Full Disclosure

On April 13, in the New York Times, Abby Schultz points out that all three of the current presidential candidates say they are in favor of some type of cap on carbon emissions and astutely concludes that any such legislation could have significant impact on power companies.  More specifically, such caps will likely increase the cost of electricity generated through the burning of fossil fuels.

 

In the article, a senior analyst at Innovest Strategic Value Advisors suggests that not all of these costs will be able to be passed on to consumers.  Some of the costs will have to be absorbed by shareholders in the power corporations.  Obviously, some companies will be better prepared for carbon caps than others…and consequently a more attractive investment.  See our previous post “Carbon’s Gonna Get Expensive” which highlights the Big 3 financial institutions’ decision to more closely scrutinize loans for the construction of new carbon emitting power plants.

 

The Carbon Disclosure Project attempts to analyze the investment risk in corporations based on their environmental practices.  The organization has published a report for the last six years.  The report was published on behalf of 315 investors who manage assets worth $41 trillion.  This is enough to get anyone’s attention. 

 

One potential way of reducing the cost of the production of electricity, as well as a improving company’s rating in the Carbon Disclosure Project report is through investment in cleaner power generation technologies.

 

We understand that the looming carbon crises did not materialize over night.  It took decades for us to arrive at this point and will likely take decades for us to correct the problem.  But if we don’t start soon, where will be 50 years from now?