A Clear Vision

“We will basically transform our economy with new developments related to air and water–new kinds of windmills, photovoltaics, hybrid technology. Some of this will be done by existing companies, some by start-ups,” he says. “Putting a price on carbon will further this because we can monetize the effects.”

The cap and trade system employed by the CCX and other climate exchanges around the world caps the amount of pollutants that member firms are permitted to emit and distributes allowances or credits that represent the right to emit a specific amount. Companies that do not meet the cap buy credits from companies that emit below their specified amounts.

In another similarity to the tech boom, interest in green and so-called sustainable technologies seems to be driven more by individual investors than by their financial advisors, who–Sandor speculates–would probably benefit from further education. “It would serve advisors well to be aware of the developing opportunities in the sectors that are dealing with sustainability,” Sandor says. “People interested in playing in that space can do it by buying stock in listed companies. There will be opportunities to create wealth. And individual investors are certainly aware of the stock indexes for renewable energy, the ETFs, the private equity investment. You can’t help but notice…the Dow Jones Sustainability Index, the (Dow Jones) U.S. Water Index.”

Sandor says it is probably time to target education of the advisor community. “We are seeing a significant interest from advisors, because high-net-worth individuals are attracted to the sector–partly because it carries an excellent risk/reward and secondarily, because there’s a component that wants to do the right thing. After all,” he adds, “You can do good and do well!”