The Obama Administration has proposed a program to limit greenhouse gas emissions. Under a “cap and trade” scenario, companies exceeding the set limits could purchase and emission allowances on the open market. Republican detractors label the proposal a veiled tax on business, and predict job losses and further damage to the economy. The Environmental Defense Fund, however, found 1,200 companies in 12 states that would benefit from a carbon cap program resulting in the creation of approximately 5 million “green” jobs.
The companies cited in the research develop and manufacture technologies that can help fight climate change. Additionally, the study predicted that a carbon cap would create economic opportunity in sectors including agriculture, waste heat recovery, wind energy, and other alternative forms of power production. Two companies that stand out from the list developed by the Environmental Defense Fund, First Solar and Cree Inc., highlight the potential profitability of a carbon cap.
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First Solar (FSLR)
Granted, the Tempe, Arizona-based manufacturer of thin-film solar panels has had a rough 2009 to date, with stock prices falling off 20% in February. Over the past 52 weeks, FSLR’s stock has traded from $85.28 to $317, and was hovering around $150 in mid-April. In general, the solar sector has not produced profits, has lacked leadership, and has not shown the ability to sustain growth.
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All of that, however, could change in the event of a carbon cap. First Solar has a solar cell that will produce one watt of clean electricity for .98 cents, with a goal of bringing that down to 65-.75 cents by 2012, in line with traditional costs for energy generated by natural gas and coal. Without question, First Solar is the leading contender in the evolving solar sector.
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Cree, Inc. (CREE)
Cree is the number one developer of LED lighting in the United States. The semiconductor company, founded in 1987, is based in Durham, North Carolina. They introduced the first blue LED in 1989. The company has shown strong growth, with revenue of $493 million for fiscal year 2008. Among its products, Cree sells LED down-lights to corporations, campuses, restaurants, and hotels and has a long-term agreement with the Austrian Zumtobel Group for similar sales in Europe.
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While LEDs for general illumination have previously been too expensive and too dim, advances in the technology, coupled with the bulbs’ lack of emissions or of the toxic mercury by-products present in compact fluorescents, signal widespread adoption of LEDs in the future. Since a carbon cap could well include a mandated end to the use of traditional light-bulbs, the future for alternative light manufacturers looks strong. (CREE is currently trading at $26.91 and trending upward.)
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Profiles of these companies and the others cited by the Environmental Defense Fund can be found on the group’s website. The findings of the research indicate that far from retarding economic growth, companies on the cutting edge of climate-friendly products and services will see a significant boost from a federal program to cap greenhouse gases.
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[tags] Obama Administration, greenhouse gas, cap and trade, Environmental Defense Fund, Tempe, Arizona, solar cell, Durham, North Carolina, LED, CREE, Cree Research Inc., FSLR, First Solar Inc. [/tags]