Everyone agrees on the other hand on blaming the banks’ attitude which have by the uncontrolled speculative activities of their investment banking branches torn apart the planet and are therefore devoting themselves to build-up their margins again with their deposit banking branches by bringing their credit margins back-up in a shameless way (spread).
However, let us be cautious not to spread doom and gloom. For the time being in France, although finances, the real estate market and the automobile industry suffered direct hit, other industries have only undergone limited downswings. It is the case for example of the environment sectors and renewable energies which are at this stage little impacted even though the situation is more difficult on some segments (recycling of raw materials for instance) and if the credit restrictions will probably lead to a reduction of the number of projects particularly in the renewable energy sector.
We are obviously part of those who are asking for a green new deal to kick-start the economy on more sustainable bases and with a less short-term logic. This green kick-start cumulates several advantages: create a lot of jobs, it is good for the climate, good for energy independency and can also contribute to the development of disadvantaged developing countries. Nevertheless, it is understandable that when problems are adding up in the short run and that the survival of certain activities is concerned, one tends to forget the long term and the collective interest.
This is why it is necessary that the “enlightened” governments and institutions clearly restate their determination, all the more so since the economic equations change with a barrel at 40$ and public finances into strong deficit.
But all is not lost and far from it: Nicolas Sarkozy just managed to snatch an agreement from the 27 member States. Even though some criticize this agreement because of the concessions granted to the East European countries, it none the less clearly reasserts the “three-time twenty” objective, 20% decrease of CO2 emissions with respect to 2005, 20% of renewable energies in the final energy mix and 20% decrease of final energy consumption, all of that by 2020 which isn’t nothing.
With respect to the renewable energies, the agreements lay out a specific objective for each country which will have to establish the means in order to obtain it. The Poznań[i] Conference is a bit anticlimax but it could not be any other way without the presence of a new American administration, John Kerry having nevertheless affirmed that the United States were ready to come back to the negotiation table.
The president elect Obama, by appointing recently Carol Browner, a close relation of Al Gore, and Steven Chu, Nobel price and devoted defender of renewable energies, to key positions within his administration, has confirmed that he saw in green businesses one of the challenges and a major hope of his mandate in order to kick start the American economy. It is in fact the least the United States can do to try to correct the world disturbances which they have themselves caused!
Thus glimmers of hope remain at the dawn of a year that the media predict to be difficult.
We have opted for, at Demeter, the “reasonable” optimism by preparing ourselves to, if needed, support the companies of our portfolio and to invest under good valuation conditions with our new Fund Demeter 2 which was recently created and continuously grows each day.
Happy holidays to all and may be the year 2009 an ecological one.
