First Solar, Inc. (FSLR), General Electric Company (GE), Arch Coal Inc (ACI): Has U.S. Environmental Policy Fallen Behind?

Maybe the most important difference between the U.S. and Europe is a cap-and-trade system that’s been in effect since 2005, covering half of the EU’s CO2 emissions.

The U.S. has done very little of these things, even when the economic benefits are there. It wasn’t until President Obama had leverage over the auto industry that a more stringent fuel-efficiency standard passed. Wind and solar have been losing funding in budget battles for years now, and nuclear is marching forward despite Japan’s disaster.

Movement in the States
What give some people hope is that U.S. policy may be starting to open up. Growth in wind and solar, despite cuts to subsidies, have opened the eyes of politicians on both sides of the aisle. Republican Energy Committee Chair Lisa Murkowski recently released an energy plan that at least softened the tone on cleaner fuel and alternative energy. She focused on energy efficiency and oil independence, suggested cutting subsidies based on energy type, and even offered a modest climate-change policy.

A carbon tax or cap-and-trade system on a national level isn’t imminent, but there’s been movement toward alternatives as a climate-change impact is seen and alternatives become more cost-effective. China’s willingness to implement a carbon tax may do more than anything to push the U.S. to make a similar move.

Investing implications
For investors, there is a range of implications as energy policy changes, both here and around the world. China’s implementation of a carbon tax will be terrible for coal producers such as Arch Coal Inc (NYSE:ACI) and Alpha Natural Resources, Inc. (NYSE:ANR). Both stocks are down about 50% in the past year, and they’re counting on exports to China for growth because the U.S. is increasingly turning to cheap natural gas for electricity.

General Electric Company (NYSE:GE) and Siemens AG (ADR) (NYSE:SI) have opportunities in a variety of industries as energy policy changes. New and more efficient power plants, wind turbines, and smart grid devices are just a few of the products these companies make that will see increased demand.

Finally, alternative energy companies will continue to see increased demand, even if they’re going through some rough times right now. First Solar, Inc. (NASDAQ:FSLR) has maintained profits and grown its footprint in sustainable renewable markets as others have gone bankrupt around it. SunPower Corporation (NASDAQ:SPWR) is another company with exposure to alternative energy that investors can profit from.

Foolish bottom line
In many ways, China has pulled ahead of the U.S. from an environmental policy perspective. That gives us a clue where the rest of the world is headed and may put pressure on U.S. policy as well. Investors don’t want to be on the wrong side of these shifts and should consider if their portfolio is on the right side of these new policies.

The article Has U.S. Environmental Policy Fallen Behind? originally appeared on Fool.com.

Fool contributor Travis Hoium manages an account that owns shares of SunPower. He owns shares of and has options on SunPower. The Motley Fool owns shares of General Electric.

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