US Exchanges And Environmental Investing

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An interesting bit of follow-up on my article last week about exchanges and environmental markets. Both the NYMEX [NYSE:NMX] and the Chicago Climate Exchange (CCX) [OTC:CXCHF.PK] have partnered up, in the past 2 weeks, with specialty cleantech and alt energy index makers to launch derivatives products. On March 14, Chicago Climate Futures Exchange (CCFE), a wholly owned subsidiary of the CCX, and WilderShares LLC, announced (PDF document) a licensing agreement to launch a futures market based on the WilderHill Clean Energy Index [AMEX:^ECO]. The ECO is also the underlying index for the Powershares WilderHill Clean Energy Portfolio ETF [NYMEX:PBW]. The CCFE-ECO Index futures, as they will be known, are the CCX’ first foray outside of the world of emissions trading and into the realm of cleantech investing. If you were wondering where a pure-play environmental exchange would ever diversify, you got your answer. Then, on March 20, NYMEX concluded an agreement with Ardour Global Indexes, LLCto introduce alternative energy index futures and options contracts.” The contract will be based on the Ardour Global Index (AGI) series, of which I counted 6 on Ardour’s website (priced either in USD or in EUR). To be sure, listing derivatives based on alt energy and cleantech is different from seeking exposure to pure environmental markets as I defined them last week. Nevertheless, this is all parts and parcels of the same broad movement. Once solid cash markets for environmental commodities are in place, the relationship between environmental markets and cleantech/alt energy stocks/indexes will become clearer, and a larger array of options will becoming available for investors to hedge their bets or exploit inefficiencies. So let me reiterate what I said at the end of last week’s article: keep an eye on how exchanges are positioning themselves with regards to environmentally-driven markets, as these markets will present very attractive growth opportunities in years ahead. P.S. The Climate Exchange ADR [OTC:CXCHF.PK] has rebounded somewhat since last week – it closed at 16.25 today up from around 12.50 last Thursday. DISCLOSURE: I do not hold a position in any of the stocks discussed in this article.


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