleantech to limit the damage high energy intensity is causing.

To learn more about China's own green revolution and how you can profit, click here.

Regards,

Sam Hopkins

International Editor

Green Chip Stocks

Chinese Renewable Energy

Chinese leaders can finally breathe, now that the Olympics have gone by with relatively little trouble and more blue skies than many observers anticipated. Yet there is plenty of work to be done, and tons of money to be made in Chinese renewable energy.

This week, U.S. trade officials estimated the value of China's clean technology market at $186 billion by 2010, soaring up to over half a trillion dollars by 2020.

Why such whopping estimates?

Well, after the athletes headed home, on August 29 the Communist Party leadership in Beijing passed what's known as the Circular Economy Law, which will stimulate national cleantech spending through efficiency and emissions regulations.

The essence of the Circular Economy Law is very simple and familiar to green enthusiasts around the globe: Reduce, Reuse, Recycle.

But energy progress isn't just something you can legislate. As we've learned the hard way here in the U.S., the greening of our economy requires cultural change and economic oomph behind it.

The Circular Economy Law (C.E.L.) had been in the works for over a year, and after it takes effect on Jan. 1, 2009, the C.E.L. should set the country on a more sustainable path towards national wealth and power.

China can't do that alone. So China and the U.S. inked a decade-long energy and environment cooperation agreement back in June, including American firms in the circular, sustainable economy that is developing.

U.S.-China CleanTech Trade

Now, Deputy Commerce Secretary David Bohigian is leading a mission of 19 clean energy and environmental protection companies through Beijing and the provinces of Guangdong (Canton) and Shandong.

The companies range from small, unlisted start-ups to giants like G.E., and they're getting an on-the-ground look at how they can make money in the Middle Kingdom in the next ten years.

The main points of this summer's bilateral framework for cooperation are:

Transportation (China is home to the world's fastest trains and fastest-growing car market)

Clean energy technology (China has the potential to leapfrog developed countries by building brand-new grids optimized for renewables)

Water (China has 17 of the 20 most polluted streams in the world)

Air (China's official "blue sky" rating system falls far short of E.P.A. standards)

Forests/Wetlands (Deforestation is estimated to contribute 20% of the carbon man has added to the atmosphere, speeding global warming)

In all of these areas, General Electric (NYSE:GE), 3M (NYSE:MMM), Honeywell (NYSE:HON), and other companies with worldwide wherewithal can help China reach its goals while boosting their own shareholder value.

We'll keep you up to date with the best bets on U.S. companies doing business in China's booming market for cleantech and efficiency improvements.

Regards,

Sam Hopkins

www.greenchipstocks.com

P.S. - For those of you in the Jackson Hole area, my colleague Jeff Siegel will be speaking at the Modern Energy Investor Forum on September 24. Here's a link to the conference website.

Renewable Energy Resources

The International Energy Agency (IEA) just released a new report which has stated that the world will need to invest $45 trillion to cut greenhouse gases in half by 2050.

$45 Trillion!!!

Last month, environment ministers from the G8 backed this 50 percent target, and they'll call for it to be officially endorsed next month.

Now listen, I'm all for cutting greenhouse gases. Especially since any major cuts will require heavy investment in renewable energy resources.

Unfortunately, the IEA's report came off as a bit questionable when it analyzed what needs to be done to make this happen.

Let's go nuclear!!!

The IEA study has stated that the world will need to build roughly 1,400 nuclear power plants in order to meet its 50 percent reduction target.

The only problem is, they don't make any recommendations on how to pull this off.

How do they expect to build 1,400 new nuclear power plants when we barely have enough uranium for what we have in operation now?

During a June, 2007 press conference, the CEO of Cameco Corporation, the largest uranium producer in the United States, indicated that he expects demand to grow at 3 percent annually (this was before the IEA's announcement today), for the next decade, but doesn't see uranium mining being able to keep pace with demand. As it stands today, he believes the demand for uranium will exceed supply for the next eight or nine years.

Additionally, a 2006 study by the Energy Watch Group indicated that even under the best-case estimates of uranium resources, production will peak before 2050, assuming today's rate of use. And now they suggest we drastically increase our nuclear infrastructure?

And how quickly do they expect this to happen?

These things don't go up like shopping malls!

The last reactor built in the U.S. took 30 years to approve and build.

You think folks don't want a wind turbine in their backyard? Try to convince them that a nuclear power plant, complete with a mandatory evacuation plan, is a good idea.

Let's go clean coal!!!

The IEA's second scenario calls for an acceleration of carbon capture and storage technology for coal-fired power plants.

This begs the question, "Do these guys even consider the fundamentals of supply and demand?"

You've heard me go on and on in these pages before about how our so-called 250-year supply of coal is vastly overstated because the numbers don't take into account the energy content of our reserves.

Bottom line: when you look at the energy content of our coal, instead of just the numbers (because there are different types of coal, each with different energy contents), you'll find that we may have already passed the peak of the good stuff.

And globally, we could be looking at a peak of coal production by around 2020.

For the specifics on this analysis, I strongly recommend you read Chris Nelder's piece: The Dirt on Coal. It will truly open your eyes!

Perhaps if the folks making our energy decisions these days were to look at these numbers, we'd be spending less time talking about coal, and more time talking about renewables.

The IEA was quick to push nuclear and coal in the report, while only giving a slight mention to wind. Which, by the way, is only one part of the overall renewable energy mix.

I'm not saying we can transition to 100% renewable in the near term. But focusing so much attention on just our last few bits of non-renewable energy resources is doing nothing but wasting precious time.

And while the IEA's study will certainly get posted in every pro-nuclear and pro-coal website, we maintain that no matter how you slice it, nothing will change the fact that fossil fuel depletion will ALWAYS be the issue that enables the long-term success of a strong, renewable energy market.

With some decisive leadership, and some much-needed infrastructure upgrades and transmission development (which is necessary with or without renewables), this can be done safely, economically and sustainably.

According to the DoE...

· Enough electric power for the entire United States could be generated by covering about 9 percent of Nevada with parabolic trough systems. This is a plot of land roughly 100 miles on each side.

· There are about 14 million quads of recoverable geothermal energy beneath U.S. soil. That's about 140,000 times our current energy consumption.

· There's enough potential offshore wind energy off the coast of the United States to cover nearly all the current installed U.S. electrical capacity.

Yes, it's true that all of these solutions require large upfront capital costs. But wind, solar and geothermal resources, no matter what part of the world you're in, will always remain infinite and carbon-free.

And that's why, despite how much they continue to push the pipe dreams of nuclear and clean coal, renewable energy maintains a level of long-term value that no conventional energy source can touch.

To a new way of life, and a new generation of wealth...

Jeff

Bali Climate Conference

In the current edition of Nature Geoscience, scientists claim that the earth's tropical belt is expanding faster than expected, saying, "Remarkably, the tropics appear to have already expanded--during only the last few decades of the 20th century--by at least the same margin as models predict for this century."

According to previous models, the tropics were to extend 2 degrees north and south by the end of the 21st century. But only eight years into it, the tropics have already expanded by at least that much, as confirmed by five independent studies.

Traditionally, the Tropics of Cancer and Capricorn bounded the tropics on the north and south, respectively. But that was simply determined by the Earth's tilt on its axis. Now, climate scientists say, it's time to define the tropics by what's actually happening on the ground. And what's happening is a widening of tropical climate toward the Earth's poles.

That poleward movement would correspond to similar movement of seasonal storms. "The jet streams are moving poleward, and so, presumably, would the storm tracks," said co-author Dian Seidel of the US National Oceanic and Atmospheric Administration. This development would have negative implications for agriculture and water resources in nations located in the affected zones.

The Intergovernmental Panel on Climate Change (IPCC), which, coincidentally, is trying to negotiate a successor to the Kyoto Protocol this week, predicted this type of movement.

Those negotiations are taking place in Bali, Indonesia, a location that faces significant risks associated with climate change. In fact, just this week, Indonesian scientists reported that some Indonesian islands could be completely submerged by rising seas if nothing is done to curb climate change.

Just last week, the sea broke through barriers and flooded a major road to the international airport in the nation's capital, Jakarta. According to Environment Minister and conference host Rachmat Witoelar, if Indonesia is affected by rising seas "tens of millions of people would have to move out of their homes. There is no way this will happen without conflict."

Hopefully, that dire warning will serve as inspiration to the thousands of diplomats gathered in Bali this week.

Developed and Developing

But the representatives didn't seem too eager to bail out Indonesia's sinking islands. Instead, amid many opening day ceremonies, diplomats began to argue about whether or not developing nations, like China and India, should face the same emissions caps as developed nations.

Some said China and India are being asked to do too much, while others argued they are not doing enough. But, even among the disagreement, there was a glimmer of hope.

The consortium did agree to find ways to transfer more clean technology , like solar and wind, to developing nations--a surefire way to ensure greater participation on their part beyond Kyoto.

It could be that's what such nations were waiting for--a little support.

In fact, last week China's chief climate negotiator Yu Qingtai said that they would "definitely do more" to cut emissions if wealthier nations were willing to share more clean energy technology with China.

Of course, that raises a few questions. For starters, isn't that where Suntech Power (NYSE: STP) is based? And isn't that company doing pretty well, having doubled in price since July of this year?

Isn't China also the place China Sunergy Co. (NASDAQ: CSUN) and Yingli Green Energy (NYSE: YGE) call home? Two other solar companies that have done pretty well.

And yet, one can certainly see the other side of the coin. Why should China have to cap its emissions if an industrialized and wealthy nation like the US shows no inclination to do so?
,
Especially when US emissions, per capita, are about 20.6 metric tons, compared to China's 3.8 metric tons. And when nearly a quarter of China's emissions stem from the production of exported goods for the consumption of rich nations. China calls those "transfer emissions," and they're a big concern not only for China, but also for other developing nations.

Plus, China did decrease its energy intensity (the energy used to generate each dollar of national income) by 3% in the first three quarters of the year. It has also set a goal of reducing energy intensity 20% by 2010.

Premier Wen Jiabao keeps saying that his country is taking firm action to protect the environment, increase energy efficiency, boost the use of renewable resources and reduce greenhouse gas emissions.

And investors are taking notice. China is poised to surpass its 2010 wind installation targets this year--over two years ahead of schedule. By 2020, the rapidly growing nation hopes to produce 8% of its power from renewable resources, not including hydropower.

That seems like an attainable goal, especially because China is using its low-cost production base to manufacture renewable energy components. And a new national rule ensures that any wind turbines installed are 70% manufactured in China.

All these developments should provide nice returns to our subscribers, either through Green Chip Stocks or our latest publication, Green Chip International.

Make sure to keep an eye out for the latter, as we'll be providing sign-up information shortly.

In the meantime, we'll continue to watch investment opportunities abroad and the two-week conference in Bali.

Until next time,

Nick

Climate Change: Profiting from a Proven Scenario

I'd like to take a few moments to talk about proof.

According to Webster, proof is evidence that establishes the truth of something. We need proof to convict criminals. We need proof to make sound decisions. And, at least most of the time, we need proof to act rationally.

But as we've seen in the national political arena of late, proof doesn't seem to be all that important. The corrupt machine that is our Capitol has made erroneous decisions on some matters without proof, and failed completely to act on others where there is overwhelming proof.

Now I'm not going to get into the game of name dropping and card pulling. I'd rather take these few hundred words to offer some truths of my own.

First on the agenda is climate change. Let's talk, if only briefly, about some recent statements by scientists--you know, the guys who know what they're talking about because by the nature of their work they rely only on facts.

The International Panel on Climate Change (IPCC) is the world's most respected authority on the subject. Established in 1988--that's 20 years ago, people--by the United Nations (UN), the sole purpose of the group is to evaluate the risk of climate change brought on by humans.

I'd like to point out that the mere existence of this group says something about the reality of climate change. I mean, the UN doesn't have a UFO research team or pink elephant research team, does it?

Moving beyond just its existence, let's turn now to its reports. The panel's first report was published in 1990, followed by subsequent ones in 1995, 2001, and, most recently, 2007.

In that latest report, in the section titled, "The Physical Science Basis," the conclusions are as follows:

Warming of the climate system is unequivocal.
Most of (>50%) the observed increase in globally averaged temperatures since the mid 20th century is very likely (confidence level >90%) due to the observed increase in anthropogenic (human) greenhouse gas concentrations.
Hotter temperatures and rises in sea level "would continue for centuries" even if greenhouse gas levels are stabilized, although the likely amount of temperature and sea level rise varies greatly depending on the intensity of human activity during the next century.
The probability that this is caused by natural climatic processes alone is less than 5%.
World temperatures could rise between 2.0 and 11.5° F during the 21st century and:

Sea levels will probably rise by 7.08 to 23.22 inches.
There is a confidence level >90% that there will be more frequent warm spells, heat waves and heavy rainfall.
There is a confidence level >66% that there will be an increase in droughts, tropical cyclones and extreme high tides.

Both past and future anthropogenic carbon dioxide emissions will continue to contribute to warming and sea level rise for more than a millennium.
Global atmospheric concentrations of carbon dioxide, methane and nitrogen oxide have increased markedly as a result of human activities since 1750 and now far exceed pre-industrial values over the last 650,000 years.

If the relationship between greenhouse gas (GHG) emissions and temperature is too hard to grasp with words alone, take a look at the following charts.

Another section of the IPCC's 2007 reported, "Mitigation of Climate Change," outlines ways to prevent rising temperatures and decrease carbon emissions. And this, my friends, is where the money is.

You see, there is no way to mitigate climate change without heavy and constant investment in clean and efficient technologies. And that's what we at Green Chip pride ourselves on--finding companies that stand to make our readers the most money while providing solutions to very real and proven problems.

As I've said before, the proof is in the profits. So with that in mind, let's take look at some recent Green Chip recommendations.

The first is Bioteq Environmental Technologies (TSX: BQE). Jeff recommended this stock at the end of April, and already we've seen a 42% gain.

We've also seen profits on Comverge Inc. (COMV: NASDAQ), an energy efficiency company. Since Jeff's recommendation in May, this one is up 40%.

And of course you're well aware of World Water & Power (WWAT.OB)...the stock Jeff recommended a couple of years ago when it was trading for only $0.30.

Today the stock trades for $1.86 a share.

Listen: The grim situations the world is currently facing are real, but there are solutions. Very profitable solutions, just as has been the case with other obstacles in the history of the human race.

I'm once again reminded of the motto for the 1933 Chicago Word's Fair: "Science Finds, Industry Applies, Man Conforms." In terms of current events, we're somewhere between the latter two parts of that phrase.

This is proven stuff. It's up to you to conform--to blaze the trail toward a prosperous and profitable solution. Green Chip will help you lead the way.

Until next time,

Nick