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Kevin Grewal is the founder, editor and publisher of ETF Tutor as well as serves as the editor at www.SmartStops.net, where he focuses on mitigating risk and implementing exit strategies to preserve equity. Additionally, he is the editor at The ETF Institute, which is the only independent... More
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  • What Could Make Clean Energy Unstoppable 0 comments
    Aug 14, 2009 1:47 PM | about stocks: PBD, IXC
    By Kevin Grewal, Editorial Director at www.SmartStops.net
    As global warming advocates take center stage, governmental administrations preach clean energy reform and clean energy has become an integral part of a nation’s success, an alliance between China and the United States will create an environment where clean energy can thrive.
    China and the United States are the world’s two largest producers of carbon emissions and have already adopted various programs to reduce a heavy reliance on crude oil, create new cleaner energy and improve the overall health of the environment. However, a recent study conducted by McKinsey & Company suggests that unless the two work in unison, their efforts to curb the global warming issue could potentially be stalled resulting in neither nation maximizing the its desired end results.
    Although both nations, in conjunction with private investors are pursuing electrified vehicles, carbon capture and storage (NYSE:CCS) and concentrated solar power, these technologies are expensive and need massive infrastructure and research which will make more sense and have amplified effects with the proper scale, standards and technology transfer that can be provided through a partnership between the two nations.
    Although the emergence of electrified vehicles and CCS can, and probably will, emerge in both nations, imagine the scale and global impact that it will emerge if both worked simultaneously together. Currently, nearly 80% of oil consumed in the United States and 50% of the oil consumed in China are used to fuel vehicles. If both nations made the switch to electric vehicles, the consumption of oil would take a big hit and the momentum would likely force other nations to compete in the electrified-vehicle industry.
    As for CCS, capturing green house gases is expensive and neither nation is pursuing the technology aggressively, however, this could change if both pooled their resources together.
    The study also indicates that concentrated solar power may not even have a future if the two nations don’t come together, set common standards, coinvest in projects and R&D and undertake other joint initiatives. 
    In addition to the obvious advantages that this partnership could potentially have on the environment, from a political aspect it could bring the nation’s closer together and improve overall relations. Working together to make these technologies real will not be an easy thing to do, but will be good for the overall health of the globe.
    From an investor’s perspective, some equities that could potentially benefit from the aforementioned partnership are the following:
    The PowerShares Global Clean Energy ETF (PBD), which has already rebounded nicely from a March low of $8.73 to close at $16.03 on Thursday, an increase of 84%. 
    The iShares S&P Global Energy (IXC), up 39% from a March low of $23.11 to close at $32.17 on Thursday.
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