President Barack Obama unveiled an initiative to help fund the largest energy grid modernization in United States history. The investment could have a wide-ranging impact on ETFs.

The Obama Administration has announced that it’s investing $3.4 billion in order to fund this project. Through the plan, 100 private companies, utilities, cities and manufacturers will receive grants ranging from $400,000 to $200 million in order to build a smart energy grid, reports Lynn Sweet for The Chicago Sun-Times. So far, these awards are the largest Recovery Act awards ever made on one day.

By Michael Kanellos

With the global gathering in Copenhagen to discuss climate change less than two months away, billionaire George Soros said in a speech that he will invest $1 billion of his own money into green technologies.

Energy Secretary Steven Chu has a different outlook on U.S. energy policy and renewable energy than President Barack Obama. Is there a way to close the gap and achieve success on this important issue so exchange traded funds (ETFs) can begin to benefit?

Chu believes that the 30%-40% emission reduction goal in the United States is an aggressive but technically possible goal. Matthew McDermott for TreeHugger reports that developing nations such as China, Brazil and India are calling on the United States to make these changes happen.

The ETF revolution started with a method to access broad market indexes in the United States like the S&P 500, the Nasdaq 100 and the Dow Jones Industrials. Then size (small, medium, large), style (growth, core, value) and sector investing (e.g., energy, health care, tech, etc.) came to the foreground. It wasn’t long before international markets opened up with pan-European and single-country ETFs for the developed world.

As the demand for more access to global possibilities increased, we began to see emerging market ETFs. And as the need for greater diversification across different asset classes soared, we began seeing choices in bonds, currencies, commodities and real estate.

The world of ETFs provides so many choices and sometimes, finding a particular sector ETF becomes daunting. But this short list should help narrow it down for you.

Specialty-sector ETFs, or “thematic” ETFs, have become a hit with investors, covering more than 40 unique themes in the market with more than $10 billion in assets under management, according to IndexUniverse.

I love building my own green portfolio with handpicked stocks, but for many investors venturing into this exciting market sector for the first time, it makes a lot of sense to establish an initial stake with index exchange traded funds (ETFs).

(Editor’s Note: The following is an excerpt from an article in the Exchange-Traded Funds Report in July. Subscribers to ETFR can read the complete piece here.)

Specialty-sector exchange-traded funds — also called “thematic” ETFs — have emerged as a major force in the ETF industry.

The debate regarding global warming has seemingly been reduced to two different arguments.

One, is global warming occurring? In this argument, critics attack data which is used to support the global warming thesis, e.g. do rising local temperatures reflect global warming or changes in land use? The one hundred year record of rising global ocean levels along with shrinking polar ice caps has largely settled this argument.

By Lara Crigger

From biofuels to peak oil, from wind power to solar "picks and shovels," we've been talking quite a bit about alternative and renewable energy on Hard Assets Investor lately. That's why we decided to get the lowdown on the latest developments in clean energy from Alt Energy Stocks' Tom Konrad, Ph.D., CFA.

By Rob Day

That big sucking sound you hear... is the sound of China deciding to become a big player in solar project installations, overnight.

The chart above (click to enlarge) shows the increasing energy efficiency of the U.S. economy, using data from the Energy Information Administration, updated recently through 2008.

As recently as 1970, it required 18,000 BTUs of energy for each real dollar of GDP produced, and by 2008 the energy required per dollar of real GDP has been reduced by more than 50%, to only 8,520 BTUs per real dollar of GDP. So the U.S. economy has more than doubled its overall energy efficiency in only 38 years.

Bottom Line: The U.S. economy has never been more energy efficient than it is today, and it just keeps getting more and more efficient every year as we find ways to produce more and more output with less and less energy. Amid all of the gloom and doom, this seems like something to celebrate. Over time, we're not becoming energy gluttons, we're actually becoming energy misers.

Among the 30 new exchange-traded products Deutsche Bank plans to launch through its db x-trackers unit in 2009 is a proposed fund that would track the S&P Carbon Efficient Index, a benchmark based on the performance of large-cap U.S. companies with relatively low carbon emissions while seeking to replicate the return of the S&P 500.

“This is the first time that investors have had the opportunity to track the S&P 500 with a 50% lower Carbon Footprint and 60% lower greenhouse gas emissions,” said Db x-trackers UK head Manooj Mistry.

By Ucilia Wang

The House Energy and Commerce Committee on Thursday voted 33-25 to approve the American Clean Energy and Security Act, which is meant to be a comprehensive effort to curb greenhouse gas emissions through measures such as a carbon emissions cap-and-trade program.

Yet cleantech is a risky play because despite all the investment in the field, most clean technologies are not profitable. Only wind energy can currently compete with fossil fuels without subsidies. But with carbon legislation now inevitable, technological advances bringing costs down, and market values depressed by the financial crisis, the future is looking brighter for cleantech shares.

These cost curves strike me as fanciful -- does anyone know how closely they have hewn to reality since being created in 2002? -- but they are interesting and darn colorful:

It was 2 years ago when the Chicago Mercantile Exchange began selling hurricane futures contracts. That's right. After Katrina and Rita, hurricane contracts were introduced for insurers to transfer their risk to the capital markets.

What if you're not interested in profiting from the potential danger of Mother Nature. What if you wish to make some money on "green" initiatives and a reduction in your carbon footprint?

By Michael Kanellos

If you look at the numbers, green power has momentum.

Close to 60 percent of the new generating capacity added in the U.S. in 2008 revolves around new renewables, i.e., solar, wind, geothermal and other renewable energy devices that aren’t large hydroelectric dams. That comes from Travis Bradford, who heads up the Prometheus Institute. (Prometheus and Greentech Media conduct joint research and hold events together.)

“Hard to value solar, wind and heavy capital equipment stocks right now,” wrote Rafael Coven, manager of the Cleantech Index, in an email to EnergyTechStocks.com’s managing editor last week. “Macro picture really blocks out the potential for cleantech and clean energy for the time being. Everyone has less cash and wealth and a lack of project financing is severe.”

The recent performance of PowerShares Cleantech Portfolio (PZD), which tracks the Cleantech Index, reflects the depressed state of cleantech, trading late last week at less than 50% of its 2008 pre-recession high.