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Windfall from McKenzie Funk is a fantastic new book that I have been reading over the past couple of weeks - and it has been awe-inspiring and an eye-opener on a lot of subjects. This book is a must-read for all investors to understand the business of climate change. The book is unique in that Funk travels to dozens of countries following the money, exploring and reporting from the frontlines.

About the Author:
McKenzie Funk is an award-winning magazine writer and a founding member of the global journalism cooperative Deca. His stories appear in Harper's, National Geographic, Rolling Stone, Outside, and The New York Times. Website: www.mckenziefunk.com

About the Book:
McKenzie Funk has spent the last six years reporting around the world on how we are preparing for a warmer planet. Funk shows us that the best way to understand the catastrophe of global warming is to see it through the eyes of those who see it most clearly-as a market opportunity. Global warming's physical impacts can be separated into three broad categories: melt, drought, and deluge. Funk travels to two dozen countries to profile entrepreneurial people who see in each of these forces a potential windfall.

Takeaways From the Book

  • Written like a thriller novel - the book is hugely entertaining and of course, resourceful based on the subject matter.
  • Climate change provides a plethora of investment opportunities - the author takes the reader on a world tour from the Canadian Arctic to the desalination plants in Israel to the wildfires of California to the eroding coastline and villages of Bangladesh. All the while exploring investment opportunities for the coming changes.
  • One of the two main takeaways from the book - There will be winners and losers. Winners will be the high altitude richer nations and the opportunities that arise from the warming climate. Funk pinpoints that countries stand to benefit from the oil & gas, minerals and other riches that will become available once the arctic ice melts. Another positive for the high altitude countries includes the longer farming seasons. Countries that stand to benefit include Canada, Greenland, Norway and Russia. Meanwhile, the poorer and low-lying countries like the island nations in the Caribbean and Pacific stand the most to lose. Climate data predicts that the dry places will become dryer, wet places will become wetter.
  • Lots of funds already exist and have been around for more than a decade and the author pinpoints Deutsche Bank and a few other hedge funds. Common across all are the big theme for investing - food, energy, and water. However, we still aren't at a place where we can trade water futures like we do with oil, wheat or other commodities. Water futures trading is probably just around the corner, with Australia at the forefront of the water market.
  • Funk traces the steps of the rising climate asylum seekers from West Africa to Bangladesh and the hardships they face from the emigration. Such eco-refugees have a very low priority in first world countries compared to political, religious and violence refugee seekers; and countries will continue facing the onslaught of eco-refugee seekers over the decades.
  • A majority of the world's population lives at or near water bodies due to historical reasons. With the threat of flooding increasing every year due to rising water levels or storms (think Hurricanes Katrina and Sandy), some Dutch companies are at the forefront of design and innovation to deal with the problem. Funk interviews and explores how Netherlands has fought off the sea since the middle ages and how companies are using their expertise to market its technologies to not only low-lying countries such as Maldives, but also consulting for projects in the US.
  • The author finally wraps up by following the money with a company based in Seattle called Intellectual Ventures (a private company) that has been accused to be a patent troll in the past. But the company has the blessings (as investors) of the same companies that it threatens to sue and other interested parties in geo-engineering the planet with ideas ranging from pumping sulfur-dioxide into the stratosphere to cool the planet down to hurricane suppressors and de-acidification of oceans. What is interesting is that the company, although remains adamant that it wants to carry out these projects for the good of the planet, it continues to file of thousands of patents in the hope to commercialize the operations someday.

Recommendation
All in all, I give this book a resounding two thumbs up and really recommend every investor to read it. If you are looking for investing ideas for the coming years and decades, this will get you started on that path. Note that the author does not provide a list of stocks that you need to pick up (although he does mention a few companies in the book - some of which have been bought out or defunct), but gets you thinking and kickstarts the thought process.

Source: Windfall - Book Review