EBI

After the demise of Kerry-Graham-Lieberman in the spring and the Republican rout in November, climate legislation has a snowball's chance in Canc¨²n of being passed by 2012. Yet the broader spectrum of drivers that propel business in CCBJ's climate change industry sustained modest 2% growth in 2009 and 2010 and look strong going forward.

In this double edition, CCBJ draws on expertise from scores of analysts and business leaders, as well as third-party research, to show how IT tools are enhancing GHG mitigation strategies and-in the case of the smart grid, intelligent transportation and other segments-essentially creating new industries.

CCBJ analyzes trends for all types of equity finance, from venture capital to sovereign wealth funds, as well as government support programs and the project finance debt that is so critical to clean energy projects. Analysts, financial services consultants and market participants discuss the significance of $185 billion in global stimulus spending and reveal the challenges for the climate change industry to convert investors who are waiting for proof of sustained performance.

Vehicles and fuels add up to well over 80% of CCBJ's estimated $69 billion in U.S. transportation business in the climate change industry in 2009. The segment grew 15% and 16% in 2007 and 2008, respectively, and 2009's 12% decline was largely an effect of declining vehicle and fuel sales in the recession. Growth is expected to return in 2010, although at a modest rate given the slow recovery in vehicle sales, and is forecast at 10-12% annual growth from 2011-2012.

In 2009 the worst recession in decades eviscerated the tax credit appetite of the financial institutions that invest in wind projects. Yet on the strength of the grant-in-lieu of tax credit enacted with the ARRA stimulus bill, the U.S. wind energy capacity grew by 40%, installing a record-breaking 10 GW to end 2009 at 38 GW, 22% of the global total of 158 GW. Canada's wind capacity also grew by 40% and Mexico's fledgling wind power market grew by more than 130%. North America still trailed Asia which expanded capacity 64% in 2009 to total 40 GW. Asia was paced by China that more than doubled capacity to 26 GW.

C&E climate change revenues grew by 15% to reach $4.8 billion in 2009 (excluding construction revenues), and CCBJ's subset of core climate change consulting services saw 17% revenue growth to end the year with $780 million in revenues. Drawing on industry leaders, survey respondents and third-party research, CCBJ projects 20-25% growth in this segment through 2012 in a "conservative" scenario that posits no federal climate change legislation. As first highlighted in our January 2010 Professional Services edition, a formidable array of non-legislative factors are driving the market in the U.S.