“The war on the so-called greenhouse gases is officially under way,” writes Chris Mayer, “and it is going to be expensive. Each passing month brings us closer to capping, taxing or cutting the gases thought to cause global warming.
“I don’t think investors appreciate how far-reaching such efforts could be. And there will be definite winners and losers as a result. Some of these are far from obvious and some are in plain sight.
“The first obvious big loser is American coal, from which we get half about of our electricity needs. Already, you see companies reacting to this news. Consol Energy, a big coal company, said it halted two big mines in Appalachia because of uncertainty over the costs of pending new regulations. If you own a U.S. coal miner, I’d fold the hand, so to speak.
“Natural gas-fired plants, though, may be one winner relative to coal, because natural gas burns cleaner than coal. Already, in just the last few months, as the market ponders talk of new emissions caps, you could see gaps opening up between coal utilities and natural gas utilities.
“For example, here is a three-month chart of a Capital & Crisis pick, National Fuel Gas, which uses gas, versus AES, the big coal utility.
“Though the new rules could be a year or more away, those gaps may well widen over time as investors anticipate the likely bad ending for coal. So I would not own a U.S. coal utility right now, either. It is no fun wearing a target on your back — especially since the guy throwing the darts makes all the rules.”
Ian Mathias is the managing editor of Agora Financial's Income Franchise, where he writes and researches about retirement, dividend and fixed income investing. Much of his work is featured in The Daily Reckoning and Lifetime Income Report, Agora Financial's flagship income investing advisory.
Previously, Ian managed The 5 Min. Forecast, a fun, fast-paced daily look into the future of global markets and macroeconomics. He's also worked in public relations, where media outlets like Forbes, AP, Yahoo! and MSN Money have syndicated his writing. If he's not at work, you'll probably find Ian on a bicycle, racing up and down the "mountains" of Baltimore County. Ian has a BA from Loyola University in Maryland.
We should be taxing carbon emissions. Even if global warming does not matter, fossil fuels are a dwindling resource. People that use the most of this dwindling resource should pay the most taxes.
This is just plain common sense.
A carbon tax and dividend as suggested by James Hansen would be the best approach. The tax would be returned to the people and the government would get no chance to game the money. It would simply reward those that use less fossil fuels and reward those that conserve–no more and no less.
The market, through the law of supply and demand, already ensures that those who use more of a dwindling resource will pay more.
On the flipside, those who conserve are rewarded by having their money freed up for other uses.
I don’t see why we need to add taxes to influence consumption. Rising prices will take care of that by itself.
Government life support…liquidity injection… or a giant Band-Aid…whatever you want to call it, quantitative easing is the keeping the global economic ship afloat – but for how much longer? Richard Duncan explores…
Ben Bernanke introduced the world to the concept of "quantitative easing" back in 2002. It was an "unorthodox plan" to save the economy from the horrors of deflation. But the monstrous economy it has actually created is in some ways far worse. And as Richard Duncan explains, it's not going to end any time soon. Read on..
While the technical details of Bitcoin may intimidate the novice, they shouldn’t keep him from getting in on a digital currency revolution that -- while taking different forms -- isn’t going away. How do you get the simplest, easiest-to-act-on tips about how to invest, safeguard and grow your digital wealth? Dominic Frisby has more…
The duality is stark. In one hand, we have an energy renaissance underway, in the other, a virus is threatening to wreak havoc on the markets and, potentially, your life. Nothing we’re currently doing to fight the Ebola virus will work in 2014, say the researchers. Nothing we’re currently doing will beat it in 2015, either. We need a new game-plan. Read on…
Lose your shirt in 3D printing stocks this year? Don’t kick yourself. You’re not alone. (Okay, kick yourself a little if it’ll make you feel better.) You need to make sure you don’t lose your 3D-printed shirt in the next tech craze. Because there will be a next time. Look, it’s really not your fault if you got taken for a ride on 3D stocks. Greg Guenthner has more...