Turn a Profit From Global-Warming Stocks

In solar, my list would include First Solar(FSLR Quote), a leader in making thin-film photovoltaic material, and SunPower(SPWR Quote), which is making good progress in driving down the cost per kilowatt for solar cells because of the silicon manufacturing expertise of its parent Cypress Semiconductor(CY Quote).

Transitional technologies: In the long run, burning natural gas to produce electricity (or to produce the electricity that you need to turn natural gas into hydrogen) still produces too much carbon dioxide to prevent massive climate change from global warming, but it sure packs less of a carbon-dioxide wallop than coal or oil. However, getting the natural gas where it needs to go is a huge job requiring immense capital.

Stocks to watch: ExxonMobil (XOM Quote) has already begun to move its hydrocarbon resource base strongly toward natural gas. It's the most obvious play on this opportunity, even if the company has fought global-warming science tooth and nail.

Unsexy technologies: This stuff doesn't fire folks up the way that talking about the hydrogen economy does, but for the really important decades between now and 2050, figuring out ways to reduce carbon emissions a little bit here and a little bit there will have a much bigger aggregate effect than big ideas that remain stuck in the research labs.

Stocks to watch: I'm talking about a shift from incandescent bulbs to LEDs (light-emitting diodes) from Color Kinetics(CLRK Quote), about using software and centralized control systems from Johnson Controls(JCI Quote) to cut energy use in offices and factories, and about 3M's(MMM Quote) re-engineering everyday materials to cut the energy used in production and to increase recycling potential.

Group 2: Less-Than-Pure Profit

These opportunities will make you a profit, at least over the next few years or so, but they really don't do anything to save the world from global warming.

Technologies likely to get big political bones: I'm talking mainly about so-called clean coal here. It really isn't part of the solution, because coal produces too much carbon dioxide per pound burned for any system of capture-and-storage to work. (Burn a ton of coal to generate electricity, and you get four tons of carbon dioxide.) However, any politician who says this right now is committing suicide: There are too many jobs at stake and too many well-funded lobbyists roaming the halls. It will take years for the technology to prove itself one way or the other, and in the meantime, the effort will be enough to build and support interest in clean coal and carbon-dioxide-storage stocks.

Stocks to watch: Headwaters(HW Quote) and Praxair(PX Quote). The former is the largest provider of technology and chemical reagents to the coal-based synthetic-fuels industry. The latter has announced joint research into improved carbon-dioxide-capture technologies with utility AES Corp.(AES Quote).