Elections and Greentech, are they related?

As we head to vote here in the US and elect a new president (hopefully, at the end of the week we shall know the results), I wonder what is at stake for Greentech.

Originally, one of my opening arguments for Greentech investment was the great performance of Greentech when compared to regular stocks (see chart below)

Even though the index is bouncing back faster than the S&P500, this argument is not as powerful as it used to be (in September when the Cleantech Index was 20% to 40% above S&P500).

So, why invest on Greentech?. I believe that, in spite of Wall Street's valuation of Greentech, there is still an undeniable wave towards alternative energy, water purification and irrigation, as well as waste management optimization. Because enough people have come to realize we need to get off oil and start finding alternatives. They have also realized we need to treat our environment with respect in order to have a place where to live.

Looking at the hard facts, in today's economy, governments have become the largest corporations. As times get harder for the private sector, the governments (in theory) can print as much money as necessary to keep them afloat. Here in the US, one of the key points of the campaign was "Alternative Energy". Therefore: The largest corporation in the world has promised to pour money into Greentech

Moreover, when both candidates were asked to name plans that will get cut and plans that will remain under the new economic reality; both, Obama and McCain specifically named their Energy Policy plan as being a priority.

So, what is their plan? I will try to be as neutral as possible and list (directly from their website) their Energy and Environmental initiatives:

McCAIN

ENERGY:

• Will Commit Our Country To Expanding Domestic Oil Exploration
• Promoting And Expanding The Use Of Our Domestic Supplies Of Natural Gas
• The Nation Cannot Reduce Its Dependency On Oil Unless We Change How We Power Our Transportation Sector
• Clean Car Challenge: $5,000 tax credit for each and every customer who buys a zero carbon emission car
• A $300 Million Prize To Improve Battery Technology
• Flex-Fuel Vehicles (FFVs): calls on automakers to make a more rapid and complete switch to FFVs (automakers have committed to make 50 percent of their cars FFVs by 2012)
• Alcohol-Based Fuels Hold Great Promise As Both An Alternative To Gasoline And As A Means of Expanding Consumers' Choices
• Today, Isolationist Tariffs And Wasteful Special Interest Subsidies Are Not Moving Us Toward An Energy Solution
• Will Effectively Enforce Existing CAFE Standards (CAFE standards - the mileage requirements that automobile manufacturers' cars must meet)
• The U.S. Must Become A Leader In A New International Green Economy. Green jobs and green technology will be vital to our economic future
• Will Commit $2 Billion Annually To Advancing Clean Coal Technologies
• Will Put His Administration On Track To Construct 45 New Nuclear Power Plants By 2030 With The Ultimate Goal Of Eventually Constructing 100 New Plants
• Will Establish A Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D
• Will Encourage The Market For Alternative, Low Carbon Fuels Such As Wind, Hydro And Solar Power
• Proposes A Cap-And-Trade System That Would Set Limits On Greenhouse Gas Emissions While Encouraging The Development Of Low-Cost Compliance Options
• Greenhouse Gas Emission Targets And Timetables:
  2012: To 2005 Levels (18% Above* 1990 Levels)
  2020: To 1990 Levels (15% Below 2005 Levels)
  2030: 22 Percent Below 1990 Levels (34% Below 2005 Levels)
  2050: 60% Below 1990 Levels (66% Below 2005 Levels)
• Will Make Greening The Federal Government A Priority Of His Administration
• Will Move The United States Toward Electricity Grid And Metering Improvements To Save Energy
• Believes We Must Understand The Role Speculation Is Playing In Our Soaring Energy Prices
• Does Not Support A Windfall Profits Tax. A windfall profits tax on the oil companies will ultimately result in increasing our dependence on foreign oil

CLIMATE CHANGE

• Climate Policy Should Be Built On Scientifically-Sound, Mandatory Emission Reduction Targets And Timetables
• Climate Policy Should Utilize A Market-Based Cap And Trade System
• Climate Policy Must Include Mechanisms To Minimize Costs And Work Effectively With Other Markets
• Climate Policy Must Spur The Development And Deployment Of Advanced Technology
• Climate Policy Must Facilitate International Efforts To Solve The Problem

OBAMA

SHORT TERM SOLUTIONS: IMMEDIATE RELIEF FROM PAIN AT THE PUMP

• Emergency Energy Rebate. Will require oil companies to take a reasonable share of their record‐breaking windfall profits and use it to provide direct relief worth $500 for an individual and $1,000 for a married couple
• Crack Down on Excessive Energy Speculation
• Swap Light and Heavy Crude, Release Oil from Strategic Petroleum Reserve to Cut Prices

MID TO LONGTERM SOLUTIONS: NEW ENERGY FOR AMERICA

• Tackle Climate Change
• Implement Cap and Trade Program to Reduce Greenhouse Gas Emissions - 80 percent below 1990 levels by 2050
• Make the U.S. a Leader on Climate Change
• Invest in Our Secure Energy Future and Create 5 Million New Jobs
1. Strategically invest $150 billion over 10 years to accelerate the commercialization of plug‐in hybrids, promote development of commercial scale renewable energy, encourage energy efficiency, invest in low emissions coal plants, advance the next generation of biofuels and fuel infrastructure, and begin transition to a new digital electricity grid
2. “Green Vet Initiative”: more of our veterans can enter the new energy economy
3. Convert our Manufacturing Centers into Clean Technology Leaders
4. Create New Job Training Programs for Clean Technologies
• Make our Cars, Trucks and SUV’s Fuel Efficient
• Increase Fuel Economy Standards: 4 percent per each year
• Invest in Developing Advanced Vehicles and Put 1 Million Plugin Electric Vehicles on the Road by 2015.
• Within one year of becoming President, the entire White House fleet will be converted to plug‐ins as security permits; and
• Half of all cars purchased by the federal government will be plug‐in hybrids or all‐electric by 2012
• Partner with Domestic Automakers: $4 billion retooling tax credits and loan guarantees for domestic auto plants
• Mandate All New Vehicles are Flexible Fuel Vehicles
• Develop the Next Generation of Sustainable Biofuels and Infrastructure: 60 billion gallons of advanced biofuels by 2030
• Establish a National Low Carbon Fuel Standard: fuel suppliers in 2010 to begin reducing the carbon of their fuel by 5 percent within 5 years and 10 percent within 10 years
• Promote the Supply of Domestic Energy
• “Use it or Lose It” Approach to Existing Leases: Oil companies have access to 68 million acres of land, over 40 million offshore, which they are not drilling on
• Promote the Responsible Domestic Production of Oil and Natural Gas
• Bakken Shale in Montana and North Dakota which could have as much as 4 billion recoverable barrels of oil according to the U.S. Geological Survey
• Unconventional natural gas supplies in the Barnett Shale formation in Texas and the Fayetteville Shale in Arkansas
• National Petroleum Reserve‐Alaska (NPR‐A) which comprises 23.5 million acres of federal land set aside by President Harding to secure the nation's petroleum reserves for national security purposes
• Facilitate the construction of the Alaska Natural Gas Pipeline
• Getting More from our Existing Oil Fields: experts believe that up to 85 billion barrels of technically recoverable oil remains stranded in existing fields
• Diversify Our Energy Sources
• Require 10 Percent of Electricity to Come from Renewable Sources by 2012
• Develop and Deploy Clean Coal Technology
• Safe and Secure Nuclear Energy
• Commitment to Efficiency to Reduce Energy Use and Lower Costs
• Deploy the Cheapest, Cleanest, Fastest Energy Source -Energy Efficiency: reduce electricity demand 15 percent from projected levels by 2020
• Set National Building Efficiency Goals: all new buildings carbon neutral, or produce zero emissions, by 2030
• Overhaul Federal Efficiency Standards
• Reduce Federal Energy Consumption: achieve a 15 percent reduction in federal energy consumption by 2015
• Flip Incentives to Energy Utilities: measures will benefit utilities for improving energy efficiency
• Invest in a Smart Grid
• Weatherize One Million Homes Annually
• Weatherize One Million Homes Annually

On a final note I would like to mention the smart effort that Pickens is doing by linking his plan to politics, by signing up people to create political pressure. Regardless of my liking or disliking the Pickens Plan, the idea deserves kudos (details here)

Until next week... SHALOM!

* Not a typo! It is what is written at the website