Responsible Alternatives

No one knows this better than Climate Change Capital Ltd. (CCC), a London-based investment manager and advisory group specializing in opportunities created by transition to a low carbon world. CCC manages the world's largest private sector fund committing money to companies and projects generating emission-reduction credits.

Ben Caldecott, head of policy for the firm's advisory team and the director of the group's think tank, says that to generate significant interest in carbon credits we'll need a deep, liquid international carbon market supported by plenty of demand-something he doesn't expect in the near term. Even so, "I think the future is very bright, very exciting," he says.

One reason for his optimism, he says, is that low-carbon technologies are expected to be an important factor in meeting increasing demand for energy and other resources from the rapidly growing global middle class. According to the Organisation for Economic Co-operation and Development, this population could swell from 1.8 billion people to 3.2 billion by 2020 and 4.9 billion by 2030. (Most of the growth, 85%, is expected in Asia.) 

"The fact that we need to become dramatically more resource efficient will help drive investment into clean technology, regardless of other factors," he says.

Caldecott is also optimistic because solar and wind are becoming cost competitive with coal and gas, more governments and regions are encouraging policies and frameworks to reduce carbon, and more mainstream investors are coming aboard. 

Cumulative investments in clean tech and energy efficiency topped $1 trillion last year. In 2011 alone, $260 billion was invested, almost five times the $53.6 billion total in 2004, according to Bloomberg New Energy Finance. "The scale-up has been staggering," he says. 

Caldecott expects many investment opportunities in sustainable property, particularly with commercial properties that retrofit existing buildings for energy efficiency. That's the focus of CCC's sustainable commercial property fund. "I think the market is massive," he says

As for clean tech, Caldecott says the safer bets are those companies that offer strong energy efficiency solutions without having to rely on subsidies or government policies.

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