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If you had any doubt about the economic potential of the "zero-carbon" economy, consider the case of Saudi Arabia.
I say that because, at a production rate of 10 million gallons per day, the nation ranks as the world's second-largest oil producer, just a bit behind Russia.
Put another way, one out of every 10 barrels of oil consumed in the world each day comes from Saudi Arabia.
And yet the oil-rich kingdom recently announced that it's targeting "net-zero" carbon emissions in its own country by 2060 as part of the effort to lessen the impact of climate change.
I believe there's a lot more going on here than a PR campaign by a leading fossil fuel producer. With nations around the world looking to reduce their carbon footprints, the market for renewable energy will be worth more than $1.9 trillion by 2030, says Allied Market Research.
Today I'm going to reveal a market-crushing investment that lets us profit from clean energy tech across the board...
Buying Your Way to Carbon Neutrality
With how inescapable oil, natural gas, and even coal are, we need something else to get the world to "net zero."
That something is a thriving market for carbon credits. In theory, this is quite simple. Every company that emits carbon into the atmosphere has to buy credits to do so from companies that remove carbon from the atmosphere.
There's precedence here. The 1990 Federal Clean Air Act set up a "cap and trade" system like this for sulfur dioxide. By 2007, sulfur dioxide emissions had dropped by 50% compared to 1980, including carbon dioxide and other greenhouse gases.
There's one fund that is taking incredible advantage of this system, and they're starting to see huge gains. That fund is the KraneShares Global Carbon ETF (NYSEArca: KRBN), and I'm excited to introduce you to it.
KRBN's investment model is simple. As the United States and other countries continue to push for limiting carbon emissions and to promote carbon offsets, the price of carbon credits is set to rise.
The current price for a ton of carbon dioxide, for example, is about $40.52. Meanwhile, estimates from the United Nations, the Bank of England, the White House, and Bloomberg New Energy Finance on what price it would take to achieve net zero carbon range from $100/ton to $147/ton.
Whichever estimate we pick, it's clear that today's price is only going to go up.
Investing in a Green Future
What KRBN does is "go long" on these credits - it buys and holds carbon credit futures, making money as their price goes up. Between September 2014 and this past October, carbon credits have actually outperformed stocks, bonds, commodities, and real estate.
Now, this isn't high tech, strictly speaking. But it does provide vital support for high-tech leaders as we move to more renewables and other forms of clean energy.
Consider that Big Tech is now leading the way in getting to zero carbon as soon as 2030. That means buying carbon credits will become integral for their operations. Already, Microsoft Corp. (NASDAQ: MSFT), Alphabet Inc. (NASDAQ: GOOGL), International Business Machines Corp. (NYSE: IBM), and others buy carbon credits to offset the carbon emissions their operations generate.
You might be tempted to try and get into the carbon market directly, given that it's now worth approximately $6.7 billion dollars. But for the average investor, that's expensive and time-consuming, if it's even possible. Carbon future markets are hard to parse, require special clearances to trade, and you'd need a huge amount of money to get started.
Well-regulated experts, like KRBN, make getting involved in the market accessible to everyone. And it's an incredible buy - its fund is up 77.6%, more than triple the S&P 500's 23.7% return over the period.
It isn't the only player in this space, of course. KraneShares has another fund, the California Carbon Allowance ETF (NYSEArca: KCCA), and iPath has its Series B Carbon ETF (NYSEArca: GRN).
But there are a couple of reasons why I think KRBN is the best choice right now.
First of all, a lot of green ETFs invest broadly in clean energy companies and in limited markets, which makes them more vulnerable to volatility. The KCCA, for example, only deals in California's carbon capture trade, hence the name.
KRBN invests in three major carbon cap and trade programs: the European Union's, California's, and the regional program run by states in New England and the Northeast. And by using a very targeted approach, the fund managers at KRBN have crushed the market so far this year.
Second, even though there are other green funds that are doing well, a lot of them are peaking out. GRN has done a 159% run this past year - impressive, but you have to wonder how much further it can go. KRBN has got a huge tailwind behind it, and carbon credit prices are going to keep rising for years.
So for my money, KRBN is the ideal move to make, and proof positive that investing in our green-tech-filled future can be very profitable.
As we keep looking toward the horizon, we're continuing to unearth new investment opportunities that reflect the changing landscape of our technological world. Long-time readers know that I think cryptocurrency is an unstoppable force - I've been recommending Bitcoin since 2014.
But cryptocurrencies are evolving, as well, and Bitcoin has some new players nipping at its heels. A colleague of mine has identified two new coins, powered by faster technologies, that no investor will want to miss out on. They each have the potential to do 10x Bitcoin's performance in the coming years and leave it in the dust. For all the details on that, go here...
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.