ENVIRONMENT December 20, 2007, 5:00PM EST
How to Cash in on a Warming Planet
by Adam Aston

Set aside, for now, the really complex and costly financial implications of climate change. Ignore the tricky abstractions of carbon trading. Forget the worries over flooded cities and the ins and outs of renewable energy.

Instead, consider just a few everyday money-making ideas created by the warming of our planet. For example, oenophiles could short the stocks of vintners in drought-prone areas such as Australia or California and bet on upstarts in Canada and England, where new wineries are sprouting as temperatures rise. Or, since ski resorts are seeing less and less snow, it might make sense to buy and hold manufacturers of snowmakers.

Of course, the potential of climate-change investing goes far beyond mere curiosities. A growing number of advisers to big institutional investors and high-net-worth types are sizing up companies based on how likely they are to benefit from rising energy prices, stricter regulations, and changes to the natural world ranging from freshwater shortages to new disease patterns and more chaotic weather. Since public opinion is increasingly driving U.S. policymakers to act, analysts' climate predictions need not be perfectly prescient to pay off. "Perception drives valuations," says Edward M. Kerschner, chief investment strategist for Citi Global Wealth Management (C), who recently made public a list of some 90 "climate consequences companies" he believes could excel as the climate changes and limits on carbon emissions multiply.

If there's a whiff of familiarity to investing in climate change, that's because some of its key elements have already attracted attention. Pure-play renewable energy stocks, for example, make up a big slice of the new climate change offerings and have seen meteoric gains over the past year. The difference is that climate change strategists make their picks from a larger pool, including everything from small-cap alternative energy startups to globe-spanning conglomerates, as well as a few decidedly nongreen plays. Given the breadth of companies in this space, "there's significant opportunity for actively managed funds," says Michael Herbst, a mutual fund analyst at Morningstar (MORN).

HOT OPTIONS
Consider HSBC's (HBC) Global Climate Change Benchmark Index, which tracks 300 equities, spans 34 countries (11 of which are emerging markets), and includes small, medium, and big companies. Simulations of the 45 months prior to its September debut show the index would have beaten the Morgan Stanley (MS) Capital International (MSCI) global index by 70%. In November, HSBC launched a fund in Europe that focuses on a subset of about 60 companies from the index. A U.S. version, the GIF Climate Change Fund, is due by April.

Deutsche Bank's (DB) DWS Climate Change Fund beat HSBC to the American market last November. It mirrors the German DWS Klimawandel fund, which since its launch last February is up 10.4%. For DWS's U.S. offering, expect somewhat pricey expense ratios of 1.75% to 2.5% of assets.

For a lower-cost approach, stock pickers can follow the pros' logic and make their own calls. Luckily, evaluating equities on their potential to capitalize on climate change is easier than untangling the complexities of global warming. A useful approach is to split the opportunities into two broad groups, explains Mark Fulton, climate-change strategist at Deutsche Bank Asset Management: mitigation and adaptation.

The first basket includes products and services that slow the flow of greenhouse gases by using less energy or by substituting clean energy for fossil fuels. That's why so many renewables such as solar and wind show up in the new climate-change funds and indices. As of September, for example, the top 10 holdings in DWS Climate Change Fund included nine that either produce carbon-free energy or help conserve fossil fuels: solar energy (LDK Solar (LDK), SolarWorld, Umicore, and First Solar), wind energy (Acciona Energia and Gamesa), electric efficiency specialists (ABB (ABB) and Emerson Electric (EMR)), and an electric vehicle maker, Tanfield Group.

Fulton's second category includes opportunities to help the world adapt to the effects of the changing climate. This group may offer hidden values in some more obscure sectors. DWS's fund, for example, owns Veolia Environment, a water-services specialist that can help parched regions adjust. Citi's Kerschner, likewise, predicts growth for Leighton Holdings, an Australian engineering contractor that is building a growing number of plants that make seawater drinkable.

SHADES OF GREEN
If anything, the greenest of investors may be put off by aspects of climate-change investing. Citi likes big nuclear plant operators such as Entergy (ETR) and Exelon (EXC), despite worries over their waste, since their reactors crank out huge volumes of juice with virtually no greenhouse gases. Fluor (FLR), a U.S. engineering construction giant, makes the cut since it's positioned to benefit from demand for new power plants, regardless of whether they're powered by clean gas, controversial nuclear, or even not-so-clean coal.

Many of the top picks among the adaptation plays are cheaper than mitigation stocks. Ormat Technologies (ORA), a leader in renewable geothermal energy, has a pricey p-e ratio of 41, based on 2008 earnings. But in the less glamorous auto sector, makers of mileage-boosting technologies may outsell competitors more reliant on gas guzzlers. By this logic, France's PSA Peugeot Citroën, which builds Europe's most fuel-thrifty fleet, stands to beat out U.S. rivals as global demand for eco-vehicles rises. Its p-e is just 9.

An upside to these broad climate-change funds is that they expose investors to plays of all sizes, in both developed and emerging markets. But tracking such a diverse portfolio requires unusually broad expertise in complex energy, technology, and cross-border markets, notes Angus McCrone, chief editor at New Energy Finance, which tracks green markets. Regulatory reversals can also dent returns. As U.S. lawmakers debated the recent energy bill this fall, renewable stocks were whipsawed on each rumor that beneficial tax credits would disappear or expand.

Back to Investment Outlook 2008 Table of Contents

Aston is Energy & Environment editor for BusinessWeek in New York .

November 28, 2007
To Muslim Girls, Scouts Offer a Chance to Fit In

By NEIL MacFARQUHAR
MINNEAPOLIS — Sometimes when Asma Haidara, a 12-year-old Somali immigrant, wants to shop at Target or ride the Minneapolis light-rail system, she puts her Girl Scout sash over her everyday clothes, which usually include a long skirt worn over pants as well as a swirling head scarf.

She has discovered that the trademark green sash — with its American flag, troop number (3009) and colorful merit badges — reduces the number of glowering looks she draws from people otherwise bothered by her traditional Muslim dress.

“When you say you are a girl scout, they say, ‘Oh, my daughter is a girl scout, too,’ and then they don’t think of you as a person from another planet,” said Asma, a slight, serious girl with a bright smile. “They are more comfortable about sitting next to me on the train.”

Scattered Muslim communities across the United States are forming Girl Scout troops as a sort of assimilation tool to help girls who often feel alienated from the mainstream culture, and to give Muslims a neighborly aura. Boy Scout troops are organized with the same inspiration, but often the leap for girls is greater because many come from conservative cultures that frown upon their participating in public physical activity.

By teaching girls to roast hot dogs or fix a flat bicycle tire, Farheen Hakeem, one troop leader here, strives to help them escape the perception of many non-Muslims that they are different.

Scouting is a way of celebrating being American without being any less Muslim, Ms. Hakeem said.

“I don’t want them to see themselves as Muslim girls doing this ‘Look at us, we are trying to be American,’ ” she said. “No, no, no, they are American. It is not an issue of trying.”

The exact number of Muslim girl scouts is unknown, especially since, organizers say, most Muslim scouts belong to predominantly non-Muslim troops. Minneapolis is something of an exception, because a few years ago the Girl Scout Council here surveyed its shrinking enrollment and established special outreach coordinators for various minorities. Some 280 Muslim girls have joined about 10 predominantly Muslim troops here, said Hodan Farah, who until September was the Scout coordinator for the Islamic community.

Nationally, the Boy Scouts of America count about 1,500 youths in 100 clubs of either Boy Scouts or Cub Scouts sponsored by Islamic organizations, said Gregg Shields, a spokesman for the organization.

The Girl Scouts’ national organization, Girl Scouts of the U.S.A., has become flexible in recent years about the old trappings associated with suburban, white, middle-class Christian scouting. Many troops have done away with traditions like saying grace before dinner at camp, and even the Girl Scout Promise can be retooled as needed.

“On my honor I will try to serve Allah and my country, to help people and live by the Girl Scout law,” eight girls from predominantly Muslim Troop 3119 in Minneapolis recited on one recent rainy Sunday before setting off for a cookout in a local park.

Some differences were readily apparent, of course. At the cookout, Ms. Hakeem, a former Green Party candidate for mayor, negotiated briefly with one sixth grader, Asha Gardaad, who was fasting for the holy month of Ramadan.

“If you break your fast, will your mother get mad at me?” Ms. Hakeem asked. Asha shook her head emphatically no.

The troop leader distributed supplies: hot dogs followed by s’mores for dessert. All was halal — that is, in adherence with the dietary requirements of Islamic law — with the hot dogs made of beef rather than pork.

It was Asha’s first s’more. “It’s delicious!” she exclaimed, licking sticky goop off her fingers as thunder crashed outside the park shelter with its roaring fire. “It’s a good way to break my fast!”

Women trying to organize Girl Scout troops in Muslim communities often face resistance from parents, particularly immigrants from an Islamic culture like that of Somalia, where tradition dictates that girls do housework after school.

In Nashville, where Ellisha King of Catholic Charities helps run a Girl Scout troop on a shoestring to assist Somali children with acculturation, most parents vetoed a camping trip, for example. They figured years spent as refugees in tents was enough camping, Ms. King recalled.

But a more common concern among parents is that the Girl Scouts will somehow dilute Islamic traditions.

“They are afraid you are going to become a blue-eyed, blond-haired Barbie doll,” said Asma, the girl who at times makes her sash everyday attire. Asma noted that her mother had asked whether she was joining some Christian cabal. “She was afraid that if we hang out with Americans too much,” the young immigrant said, “it will change our culture or who we are.”

Troop leaders win over parents by explaining that various activities incorporate Muslim traditions. In Minneapolis, for instance, Ms. Hakeem helped develop the Khadija Club, named for the first wife of the Prophet Muhammad, which exposes older girls to the history of prominent Muslim women.

Suboohi Khan, 10, won her Bismallah (in the name of God) ribbon by writing 4 of God’s 99 names in Arabic calligraphy and decorating them, as well as memorizing the Koran’s last verse, used for protection against gossips and goblins. Otherwise, she said, her favorite badge involved learning “how to make body glitter and to see which colors look good on us” and “how to clean up our nails.”

Girl Scouts of the U.S.A. does not issue religious badges, but endorses those established by independent groups. Gulafshan K. Alavi started one such group, the Islamic Committee on Girl Scouting, in Stamford, Conn., in 1990. The demand for information about Muslim badges, Mrs. Alavi said, has grown to the point where this year she had the pamphlet listing her club’s requirements printed rather than sending out a photocopied flier. She also shipped up to 400 patches awarded to girls who study Ramadan traditions, she said, the most ever.

Predominantly Muslim troops do accept non-Muslim members. In Minneapolis, Alexis Eastlund, 10, said other friends sometimes pestered her about belonging to a mostly Muslim troop, although she has known many of its members half her life.

“I never really thought of them as different,” Alexis said. “But other girls think that it is weird that I am Christian and hang out with a bunch of Muslim girls. I explain to them that they are the same except they have to wear a hijab on their heads.”

Ms. Farah, who served as an outreach coordinator in Minneapolis and remains active in the Scouts, said she used the organization as a platform to try to ease tensions in the community. Scraps between African-American and Somali girls prompted her to start a research project demonstrating to them that their ancestors all came from roughly the same place.

Ms. Hakeem, the troop leader, said she tried to find projects to improve the girls’ self-esteem, like going through the Eddie Bauer catalog to cut out long skirts and other items that adhere to Islamic dress codes.

All in all, scouting gives the girls a rare sense of belonging, troop leaders and members say.

“It is kind of cool to say that you are a girl scout,” Asma said. “It is good to have something to associate yourself with other Americans. I don’t want people to think that I am a hermit, that I live in a cave, isolated and afraid of change. I like to be part of society. I like being able to say that I am a girl scout just like any other normal girl.”

Copyright 2007 The New York Times Company

November 28, 2007
In French Suburbs, Same Rage, but New Tactics

By ELAINE SCIOLINO
PARIS, Nov. 27 — Two years after France’s immigrant suburbs exploded in rage, the rituals and acts of resentment have reappeared with an eerie sameness: roving gangs clashing with riot police forces, the government appealing for calm, residents complaining that they are ignored.

And while the scale of the unrest of the past few days does not yet compare with the three-week convulsion in hundreds of suburbs and towns in 2005, a chilling new factor makes it, in some sense, more menacing. The onetime rock throwers and car burners have taken up hunting shotguns and turned them on the police.

More than 100 officers have been wounded, several of them seriously, according to the police. Thirty were hit with buckshot and pellets from shotguns, and one of the wounded was hit with a type of bullet used to kill large game, Patrice Ribeiro, a police spokesman, said in a telephone interview. One of the officers lost an eye; another’s shoulder was shattered by gunfire.

It is legal to own a shotgun in France — as long as the owner has a license — and police circles were swirling with rumors that the bands of youths were procuring more weapons.

“This is a real guerrilla war,” Mr. Ribeiro told RTL radio, warning that the police, who have struggled to avoid excessive force, will not be fired upon indefinitely without responding.

The police have made more than 30 arrests but have been restrained in controlling the violence, using tear gas to disperse the bands of young people and firing paint balls to identify people for possible arrests later.

The prefecture of the police in the Val d’Oise area, where most of the violence has occurred, said Tuesday night that there were no reported injuries among civilians that could be linked to the police.

The events of the past three days, set off by the deaths of two teenagers whose minibike collided with a police vehicle on Sunday, make clear that the underlying causes of frustration and anger — particularly among unemployed, undereducated youths, mostly the offspring of Arab and African immigrants — remain the same.

“We have heard promise after promise, but nothing has been done in the suburbs since the last riots, nothing,” said François Pupponi, the Socialist mayor of Sarcelles, which has been struck by the violence, in an interview. “The suburbs are like tinderboxes. You have people in terrible social circumstances, plus all the rage, plus all the hate, plus all the rumors, and all you need is one spark to set them on fire.”

On Tuesday, there were the first signs of the violence spreading beyond the Paris region when a dozen cars were set afire in the southern city of Toulouse.

In the wake of the unrest in 2005, the government of then-President Jacques Chirac (with Nicolas Sarkozy, now the president, as the tough, law-and-order interior minister) announced measures to improve life in the suburbs, including extra money for housing, schools and neighborhood associations, as well as counseling and job training for unemployed youths. None has gone very far.

At that time, Mr. Sarkozy alienated large numbers of inhabitants in the troubled ethnic pockets of France, but afterward reverted to a low-key approach, which he has maintained ever since. During his presidential campaign, he stayed away from the troubled suburbs, aware that his presence could inflame public opinion against him.

In his six months as president, he has largely focused on injecting new life into France’s flaccid economy through creating jobs and lowering taxes and consumer prices.

His most notable initiative in dealing with youth crime has been punitive: the passage of a law last July that required a minimum sentence for repeat offenders and in many cases allowed minors between 16 and 18 years old to be tried and sentenced as adults.

Since September, Fadela Amara, his outspoken junior minister charged with drawing up a policy for the suburbs, has been holding town hall meetings throughout France in preparation for what is to be a “Marshall Plan” for the suburbs. Her proposals are scheduled to be made public in January.

“We’ve been talking about a Marshall Plan for the suburbs since the early 1990s,” said Adil Jazouli, a sociologist who focuses on the suburbs. “We don’t need poetry. We don’t need reflection. We need money.”

After he returns from China on Wednesday morning, Mr. Sarkozy plans to visit a seriously wounded senior policeman at a hospital near the northern Paris suburb of Villiers-le-Bel.

It was in Villiers-le-Bel on Sunday afternoon that the deaths of two teenagers identified as Moushin, 15, and Larimi, 16, occurred, the event that set off the latest unrest. The teenagers were riding without helmets on a minibike that collided with a police car; rumors that the police had caused the accident elicited calls for revenge.

The crash was reminiscent of the electrocution deaths in another Paris suburb in October 2005 of two teenagers, who, according to some accounts, were running away from police. That event set off the worst civil unrest in France in four decades, plunging the country into what Mr. Chirac called “a profound malaise.”

But Mr. Sarkozy, still reeling from huge transit strikes and student protests throughout France this month, is unlikely to use the current unrest as a vehicle to turn introspective or vent his rage too loudly at those he once called “scum.”

In 2005, he vowed to clean out young troublemakers from one Paris suburb with a Kärcher, the brand name of a high-powered hose used to wash off graffiti; when he pledged in another suburb that year to rid poor suburban neighborhoods of their “scum,” he was pelted with bottles and rocks.

On Tuesday, Prime Minister François Fillon told Parliament that the clashes were “unacceptable, intolerable, incomprehensible,” and he pledged punishment for the offenders in the affected suburbs.

“Those who shoot at policemen, those who beat a police officer almost to death, are criminals and must be treated as such,” he said, adding, “We will do everything so that tonight there is a maximum security presence.”

Under heavy security on Tuesday night, Mr. Fillon visited Villiers-le-Bel, where the two youths had died, in what he called a show of support for the police and firefighters. About 1,000 police officers were deployed there.

Critics of the Sarkozy government complain that many areas in the suburbs are without a police presence, and that the only time there is a show of security is after violence erupts.

“Sarkozy promised to send more police to the suburbs, but in so many places there are fewer police than there were two years ago,” said Mohamed Hamidi, the French founder of Bondy Blog, a popular political blog created in the Paris suburb of Bondy after the outbreak of violence in 2005. “He didn’t keep his word. Who suffers from all the violence and the burning cars? The people who live in these neighborhoods.”

In Villiers-le-Bel on Tuesday night, the atmosphere was tense, with white police trucks and antiriot police officers on the streets. Earlier in the day, about 300 people, including children, marched silently in memory of the two dead teenagers.

At a bakery on a small plaza in town, Habib Friaa, the baker, mourned their deaths, especially that of Larimi, who had started an apprenticeship with him two months ago.

“Baking was his passion,” Mr. Friaa said. “He was a courageous young man, someone who had hope.”

Ariane Bernard contributed reporting from Paris, and Basil Katz from Villiers-le-Bel.

Copyright 2007 The New York Times Company
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from Prince Andrew, critical words for U.S. on Iraq
By Stephen Castle
Monday, February 4, 2008
LONDON: While Prince Andrew declares himself a fan of the United States - and his cellphone ring tone comes from the American TV drama "24" - the man who is fourth in line to the British throne has some critical words for America's Iraq policy and thinks that Washington should have listened to advice from London.

In a rare Buckingham Palace interview ahead of his departure Tuesday for a 10-day U.S. trip to support British business, the prince described the United States as Britain's No. 1 ally but conceded that relations were in a trough. There are, he added, "occasions when people in the U.K. would wish that those in responsible positions in the U.S. might listen and learn from our experiences."

The prince has a full-time role as a trade envoy for Britain but for 22 years he was in the Royal Navy, serving as a helicopter pilot during the Falklands conflict, and Iraq is a preoccupation.

Because of its imperial history, Britain has experienced much of what the United States is going through, Prince Andrew said.

"If you are looking at colonialism, if you are looking at operations on an international scale, if you are looking at understanding each other's culture, understanding how to operate in a military insurgency campaign - we have been through them all," he said. "We've won some, lost some, drawn some. The fact is there is quite a lot of experience over here which is valid and should be listened to."

Prince Andrew's view that post-invasion chaos in Iraq could have been avoided if President George W. Bush's administration had listened more is widely shared in Britain. Geoff Hoon, the former British defense secretary, has said that British views on Iraq were ignored in the decisions to outlaw the Baath Party and dissolve the Iraqi military.

The fallout from Iraq has fueled, the prince argues, "healthy skepticism" toward what is said in Washington, and a feeling of "why didn't anyone listen to what was said and the advice that was given."

After all, British views had been sought - "it's not as if we had been forcing that across the Atlantic."

The prince, 47, says it was an adjustment to go from a life in the navy to being a figurehead for business as special representative for international trade and investment, the role he took on in 2001. His office has reminders of his former life, including paintings of 19th-century naval scenes.

"I was the glamorous one dressed in a uniform who flew his helicopter and I was there to defend, to be an instrument of Her Majesty's government whenever and wherever they so chose. And I thought it was frightfully glamorous," he said.

He added, "When you then come out and go into the business world, actually you realize that the real people who are actually making the United Kingdom what it is are the people who are doing business."

The Falklands War in 1982 was a formative experience and one that, he says, changed him "out of all recognition" and left "a different view of life." Since then he has been to Argentina, visited the country's navy and found himself at a memorial to the Belgrano, an Argentine warship sunk by the British that resulted in the loss of 368 lives.

Prince Andrew says he was very fortunate to marry Sarah Ferguson; they divorced in 1996 after their 10-year marriage "didn't go quite according to plan." The prince speaks warmly of his ex-wife and praises her success in the United States, where her weight-loss campaigning and other activities are reported to have cleared her substantial debts.

"We have managed to work together to bring our children up in a way that few others have been able to do and I am extremely grateful to be able to do that," he said.

Though periodically portrayed by the British tabloids as a playboy, Prince Andrew is regarded as the most affable of the queen's children.

The only faint signs of irritation in the interview last week appeared when asked about his travel expenses, which have been criticized by the British media. They are, he says, a "little tiny spot in the ocean by comparison to many people."

The trauma that followed the 1997 death of Diana, Princess of Wales, underlined the need for the British royal family to modernize, and Prince Andrew's transformation into a trade envoy seems part of that process.

His role involves helping small British businesses make the right contacts, meeting influential trade partners, sometimes lobbying on specific contracts and selling the merits of his country as a location for investment. Britain, he says, is "probably the most open free market economy in the world." That is a message he will carry to Florida, California, Georgia and New York.

Since he does not close deals, it is difficult to quantify the value of his work. But Sir Digby Jones, the British minister for trade promotion who will accompany him, describes the prince as very effective.

"He gets in to see people because he is the son of the queen. The U.K. would be foolish not to use this."

Ironically, it falls to a member of the royal family to dispel the image of Britain as an old-fashioned, class-ridden, society. British businesses are, Prince Andrew says, "a good deal more discreet - they're not as brash as perhaps U.S. companies are - so you might not see the outward vestiges of entrepreneurialism that is actually going on here."

IRAQI CLERIC MAY NOT EXTEND CEASE-FIRE FOR MILITIA. Salah al-Ubaydi, a spokesman for Shi'ite cleric Muqtada al-Sadr, said that al-Sadr may not extend a self-imposed cease-fire by his militia, the Imam Al-Mahdi Army, Al-Sharqiyah television reported February 4 (see "RFE/RL Newsline," August 27, 2007). According to al-Ubaydi, several prominent leaders in the militia, as well as parliament deputies aligned with the cleric, have called on al-Sadr to end the cease-fire. The leaders pointed to the targeting of militiamen by police in Al-Diwaniyah as one of the reasons for taking up arms again (see "RFE/RL Newsline," November 7, 2007). Al-Ubaydi further claimed that al-Sadr may not make an official announcement regarding the end of the cease-fire. KR