Last week, Shell UK, a subsidiary of Royal Dutch Shell PLC (NYSE: RDSb ) , became the latest multinational corporation to add its voice to the growing chorus of companies touting the economic opportunity that exists for combating global climate change.
Specifically, the report stated that within the next five years, there is a $1 trillion economic opportunity for developing products and systems to help businesses and consumers comply with regulations designed to cut energy use. Among the opportunities cited were creating materials and equipment to meet stricter building regulations; developing alternative systems for renewable energy generation; and supplying biofuels for transportation.
Skeptics might note that such optimistic projections depend on the imposition of tougher environmental regulations. And, as recent history has demonstrated, there appears to be little stomach in the existing political climate for governmental action in the form of stricter carbon emissions or higher taxes.
This is true, but the tide does appear to be turning. In August, Arnold Schwarzenegger, the Republican governor of California, signed legislation requiring the state to reduce its carbon emissions to 1990 levels by 2025. And in 2005, General Electric (NYSE: GE ) unveiled a plan to voluntarily cut its greenhouse-gas emissions by more than 40% by 2012.
Even more telling, last year, Paul Anderson, the former CEO of Duke Energy (NYSE: DUK ) , called upon the federal government to tax companies based on the amount of "greenhouse gases" they pump into the environment. Furthermore, 40 other companies, including Boeing (NYSE: BA ) , IBM (NYSE: IBM ) , and Whirlpool (NYSE: WHR ) , all publicly endorsed the notion that climate change is real by joining a business council organized by the Pew Center on Global Climate Change.
In and of themselves, none of these moves suggest that action is imminent or that the economic opportunities Shell spelled out in its recent report are guaranteed, but they do hint that a number of companies are warming to the challenge of addressing climate change and that they might be amenable to the federal government taking a more active role in curbing carbon emissions.
Prudent investors, by understanding how Royal Dutch Shell and various other companies' technology and products can help, can also profit by positioning themselves early to take advantage of this emerging market opportunity.
Interested in other environmentally friendly Foolishness? Check out these articles:
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Even though it snowed in his home state of Minnesota last week,Fool contributorJack Uldrichbelieves that climate change is real. He owns stock in GE and IBM. The Fool has a strictdisclosure policy.
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