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posted on 08 December 2015

How To Profit From The Paris Talks No Matter What Politicians Say About Climate Change

by Keith Fitz-Gerald, Money Morning

Money Morning Article of the Week

More than 30,000 diplomats have converged on Paris, France, for what is being called "one of the most important international conferences in history."

"Tackling climate change is a shared mission for mankind," said Chinese President Xi Jinping, the head of the world's largest carbon emitter. "All eyes are now on Paris."

President Obama added:

"If we act here, if we act now. If we place our short-term interests behind the air our young people will breathe... then we won't be too late for them."

French President Hollande declared:

"Here in Paris. We will decide on the very future of the planet."

Perhaps I'm too skeptical for my own good, but that's very similar to what world leaders said in 1997 just before the Kyoto Accords. And those have proven to be little more than lip service.

Even if 100% of the Kyoto requirements are followed by 100% of the 192 countries that signed them, they will deliver less than 0.02° Celsius in cooling by 2050 despite costing hundreds of billions of dollars.

Is that worth it?

I have no idea - I'm not a scientific expert.

But I do know beyond any shadow of a doubt that trillions of dollars are going to get set in motion no matter what happens in La Ville Lumière.

Here's what that means for your money and how you can cash in.

Here's How to Grab Your Share of the Profits

Global warming is a lightning-rod topic that's as divisive as it is controversial. It's easy to take a variation of either argument and still not be wrong.

For example, we've been led to believe that "97% of all climate scientists" believe global warming is man-made. According to the Telegraph, that oft-cited stat comes from a Masters research candidate who surveyed 10,257 scientists, all but two of whom endorsed the man-made warming hypothesis.

Yet, a subsequent review revealed that only 77 of the 10,257 were bona fide climate scientists, which means that they made up only 0.75% of the actual sample. Assuming 97% of those same 77 approved, you're talking about only 74 scientists, or 0.72% of the entire sample queried.

Worse, subsequent studies have peer-reviewed the underlying papers and shown the "consensus" view to be so terribly flawed that several well-known climate scientists have actually come out against it.

Worse still, the 97% consensus is now only 43%, according to a 2015 study by Bart Strengers, Bart Verheggen, and Kees Vringer of the PBL Netherlands Environmental Assessment Agency.

Or consider the widely held belief that we're facing rising global temperatures that are unprecedented thanks to CO2 emissions that rose concurrently beginning in the 1980s and 1990s.

In fact, the 0.5° C rise in temperature from 1975 to 1998, which scientists refer to as the hottest years in history, wasn't any greater than the maximums recorded from 1910 to 1940 - 70 years before global warming was even a concept. There's considerable evidence that the world's been heating and cooling for centuries and climatologists, in fact, call the 450 years from 1350 to 1800 the "Little Ice Age."

People forget that in the 1970s, scientists were completely consumed by global cooling thanks to - you guessed it - man-made pollution and everything from conventional combustion engines to communist population controls. The hype was as pervasive then as it is now, found in every major newspaper, in books, in movies, and on television.

My point is that you can take every argument being made for global warming and spin it the other direction. There are always two sides to the coin so to speak, and neither is "wrong."

This, sadly, is about as far as most people are going to get on the issue. There have already been millions of hours wasted fighting about who caused what and why. Paris ensures there will be millions more.

Either way, the war on climate change means big profits for savvy investors.

Most people are going to focus on the obvious choices - reducing carbon emissions, renewables, and conservation. They'll do okay, but the real money is going to be spent on technology that's still in its infancy.

Take the Internet, for instance.

More than 2.5 billion people log on every day. If the Internet were a country, it would have the sixth-largest electrical consumption on the planet, according to Ideas & Discoveries. Google's server farms alone require enough power for 200,000 homes a day. The amount of CO2 created by web surfing is equal to global air traffic emissions.

So the next time an environmentally sensitive soul urges you to cut down on your driving or to buy local produce or to buy a carbon neutral plane ticket, ask him or her to ditch social media for the same reason and see what happens.

Real breakthroughs on climate change are going to come from companies doing things differently - and that's where I get very, very interested because the financial implications are simply enormous.

Let me give you an example I'm tracking right now.

Last April, researchers from Japan's Tohoku University combined carbon with rubidium to create a new superconductive metal called Jahn-Teller. Unlike other superconductive metals, however, this one doesn't require expensive cooling. That means it can be used at room temperature.

This is a profound development for two reasons: 1) super conductive materials can carry 100 times the electricity that conventional power cables can and 2) they are zero loss, meaning there's no waste, so every bit of power sent into an electrical grid stays there instead of dissipating.

Right now the world uses 20 trillion kilowatt-hours a year worth of electricity and approximately 1.2 trillion of that simply vanishes into thin air because of inefficient wiring using old-fashioned copper lines. Few people realize that roughly 6% of all electricity simply disappears every second of every day of every year.

Super-conductive cables made of Jahn-Teller metal could save so much power in this country alone that three U.S. nuclear plants (out of 61 total nationwide) could be taken offline permanently, according to the Karlsruhe Institute of Technology.

I've only seen one world leader so far get close to the thinking I'm sharing with you today - Israel's Prime Minister, Benjamin Netanyahu.

He was the 38th guest to speak in Paris, and his comments were barely reported despite the fact that I think they're the most important conference remarks made so far.

Netanyahu pointed to new technologies as being the best weapon available to limiting carbon emissions, noting,

"Israel is a small country with big ideas. I believe it is not enough that we have those ideas or apply them only to our country, we are eager to share them with you."

He may have been thinking about StoreDot Ltd., the Israeli company that's just announced a battery breakthrough allowing it to recharge electric vehicles in three minutes. Or he might have been alluding to his country's Brenmiller Energy Project, a $77 million solar panel field that uses cutting-edge technology to harvest energy for an amazing 20 hours each day.

The unspoken message isn't that Netanyahu has some master government plan that could reform the world's energy system if only he exported it from Israel. Rather, it's that the technology and imitative of the private sector in Israel and elsewhere can slash carbon emissions faster than any global agreement...

...if government gets out of the way.

If the diplomats do anything in Paris, they should agree to regulate climate change with the presumption that innovation is good. Not that it's a problem.

There are dozens of companies like Nordic Water Supply ASA working on really innovative solutions, like floating 5 million gallons of water across the ocean to drought-ravaged regions that need it. Or like Bjarke Ingels Group, which is building a 10-mile long seawall system to protect Manhattan from flooding as the world's oceans rise.

Alcoa Inc. (NYSE: AA), for instance, plans to build an aluminum smelter in Greenland, where rich deposits of mineral resources are being uncovered by melting ice for the first time in hundreds of years. At $9 a share, it's a screaming buy at a time when the markets have totally discounted future growth potential.

Shipping firms like Beluga Shipping GmbH are now able to route tankers through previously unnavigable, ice-locked channels, saving time and hundreds of thousands of dollars per voyage. The company is privately held but there are other shipping companies I'm tracking on our paid sister services that may be of interest to you.

Monsanto Co. (NYSE: MON) and other agricultural giants are adapting to hotter climates with new drought-resistant seed stock. It may be controversial, but you can bet it's profitable despite the fact that the company plans to eliminate its carbon footprint by 2021.

Don't get distracted. At the end of the day, climate change is an issue, but how you deal with it is an opportunity.

Follow the money, not the hype, and you'll know which is which.

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