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The election of Barack Obama to the US presidency marks a significant milestone for green investment. In the short time Mr Obama has been in office, there has already been a substantial shift in US federal government policy on climate change.

This has involved an estimated $75bn (£47bn) in green stimulus measures as part of the American Recovery and Reinvestment Act. The money pledged by this bill will be allocated over the next 10 years, with a sizeable portion expected to be placed within two years.

There have also been steps made towards national renewable energy targets and potential caps on carbon dioxide emissions. The draft climate change bill, which proposes carbon emission cuts of 80 per cent by 2050, was recently passed by the House Energy and Commerce committee US – an important step before being voted on in Congress later this year.

Meanwhile, the Environmental Protection Agency has labelled carbon dioxide a health hazard, a move widely understood as a precursor to a national carbon emissions policy.

For businesses at the forefront of the transition to a low carbon economy, the so-called 'Obama effect' looks very positive, particularly at a time when capital markets have been frozen in the worst banking crisis in a generation.

But there are several questions about which sectors and businesses are set to benefit. Equally, investors are keen to understand which areas might be left behind.

A particular focus of the US green stimulus package has been renewable energy across a number of sectors, as well as low carbon energy production. The renewable energy sector - including solar, wind, hydropower, geothermal and bio-energy - will receive $32bn in the next 10 years, with some $11bn of this being spent in the next two. This includes extending the tax credit system to allow developers of wind and solar projects to receive an immediate 30 per cent grant of the total cost of the project from the Treasury department in advance of completion.

Some $13.6bn has been pledged to update the national electricity grid to accommodate renewable energy and to introduce smart metering to improve grid efficiency. As part of this plan, the Smart Grid Investment Grant programme has been increased from $20m to $200m per grant. This should benefit companies such as Itron, which makes radio and telephone-based automatic metre reading systems, which enable utilities to respond to demand for electricity, gas and water more efficiently.

The geothermal leader Ormat, as well as the European wind companies Vestas and Gamesa, which have significant exposure to the US renewable energy market, are expected to benefit from this measure. As capital markets improve, tax grants for renewables should also attract increased private investment.

The green transport sector will receive about $5.1bn in investment and tax incentives to improve efficiency. This should increase the use of fuel efficient and alternative fuel cars, as well as provide funds for the development of electric vehicle technology. A national fuel efficiency policy is also being introduced to tighten efficiency and emission standards across all vehicles.

One business that has the potential to benefit from this spending is Ricardo. The company is involved in the research and development of low emission technologies, an area that is expected to receive an investment boost in spite of auto sales falling in the downturn, as US car manufacturers place much greater emphasis on fuel efficient vehicles.

Finally, $24bn has been earmarked for the energy efficiency of buildings. This will involve a combination of grants and tax credits to encourage greater efficiency in homes and commercial buildings. According to research conducted by HSBC, the US building efficiency sector is still in its infancy, and this stimulus package is about 10 times its total market cap. Environmental consultancies and companies supplying green building materials should benefit.

Mr Obama’s green stimulus package has not satisfied everyone, however. Several waste management companies are lobbying the government for energy grants and tax breaks, particularly for energy-from-waste (EfW) projects. EfW involves using methane captured from landfill sites, as well as incinerating waste, to drive turbines and produce electricity.

While EfW is considered by governments in Europe and China as an important way to help reduce dependence on coal-generated power, the US government’s focus on areas such as wind and solar speaks of its agenda to revive the economy through job creation. The wind and solar sectors are highly labour-intensive. It is estimated that incentives in the solar sector alone will create as many as 110,000 jobs over the next two years.

From an investment perspective, there are other factors to take into account. For a start, the link between green stimulus measures and corporate profits is not seamless. It is still unknown who exactly will benefit from investment and tax incentives, or when.

Many of these stimulus measures taper off sharply after 2010. The US government is, in effect, betting the economy and capital markets will have recovered enough by then to sustain the kind of growth kick-started by this stimulus. Investors who focus purely on the stimulus measures are betting the same way. It is important, therefore, to remain focused on the long-term prospects for green businesses and investment themes, not just the short-term boost these measures will provide.

Outside the US, the Obama effect is proving very positive for green investors. In recent months, investors have seen the introduction elsewhere of stringent environmental policies and green stimulus packages that may not have emerged had the US government prolonged its resistance to climate change policy.

Total global green stimulus is now estimated to be around $470bn. China in particular stands out in its commitment to green projects. It plans to invest around 34 per cent of its $586bn economic stimulus package on improving its transport system, updating its electricity grid and boosting water and waste services.

Mr Obama’s green policies and his commitment to low-carbon initiatives are also providing a positive backdrop for new opportunities for the global trade in green products and services. In a recent speech to mark Earth Day, he said: “The nation that leads the world in creating new sources of clean energy will be the nation that leads the 21st century global economy. America can be that nation. America must be that nation.” This speaks of the importance of clean energy in his economic thinking.

The speed at which Mr Obama is introducing incentives to decarbonise the economy is very positive. However, it is vital to remain mindful of the timing associated with the allocation of stimulus funds and focus on the longer-term opportunities.

Importantly, the UN climate change conference in Copenhagen in December is shaping up to be a bellwether for the long-term legislative and financial environment for climate change investments. A robust agreement in Copenhagen would provide the best indication yet of the depth of the Obama effect on the global green investment thesis.

Charlie Thomas is fund manager at the Jupiter Ecology fund