While a small pocket of contrarians argues that climate change is phony, a lot of others are trying to look around the corner and figure out how to adapt to it—and even profit from it.
The market, in fact, seems to be betting that the carbon economy is in long-term decline, with coal stocks especially battered and coal mining giant Peabody Energy declaring bankruptcy recently. Oil firms are reeling as well, thanks to the low price of crude and new efforts in many countries to regulate carbon-based energy and spur cleaner alternatives.
Some well-known alternatives to carbon, such as wind and solar energy, have been attracting investor interest for years. But there are now some emerging investing opportunities that come from a little deeper in the crystal ball. “If you accept the premise of climate change, where does that lead you to? To sustainable agriculture investing,” Matthew Weatherley-White, co-founder of the Caprock Group, tells me in the video above. “Perhaps longer-term and more opportunistic: buying farmland in Siberia.”
That might sound far-fetched, but a warmer planet will open new land to farming, while rendering once arable land too parched to grow anything. “There are investors who are acquiring land in northern Canada with the expectation that eventually you’ll be able to grow crops,” Weatherly-White says. “If you extend the growing season incrementally on both ends, suddenly you can start growing stuff.”
There are more imminent ways to invest in ways humankind is likely to adapt to climate change. Rising temperatures mean rising ocean levels and a need for new types of insurance for coastal areas. As governments clamp down on carbon emissions, there will be even more emphasis on ways to conserve energy and burn less fuel. Building efficiency is already important and will likely become more so.
As with any investment, there are risks to betting on climate change. A few years ago, solar company Sun Edison seemed poised to benefit from a rapid shift to renewable energy, government subsidies meant to make it happen, and the plunging cost of solar panels. But it declared bankruptcy this month, after taking on too much debt and growing too quickly. “The challenge is getting the time frame right,” Weatherley-White says. “As Warren Buffett likes to say, 'You can be 100% right in your investment, but if you’re 100% wrong in your timing, you’re still 100% wrong.'” So don’t plow your money into Siberia just yet—but at least start studying it on a map.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.
