Money Hanging from Trees
Psst. Want a hot tip. Buy trees... it's the next hot thing..... Or so says The Sophisticated Investor in Marketwatch.
How so? The evolving market of "carbon trading"
Carbon trading is going to be a $23 billion marketplace in just five years, according to some estimates. That's up from a mere $450 million today.
Trees store carbon dioxide, which offsets the carbon emissions that lead to global warming. The international treaty on climate change, the Kyoto Protocol, invented a system that provides economic incentives for business and countries to reduce their carbon emissions by buying carbon credits as an offset. Those credits are quickly becoming akin to futures contracts......
....CarbonCredEx.com, a "venue for the exchange of carbon credits between emitters, investors and growers" offers land and forests for sale as credit agents on its site. Carbon credit funds are being set up around the globe to amass forests as carbon emission offsets. The World Bank even established its own fund with public and private participants. It was just closed to new investors after being oversubscribed.
There are other ways, such as investments in renewable energy projects in developing nations, to gain carbon credits under the Kyoto Protocol. But carbon storage is the current focus of credit transfer. This is because demand for logging remains strong and carbon emissions remain rampant.
Critics of the carbon-credit transfer system say it's too bureaucratic and complicated. They also complain it allows rich nations to effectively buy their way out of reducing harmful emissions.
The first part is true, hence the investment opportunity to capitalize on the market newness and inefficiency. The second part is nonsense. Emissions aren't geocentric; saving a tree in Patagonia offsets greenhouse gas in Pomona; we have a common roof. The rich paying their way out still reduces carbon effects.
That's why rewarding land conservation may sound like a radical approach to garnering a foothold in the burgeoning carbon-credit trading market. But it isn't. It's a trading incentive.
That said, go buy a tree. You'll be getting in on the ground floor of the world's next big investment opportunity
Is this an income source for land trusts? If it's not now, it appears that it could soon be. For more info, check out the glossary at CarbonCredEx. I have no idea how much money we're talking here, but I assume the more trees and wetlands you have, the more it could be worth.
How so? The evolving market of "carbon trading"
Carbon trading is going to be a $23 billion marketplace in just five years, according to some estimates. That's up from a mere $450 million today.
Trees store carbon dioxide, which offsets the carbon emissions that lead to global warming. The international treaty on climate change, the Kyoto Protocol, invented a system that provides economic incentives for business and countries to reduce their carbon emissions by buying carbon credits as an offset. Those credits are quickly becoming akin to futures contracts......
....CarbonCredEx.com, a "venue for the exchange of carbon credits between emitters, investors and growers" offers land and forests for sale as credit agents on its site. Carbon credit funds are being set up around the globe to amass forests as carbon emission offsets. The World Bank even established its own fund with public and private participants. It was just closed to new investors after being oversubscribed.
There are other ways, such as investments in renewable energy projects in developing nations, to gain carbon credits under the Kyoto Protocol. But carbon storage is the current focus of credit transfer. This is because demand for logging remains strong and carbon emissions remain rampant.
Critics of the carbon-credit transfer system say it's too bureaucratic and complicated. They also complain it allows rich nations to effectively buy their way out of reducing harmful emissions.
The first part is true, hence the investment opportunity to capitalize on the market newness and inefficiency. The second part is nonsense. Emissions aren't geocentric; saving a tree in Patagonia offsets greenhouse gas in Pomona; we have a common roof. The rich paying their way out still reduces carbon effects.
That's why rewarding land conservation may sound like a radical approach to garnering a foothold in the burgeoning carbon-credit trading market. But it isn't. It's a trading incentive.
That said, go buy a tree. You'll be getting in on the ground floor of the world's next big investment opportunity
Is this an income source for land trusts? If it's not now, it appears that it could soon be. For more info, check out the glossary at CarbonCredEx. I have no idea how much money we're talking here, but I assume the more trees and wetlands you have, the more it could be worth.
posted by Pat Burns | 10:24 AM
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