Environmental Boom Ignites Stocks

Earlier today (4/16/08) stocks of companies that address the world's biggest environmental challenges soared more than the market averages. It's as if thousands of investors suddenly read Jared Diamond's Collapse (focusing on agricultural productivity) and the Socolow and Pacala paper (on ways to save the earth seven billion tons of carbon emissions), then invested accordingly today...

...Stocks like Monsanto (+7%) and the agri-biotech sector (+3-4%), First Solar (+4%) and the solar sector (+3-7%), the broader alternative energy sector (+3-15%), Badger Meter (+20%) and the metering sector (+3-7%), Lindsay (+6%) and the water sector (+3-4%), the engine and air filtration industry sector (+3-5%), the green electronics sector (+3-15%), and so on.

We'd still be adding to equity weightings selectively in key industries backed by major secular trends, as suggested by several of our latest posts (including here). See also our post titled "Climate Change -- Investment Waves Will Keep Coming" and our April 4th post after an earlier increase in environment-related equity allocation.

Today it's as if investors were struck harder than ever by the imminent major implications of skyrocketing energy prices and global warming. It makes perfect sense. Crude oil punched to $115/barrel on supply projects. Yesterday, a paper presented at the European Geosciences Union conference predicted a rise in sea levels three times higher than predicted by the U.N.'s Intergovernmental Panel that won the '07 Nobel Prize -- a full 0.8-1.5 meters that would have massive consequences for hundreds of millions of people and economies. Today, Bush, seemingly the last and most important global-warming-denier, finally highlighted the need to constrain greenhouse-gas emissions, in a speech that emphasized the need to invest in technologies (such as carbon capture and sequestration -- see some of the market's inferences, above) and his seemingly increased willingness to sign binding international agreements.