Scientists and politicians worldwide are sounding alarms about global warming, arguing that a hotter planet could forever alter the environment.
Whether the threat from global warming is real or overblown, it could also damage the world economy.
A report released last year by the treasury office of the United Kingdom estimated that global warming could eventually cause the world’s combined gross domestic product to decline by up to 20 percent per year.
“It could amount to significant losses,” said Jonathan Pershing, a director at the World Resources Institute, an environmental think tank in Washington, D.C.
Yet those concerns also present a slew of investment possibilities ranging from individual stocks to entire sectors. Here are a handful of areas where big business and small-time investors are poised to benefit.
Engineering for hotter times
Environmental-engineering firms such as Broomfield-based MWH Global say recent concerns over global warming have already been a boon to business. The company’s contracts have gotten bigger as municipalities, state governments and businesses ramp up the dimensions of their projects to protect against the possibility of stronger hurricanes, heavier rainfalls and rising ocean levels.
“There is a general awareness of environment issues caused by global warming, and that is favoring funding at the political level,” said Bob Uhler, president and chief executive of MWH, a privately held company.
Publicly traded environmental engineering firms include Tetra Tech Inc. of Pasadena, Calif., URS Corp. of San Francisco and Haliburton Co. of Houston.
Spread out sector’s risk
The interest in zero- or low-emission forms of energy has prompted a slew of companies to go public, including Evergreen Energy of Denver and Ascent Solar of Littleton. Other companies, including General Electric and Archer Daniels Midland, have invested millions to get into the game.
Yet small-time investors might be well served opting for one or more exchange-traded funds, which are mutual funds that replicate specific sectors, said Fred Taylor, principal of Northstar Investment Advisors.
The strategy minimizes risk while offering investors exposure to alternative-energy companies, he said. Taylor pointed to three alternative energy related funds – PowerShares WilderHill Clean Energy, PowerShares Cleantech, PowerShares Water Resources – which each have matched or outperformed the broader market so far this year.
“It’s like the dotcom era: You just don’t know if it’s safe to make bets on just one or two companies,” he said.
Ahead of ski competition
Some in the West are becoming increasingly concerned about drought, the apparent surge in wildfires and declining snowpack that could crimp the region’s ski industry.
While those concerns apply here, Colorado’s relatively high elevation and cooler temperatures mean the state’s $2-billion ski industry could be hurt less than other Western states, said Brad Udall, director of the Western Water Assessment at the University of Colorado.
As a result, Udall said an increasing number of skiing and snowboarding enthusiasts might bypass resorts in Europe or those on the East and West Coasts in favor of Colorado.
“It appears that Colorado could do well in a globally warmer world,” said Udall.
However, critics say global warming could shorten the ski season and increase the cost of generating manmade snow.
Staff writer Will Shanley can be reached at 303-954-1260 or wshanley@denverpost.com.
