Converting the Sun’s Energy into Alpha
Apr 6th, 2008 | Filed under: Today's PostAfter the huge interest in last week’s commentary by clean tech investor Investeco on alternative beta in alternative energy, we dispatched our intrepid “fly on the wall” (see his previous posting from London) to one of the biggest events on the clean tech investing calendar, the Wall Street Green Trading Summit. We asked him to report back on any new markets that were ideally suited for an alpha-centric investor. Here’s what he found…
Dear Alpha Male,
(Thanks for the assignment on this side of the pond. Much easier on the wings than the last gig.)
Anyone who thinks alpha is finite and non-renewable ought to check out the market inefficiencies the burgeoning clean tech sector. According to the International Emission Trading Association, the international carbon market was worth approx. $70 Billion US in 2007 and according to New Carbon Finance the US market alone could equal $1 trillion by 2020.
Still, converting the sun’s energy in alpha isn’t like taking candy from a baby. Such enormous growth might suggest that, in terms of generating alpha, low hanging fruit should be plentiful. However, this was not the message to be taken from this gathering. There may still be plenty of opportunities for generating alpha in emissions trading, but unless you’re exploiting opportunities in places like Russia and the Ukraine, you’re going to have to work harder to get it than ever before. The vast capital (intellectual and financial) getting into the sector has already eaten up the lowest hanging of the fruit.
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