Newsletter August 2010
Global Fund Exchange is
an asset management
business specializing in a
diversified global macro
approach to investing in
dynamic opportunities
across all sectors of the
New Energy Revolution.
Featured in this issue:
 Threats to Global Agriculture
 New Chinese Energy Policies
 BP Spill – The Aftermath
 REDD Forest Conservation
 Water Shortage in China
 New Player in Carbon Trade
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SPOTLIGHT ON: AGRICULTURE CRISIS
Extreme Temps & Weather Threaten Global Production
Russia’s major heat wave – the worst in over 130 years – is the latest example of
extreme weather having a significant economic impact on the global agriculture
sector. Droughts and forest fires have caused a wheat crop crisis in Russia, raising
global prices by nearly 70% and prompting President Vladimir Putin to ban wheat
exports entirely.
Similar scenarios are playing out elsewhere in the world. Droughts in Kansas, for
instance, have killed off over 2,000 cattle and flooding in Pakistan has destroyed
thousands of acres of crops.
“Over the whole globe all these changes in climate… are going to cause some real
ripples in our capabilities of producing food,” warned Jerry Hatfield, laboratory
director at the U.S. Department of Agriculture’s Agriculture Research Service.
Estimates from HSBC analysts warn that if countries cannot not adapt to higher
temperatures and more extreme weather, grain production in G20 countries may
fall 8.7% by 2020. With population growth taken into account, HSBC predicts G20
per capita grain production could drop between 11.9% and 16.1% by 2020.
Reduced output could “create havoc” in agricultural markets around the world,
driving up the price of food and other essential goods. There is grave concern that
such price spikes could result in unrest in many poor or resource-scarce countries
similar to the riots that took place during 2007-2008, when global food prices
spiked based on rampant market speculation.
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RENEWABLE ENERGY NEWS Greece to Invest €12 Billion in “Green
Growth” by 2015
With New Energy Policies, China is a Leader
in Global Renewables Sector
S-to-N Transfer Project Source: ChinaEnvironmentalLaw.com
China’s renewable energy industry has skyrocketed in recent
years, and it has now overtaken the United States as the
world’s leading investor in clean energy. The Chinese
government continues to encourage this growth with favorable
policy support.

Renewables

Total renewable power capacity in China reached

226GW in 2009, representing 1/4 of the nation’s total.
The government is calling for a total of 500GW of
renewable power capacity by 2020, or about 1/3 of total
power capacity.
Renewable Portfolio Standards (RPS) for Chinese utilities
requires 8% of all capacity and 3% of power to be
generated from non-hydro renewable sources by 2020.
Revisions to the 2005 Renewable Energy Law will require
increased cooperation between new renewables and the
grid to ensure the generated power is transmitted
efficiently. The revisions also strengthened the Ministry
of Finance’s renewable energy fund, which collects a tax
on all electric power sales.
Wind
Chinese wind power grew thirty-fold between 2005 and
2009. China is now just behind the U.S. in total installed
wind capacity. Its turbine manufacturing industry grew
to be the world’s largest in 4 years. The government has
amended the wind power Feed-in-Tariff law and aims for
150GW of new installations by 2020.
Solar
The “Golden Sun” program, introduced in 2009, will
provide generous subsidies for solar PV installations.
Currently 300 projects have been proposed, totaling
nearly $2.9 billion in investment.
Nuclear
China has expanded its pledge to achieve 15% of all
primary energy from “non-fossil fuel sources” by 2020.
This expanded directive will allow nuclear power to be
included in the total accounting.
Carbon
Greece aims for “green growth” with €12 billion new investment
Greek officials say investing in “green growth” can help
catalyze Greece’s economic growth and attract outside
investment into the nation’s ailing economy. Greece’s
recently announced €12 billion investment plan will include
allocations for new urban improvement projects, natural gas
pipelines and storage facilities in northern Greece. The
government is aiming to attract a total of €22 billion in
external private investment over the coming decade.
Although Greece has ample wind and solar resources,
renewable energy contributed only 4% of the nation’s
electricity generation in 2009. However, Greece has pledged
to ramp up the share of renewable energy to 40% of its total
electrical output by 2020. Environment Minister Tina Birbili
hopes the program will “decisively contribute to face recession
and lead to dynamic economic growth.”
Rare Earth Minerals Lure Clean Tech Firms
to China
“Rare earth” resources such as indium, gallium and lithium are
essential components of many high-tech devices, from battery
technologies to solar cells and wind turbines. China is far and
away the world’s leading rare earth exporter, controlling 95%
of the world’s resources.
Recently, Chinese officials announced their intent to decrease
rare earth shipments by 72%, causing anxiety among global
clean tech firms. However, it will reportedly offer access to
restricted resources to companies that decide to move their
operations to China.

New carbon intensity targets were announced in Dec

ember 2009, which aim to reduce the carbon intensity
of GDP by 40-45% by 2020 relative to 2005 levels.
Energy Efficiency
The 5 Year Plan for 2006-2010 aims to increase energy
efficiency by 20%, including pumps, fans, boilers and the
production of materials like steel and cement.
Many companies are already picking up and moving to the
region because of the attractiveness of low labor costs and
close proximity to Asia’s fast-growing renewables sector.
Many analysts expect this relocation trend to speed up as
clean tech firms gear up for potential limitations on rare earth
exports, many of which are essential to their production.

TRADITIONAL ENERGY NEWS
BP CEO: Gulf of Mexico Spill is a “Wake-Up”
Call for Entire Offshore Drilling Industry
An aerial view of the Deepwater Horizon offshore site
Bob Dudley, the new CEO of BP says the Gulf of Mexico spill
must be a “wake-up call” for the entire offshore drilling industry.
th
BP successfully placed a cap on the leaking well on July 15 and
expect to permanently seal the well by the end of the month.
However, the saga is far from over. Since the rig explosion on
th
April 20 that broke open the deep-sea well, nearly 5 million
barrels of oil have spilled into the Gulf of Mexico, endangering
marine life and resulting in major closures of fishing waters and
tourist beaches along the Gulf coastline. Estimates vary widely
on how much oil remains either as surface sheen, tar balls, or
lurking beneath the water. Scientists warn of continued hazards
to marine life.
So far, BP has spent $6.1 billion dealing with fallout from the
Gulf spill, the worst in United States history. Clean up and other
associated costs may reach as high as $30 billion. BP has
already paid $319 million in compensation to businesses and
individuals that have been affected, and will likely continue to
face high costs as environmental cleanup operations proceed in
the region.
In the wake of the accident, the U.S. House of Representatives
has taken up debate on legislation to reform off-shore drilling
practices, and the U.S. Senate, the SEC and the Department of
Justice have also launched their own investigations. Private
lawsuits against BP have piled up as well. The combined effect
has knocked nearly 40% of BP’s market value.
Although all are relieved that the leak has been capped, retired
Coast Guard Admiral Thad Allen, the U.S. government’s main
representative in the region, expects conclusive clean up of the
region will be both costly and time-consuming, and will require
many more millions, many more years and much more effort
from BP over the long-term.
3
Australian Natural Gas Projects Attract $50
Billion in New Investment from Shell
Royal Dutch Shell Plc, Europe’s largest oil company, is making a
major strategy shift to increase its focus on natural gas. As
part of this transition, Shell is planning nearly $50 billion in
new investment in Australian liquefied natural gas (LNG)
projects.
Investment in LNG projects is being catalyzed by increased
demand for cleaner-burning fuels, especially in Asia, as well
as advancements in technology. By 2012, Ann Pickard,
Chairman of Shell Australia, expects natural gas to contribute
over 50% of Shell’s total production.
PetroChina, which joined with Shell to acquire Arrow Energy
Ltd. and its reserves in Queensland, expects to see continued
“long term” demand for LNG from Australia. “It’s a booming
economy and more and more dirty energy is being replaced
by clean energy. There is a need,” remarked a PetroChina rep.
ENERGY EFFICIENCY NEWS
China Cracks Down on Energy Use, Invests
in Electric Vehicles & Shuts 2,000+ Factories
China is taking serious measures to curb its energy usage and
reduce economic carbon intensity.
Over 2,000 steel mills, cement works and other energy-
intensive factories have been ordered to close down by the
end of September. This announcement comes on the heels of
another order by the powerful National Development and
Reform Commission which forced 22 provinces to halt
provision of discounted electricity to energy-intensive
industries such as aluminum production.
Energy efficiency has become a high priority for China’s
economic planners. China’s current five-year plan targets 20%
less energy usage per unit of economic output this year
compared with 2005.
However, high industry output since last winter has driven
China’s energy consumption to sky-high levels, producing the
single largest surge ever of greenhouse gases by a single
country. According to the International Energy Agency (IEA),
China surpassed the United States last year to become the
world’s largest consumer of energy after becoming top global
carbon emitter in 2006. These rankings, combined with
continued high expectations for economic growth, lead many
to doubt China’s ability to meet its stated energy intensity
goals.
Nevertheless, China is forging ahead with plans to invest $15
billion into energy efficiency. Of this proposed funding, $8
billion would be dedicated for development into pure energy
efficiency techniques. The remainder would be funneled
towards infrastructure construction, potentially including
electric vehicle charging stations. China is currently pushing to
put 4 million eco-friendly vehicles on its roads by 2012.

CARBON NEWS
With Launch of Pilot Trading Program,
China Enters Global Carbon Trade
Seeking to become a player in the global carbon trading
system, China announced it will launch a series of test trading
programs in 2011 with possible implementation of a
mandatory system in the future.
The International Energy Agency (IEA) reports that China has
overtaken the United States as the world’s largest energy
consumer. However, the Chinese government disputes these
IEA figures and claims it is still #2. Regardless, Chinese energy
consumption and domestic power production are expected to
continue to grow strongly. By some estimates, Chinese power
capacity could double to 1,600GW within the decade. This
growth has already had significant impact on carbon
emissions.
Under intense international pressure to control its
skyrocketing emissions, China has focused on increasing
energy efficiency and reducing the carbon intensity of its
economy. No firm details have been released yet, but it is
expected that a commitment to carbon trading will be
incorporated into China’s next Five-Year Plan.
By introducing a carbon price - something United States
lawmakers have thus far been unable to do – China believes it
can ramp up its energy efficiency efforts without limiting
capital flows to its growing renewable and cleantech space.
Higher Economic Activity & Coal Usage Will
Raise U.S. Carbon Emissions in 2010 – EIA
Figures released by the Energy Information Administration
(EIA) indicate that stronger economic activity and use of
traditional energy such as coal and natural gas will lift U.S.
carbon emissions in 2010.
Fossil-fuel related emissions may rise by 3.4%, and emissions
from the industrial and electric power sectors may rise by
3.9%, according to the EIA. Coal-related emissions alone are
on track to rise by 6% this year.
Despite these projected increases, total U.S. carbon emissions
for 2010 and 2011 will still fall below 2008 levels, for that
matter or any year during the period 1999 – 2008.
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WATER NEWS
China Begins Construction of $62B River
Diversion Plan to Supply Industrial Region
Energy regulator says UK needs energy reform Source: Daily Mail
S-to-N Transfer Project Source: ChinaEnvironmentalLaw.com
To combat massive water shortages, China has begun
construction on a $62 billion project which would essentially
re-route the flow of the nation’s largest rivers from southern
river deltas to parched northern regions.
The drought in China’s industrial north is reaching dangerous
levels – the area is home to 44% of the population, but only
14% of the water. As industrial production increases, Chinese
power plants in the north will need 82 million ML of water
each year by 2030. This river diversion project will transport
44.8 million ML of water every year through a complex, three-
pronged plan which encompasses nearly 1800 km of pipelines,
23 pumping stations, up to 7 dams and 2 giant tunnels
beneath the Yellow River. The project will drain one river to
fill another while pumping water against gravity.
Although officials say this project may “ease the water
shortage in the north” in the short term, conservation and
new efficiency measures are the true long-term measures to
solve China’s water woes.
China is not the only nation experiencing firsthand the impact
of limited water supplies on industrial production and energy
generation. According to a special report by IEEE Spectrum
magazine on the water vs. energy supply conundrum, it is
estimated by the year 2030, the Earth’s 8 billion people will
demand 45% more water than today. Annual water shortfall
vs. demand may be as high as 2,700 billion cubic meters.
As evidenced in China, vast quantities of water are needed for
electricity generation. In the United States for example, over
500 billion liters of freshwater travel through power plants
everyday – twice what flows through the Nile River. Thirty-
nine percent of all withdrawn freshwater in the U.S. goes
towards cooling of thermoelectric power plants as they
generate power for consumers.
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CLIMATE POLICY NEWS

U.N. Forest Conservation Plan Moves Forward in Fight
against Deforestation
Reduced Emissions from Deforestation and Degradation (REDD) is a fledgling
program backed by the United Nations designed to save the world’s tropical
forests and reduce deforestation, which contributes between 20-25% of total
global emissions, according to the U.N. The REDD program assed an important
hurdle recently when its carbon accounting system passed the first of two
audits required by the Voluntary Carbon Standard (VCS), a Washington-based
standards group.
One of the few proposals to achieve widespread support at the Copenhagen
The REDD program seeks to limit global deforestation climate talks, REDD encourages developing nations to preserve vulnerable
forest land by awarding conservation measures with carbon offsets which can then be traded on the global market. Projects
approved by the REDD scheme range widely and encompass various plans to protect forests from logging, farmland conversion, fires
and collection of fuel wood and thus reduce carbon emissions.
Many developed nations have lent support to help develop REDD, most notably Norway, which has signed a $1 billion forest
conservation deal with Indonesia. REDD aims to become part of a broader global climate accord in 2013.

SOURCES
We regularly gather information from the following reputable news sources, including but not limited to:
RenewableEnergyWorld.com EnergyandCapital.com
Forbes.com: Energy News New Energy Finance
Green Inc. – The New York Times Streetwise Reports: The Energy Report
New Energy World Network Thomson Reuters
Scientific American: Energy REChargeNews.com
SustainableBusiness.com Climate Change Business Journal
GREENBUZZ WSJ.com: Environmental Capital
New Carbon Finance Carbon Credit Capital

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