Investment in Green Growth Industries Will Help Avoid a Severe Recession

The UN recommended in October 2008 that Governments use the global financial crises to restructure their financial systems to support green growth industries and researchers at Deutsche Bank's Asset Management(DeAM) Division agree.

Deutsche Bank has published a whitepaper arguing that increased spending on green infrastructure can provide enough economic stimulus to avoid a severe recession.

"The current crisis is making the necessity of tackling climate change an opportunity to stimulate growth through investment opportunities," says Mark Fulton, DeAM's global head of climate change investment research. "Severe though it is, the current financial situation can eventually be fixed, and should not be used as an excuse for inaction."

The paper states the climate change sector is well-suited for public equity markets and particularly, private markets such as venture capital, private equity, infrastructure, and timberland.

"Governments have before them a historic opportunity to 'climate proof' their economies as they upgrade infrastructure as a core response to any economic downturn," according to Fulton."Infrastructure stimulus can be tied directly to climate-sensitive sectors such as power grids, water, buildings, and public transport, which present a vast field for the creation of new technologies and jobs."

The whitepaper covers the current status of the climate change sector and how it relates to government infrastructure, in two parts. Part I examines the climate change investment universe. The paper says encouraging investment in renewable energy is a key focus, while energy efficiency technologies are also highly desirable in economies facing recession.

Part II examines how regulation interacts with the underlying dynamics of technology costs and energy prices. It argues how government regulation, including carbon pricing, traditional mandates, subsidies, and incentives, is a major driver of investment opportunities in climate change.

Another reason for companies to invest in green now? The sector continues to grow despite the slowing global economy. According to new figures from bank HSBC, companies in the climate-mitigation business now generate $300 billion in revenues each year.

To download a copy of the whitepaper, "Investing in Climate Change 2009 -- Necessity and Opportunity in Turbulent Times", click here.


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