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Message: CLSA hedge fund bets on electric cars, China wind
http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE59F2KX20091016 CLSA hedge fund bets on electric cars, China wind Fri Oct 16, 2009 8:52am EDT By Neil Chatterjee SINGAPORE (Reuters) - CRA Management, a clean-technology focused hedge fund manager, is betting on offshore wind, electric vehicles and cleaner coal, all technologies that it sees taking off on a massive scale in Asia. Andrew Pidden, managing director of the Singapore-based firm, said the world will move toward a low energy and low carbon economy because of several large drivers -- the rising cost of energy, the desire to clean up the planet and a push from consumers for green products. "This trend is going to continue for the foreseeable future, because resources are constrained -- the atmosphere has been used as a dump for free," said Pidden on the sidelines of a UBS hedge fund conference. CRA, part of Asia-focused brokerage CLSA, manages $100 million of assets spread over several funds, including a long-short fund that invests in clean tech equity and a more focused fund dedicated to clean water. CRA has beaten indices such as the MSCI index of Asia-Pacific stocks traded outside Japan since its inception in August 2006, Pidden said without giving details, though many clean-tech funds dived last year. Pidden said the firm was betting on existing technologies and did not like to take technology risks. He said the areas investors were most interested in, because of the potential scale, were transportation and power generation.
"We believe in 10 years there will be a lot of wind off China and South Korea," he said. "People want electricity -- coal as power generation needs to be addressed," he said. China expects wind capacity to hit 100 gigawatts by 2020. Vestas is the world's biggest maker of wind turbines, while Chinese industry suppliers include gearbox maker China High Speed Transmission and China Wind Systems. A move to fully electric cars would completely change the auto supply chain, from different raw materials such as lithium for batteries to more consumer financing for the higher initial purchasing cost and less need for a spare parts industry. "In 15 years there will be drop in demand for oil as a transportation fuel," he said. Chile's SQM is the world's top lithium producer and experts say a lithium boom may be coming. Bolivia holds 50 percent of the world's lithium deposits, but extracting it may be a challenge. "The era of oil will be over by 2050 because we will have electrified the transportation system," Pidden said confidently. He said Asian countries were in various states of moving toward such cleaner economies, with Japan leading the globe in making its manufacturing more energy-efficient after the 1970s oil shocks, China building more nuclear power capacity than anyone else, and India studying how to avoid polluting its ground water. The fund has a large exposure to Japan, home to electric car leaders such as Toyota and Nissan as well as battery firms Panasonic and Hitachi. Automakers and battery firms are now seeking tie-ups. "Asia leads on battery development, solar panel production, and it's soon to lead in installations with China," he said. "Asia will lead the world in the development of these products." (Additional reporting by
; Editing by Rupert Winchester)
India opens door to climate deal, EU stuck
Fri Oct 16, 2009 2:57pm EDT
By
Sean Maguireand Pete Harrison
NEW DELHI/BRUSSELS (Reuters) - India softened climate demands on Friday, helping bridge a rich-poor divide, but said a global deal may miss a December deadline by a few months. In contrast, European Union states struggled to agree a common stance for financing a U.N. climate pact, meant to be agreed in Copenhagen at a December 7-18 meeting. India wanted generous aid on advanced carbon-cutting technologies but dropped a core demand that industrialized countries cut greenhouse gases by 40 percent by 2020. "If we say, let's start with 25 percent, that's a beginning. I'm not theological about this. It's a negotiation. We have given a number of 40 but one has to be realistic," environment minister Jairam Ramesh said in a Reuters interview. Ramesh said Prime Minister Manmohan Singh, keen to overturn India's image as obstructionist in multi-lateral negotiations, had mandated him to be flexible. "I tell you my prime minister has told me two days ago, 'don't block, be constructive...make sure there's an agreement.' What more can I say?" Indian is now in line with the European Union, which has promised to cut greenhouse gas emissions by 20-30 percent by 2020 below 1990 levels. U.S. President
wants to return U.S. emissions to 1990 levels by then.
India also now supported a British estimate that the developed world should pay about $100 billion annually by 2020 to help poorer nations cope with and slow climate change. Until now it has suggested that the developed world pay 1 percent of their national wealth -- a far higher figure which some rich countries branded a fantasy. But Europe struggled to find a common position on climate finance on Friday, as member states guard national treasuries with a robust economic recovery still not in sight. SILENT The EU was silent about stepping up climate aid to developing nations, after talk last month from its executive Commission of paying up to 15 billion euros ($22.4 billion) a year by 2020 to break the impasse between rich and poor. China and India say they cannot cut emissions and adapt to changing temperatures without help from industrialized nations, which grew rich by burning fossil fuels, emitting carbon. A draft EU report for finance ministers called the past figures "a useful estimate for overall public and private efforts" but pointed to the "uncertainty...of such numbers." And cracks emerged over EU plans for cuts in emissions. The 27-country bloc has pledged to cut its own emissions to 20 percent below 1990 levels by 2020, and to increase cuts to 30 percent if other rich regions take similar action. But Romania and Slovakia have proposed making the increase to 30 percent less of a foregone conclusion, documents obtained by Reuters show. Romania also questions proposals to cut emissions by up to 95 percent by 2050. In Nairobi, the United Nations on Friday urged a smarter approach to biofuels that could be part of a shift to renewable energies under a Copenhagen deal. "A more sophisticated debate is urgently needed," U.N. Environment Programme Executive Director Achim Steiner told reporters. Generating electricity at power stations using wood, straw, seed oils and other crop or waste material was "generally more energy efficient than converting crops to liquid fuels."
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