Newspaper article THE JOURNAL RECORD

Environmental Investing

Newspaper article THE JOURNAL RECORD

Environmental Investing

Article excerpt

One term most Americans have grown familiar with is the ``greenhouse effect,'' which is said to have made our summer such a scorcher.

The greenhouse effect is supposed to be due to a hole that's been punched in the earth's atmosphere by the propellant in aerosol cans.

I saw a clever cartoon on the subject in Business Week. It showed two couples lying on a beach, one man saying they'd been vacationing there ever since the summer of '88. The place? Not a tropical island - Alaska.

Well, there's still some question whether or not the heat wave was caused by the greenhouse effect or if it was just a hot summer. But one thing is for certain: We're making an environmental mess of Spaceship Earth, and there are a lot of companies earning handsome profits cleaning up our messes.

Should you be investing in these companies? Well, according Michael Silverstein, it's worth a close look.

You may remember the intrepid Mr. Silverstein, a long-time financial journalist, analyst and commentator, from prior columns. He has worked with The Donoghue Organization on special projects in the past, and now has turned his attention to a very interesting and controversial subject. He has written about environmental investing for Sylvia Porter's Money Magazine, The Independent Investor, Personal Finance and others. Now he has published a new book, ``The Directory of Environmental Investing.''

First, let's define the situation.

Today, there are about five times as many people on this planet than there were in 1900. That means a lot of people are creating waste and pollution. On top of that, there are many industries, making the goods that we want to buy, polluting the environment.

To quote Silverstein: ``The nature of the world economy today is also such that there is an enormous competitive advantage in polluting - at least, in the short run: It is cheaper to produce steel and textiles dirty than to produce them clean; it is cheaper to mine metals and harvest forests dirty than to mine and harvest them clean.''

In addition, Silverstein says there are thousands of pollutants poured daily into the air, the water and the soil. What's more, we don't even know how toxic most of them are.

``Of the 60,000-odd chemicals now commonly used by the world's manufacturers,'' he says, ``toxicity tests have been run on only about 10,000.''

Silverstein says, ``Environmental deterioration will be the most significant force shaping the U.S. economy in the 1990s. Signs of such a trend are increasingly evident.''

He defines six industries that are feeling the effects.

- One is real estate, because of radon and toxic waste dump sites affecting the price and salability of land.

- Petrochemicals, due to leaks and spills, are subject to large damage and liability lawsuits. Many insurance companies now refuse to write pollution liability policies.

- In the agricultural arena, controlling pesticide run-offs is expensive. As toxic pesticides are outlawed, the new organic ones are more expensive. Yields of non-food crops are declining in countries where environmental practices are lax. And acid rain and ozone pollution is damaging certain timber crops.

- Tourism is also affected. People don't want to travel places that are ravaged by pollution. A prime example in the United States this summer was the hospital refuse that ended up on beaches from New Jersey to Massachusetts. …

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