Carbon will be the world's biggest commodity market

The Future Of Carbon Credits - By: Tom Aikins


Although the current investment climate for carbon credits is a bright one, the future could hold even more promise – in a very big way. As of now most of the industrialized countries in the world are working under some sort of carbon tax system as prescribed by the Kyoto protocols. However, the world’s three biggest polluters are not: India, China and the U.S. When these countries sign on to the protocols then the market should explode. What are the chances of this happening in the near future? It’s hard to say but it depends, as you may have guessed, on politics.
Politics in the U.S. to start, but also in China. First, though, U.S. President Obama has to make clear what he intends to do this year, if anything, on his carbon credit – or as it’s called in the U.S., cap and trade – policy. He started the year with a very positive agenda and seemed committed to making progress. However, since June his direction and resolve have seemed rather vague. And with the mid-term elections looming in November the situation becomes even more complicated. Republicans look poised to regain a majority of seat in the House of Representatives and also gain in the Senate. This could make passage of any kind of cap and trade legislation difficult because Republicans tend to favor big business and big business figures that cap and trade will cost them money.
So the direction forward in the U.S. will most likely be uncertain until after November 2. And even then it may take a considerable amount of time to get any legislation passed. But if laws mandating carbon offsetting ever do take place in the U.S. the effect on the carbon market will be immense. First, the U.S. itself is a huge market and the demand for certified carbon offset projects will skyrocket.
Secondly, there will be a knock-on effect in regard to China and India. Up until now, justifiably so, China and India have resisted signing on to Kyoto because of the U.S. refusal to do so. If the U.S . agrees, however, then there will be pressure on China and India to follow and it probably won’t take long for them to do so.
And in China’s case there is additional incentive because China is positioning itself as the world leader in green energy technology. It would be very difficult for China to continue on that path without at the same time ratifying the Kyoto protocols. Their rapidly developing stature in this field would be greatly enhanced by their ratification of Kyoto and their participation in some form of carbon emission control. The addition of China would also greatly increase demand as would India’s participation.
So what does the future hold for the global carbon offset market? It all may boil down ultimately to an election that will take place in the U.S. in about six weeks. Then again, it may not. Obama may not have the political capital or will to force through his carbon cap and trade policy even if the Democrats maintain their present level of control in the government.
His primary concern is the American joblessness problem and the economy as a whole so carbon may take a back seat no matter who wins in November. Until then, though, it’s anybody’s guess as to what may happen. Watch for an update after November.

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Green Investing With Carbon Offsets - By: Tom Aikins


I’ve written articles previously about the future of green investing and this is another in the series that will shed some more light on this little-understood field. I’m concentrating in this article on carbon offsets and why they look to be one of the biggest investment opportunities for some time.
There are two types of carbon emission reduction markets right now: the voluntary and the mandatory markets. The mandatory market is much larger and exists in countries that are following the Kyoto Protocol guidelines on carbon emission reduction into the atmosphere. The smaller market is the voluntary market which exists in countries like China, Australia and the U.S. It’s this market that is the interesting one from an investment standpoint.
The reason is that if, and it still is a bit of an “if,” the U.S. and China in particular adopt the Kyoto guidelines then the market for carbon offsets is going to increase at an incredible rate since China and the U.S. are the two biggest polluters in the world. And since there are now a fixed number of carbon reduction projects available in the world then the demand will quickly outstrip the supply leading to higher prices. Possibly much higher prices.
That’s why smart investors are investing now in carbon offsets and anticipating this huge rise in prices. There are currently exchanges in the world where these credits can be easily traded so the credits are quite liquid. And you know when the big financial institutions get into the act that it’s time to start paying attention to any investment opportunity.
Many investment banks such as JP Morgan Chase, Morgan Stanley, Barclays and Goldman Sachs have all entered the market place and although I stated above that this whole scenario is based on an “if,” you wouldn’t see these players in the market unless there was a real opportunity. Nearly every investment bank has set up an environmental markets division and there are now a host of funds that are dedicated to the sector. You know when the big boys get interested that there has to be a lot of money involved.
These are just some of the reasons why we think that carbon offsets investing is going to be the most exciting investment opportunity for the next several years and why we are advising anyone to take a closer look at this market. It’s real, it’s growing and now is the time to get involved. There are many more details that any smart investor would want to gather before making an informed decision and in any investment field there are pearls and dogs.
However, taken as a whole this entire sector is poised to really take off soon and when it does the people who are in the right positions stand to make a lot of money. Our analysts are all bullish on the possibilities and I’m sure that after you take a good look at what’s happening you will be too. Good luck with your investment decisions.
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Green Investing In The Future - By: Tom Aikins


Smart investors are always looking for the next best thing to come down the road because they know that the early bird gets the worm. The first people who get into a new investment or whole new field of investing are the ones that are likely to make the most money. This is common knowledge and will probably never change.
There is an investment opportunity right now that falls into the category of “new” even though it’s been around for a while. That’s because it’s been sort of flying under the radar for a number of years and other factors which we’ll discuss. The field of green investing has been around for a while but hasn’t really taken off yet in a big way. Why not? Let’s take a look at some of the reasons.
First, green investing is a big field with many different facets. You could define it to include anything involving alternative energy and any types of conservation projects. In that case you’d have quite a wide field. If you narrow it down a little to only include carbon offsetting and trading you’d still have quite a large market and one that has gone largely unnoticed by the mainstream investment community for most of the last 10 years.
The reasons for this seem to be as follows. First, because carbon offsetting, or cap and trade as it is known in the U.S., has been linked to the global warming controversy, many people have been confused as to whether or not there is actually any credence to the whole basis behind the concept in the first place. Through, mostly, disinformation the elements in the U.S. in particular that have downplayed the human effect on n global warming have created a lot of doubt in many peoples’ minds about the real necessity for any kind of carbon offsetting system in the first place.
This has, of course, created a reluctance on the part of many investors to seriously consider carbon offsetting to be a viable investment opportunity in the first place. After all, the thinking goes, if it may not turn out to be a real problem to begin with, then the whole carbon market could completely collapse. However, the effects of global warming are getting to be too acute to dismiss anymore and the body of science that concludes that greenhouse gases (GHGs) are the cause has become too overwhelming.
Carbon dioxide and other GHGs (such as methane) are causing global warming, something has to be done about it and reducing carbon emissions seems to be the only solution. That said, there will exist a market for the trading of carbon offset credits, as there does now exist, and that market will only get bigger as time goes on and more companies and individuals feel a responsibility to correct the problem.
And you know when some of the biggest banks in the world start to get involved, as they have in recent years by setting up green investment divisions, that things are on the move. Our advice: don’t wait. Start looking into smart carbon-based investments now. Make sure that you’re the early bird this time.
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Carbon Offset Investing, Part 2 - By: Tom Aikins


"Carbon will be the world’s biggest commodity market, and it could become the world’s biggest market over all" - Barclays Capital
The above quote pretty much sums up why I think that carbon offset investing is the hottest thing to look at in the field of investments, green or otherwise. We believe that this commodity will always be valuable and will always keep rising in value because of several important factors. What are these factors?
First, this is a brand new market. You’ve heard of getting in on the ground floor. Well, this industry is very close to that. Expectations for this market are high, and estimates of the potential size of a U.S. cap and trade market (the term used in the U.S. to refer to carbon credits) alone range from $300 billion to $2 trillion in the near future. And it will not stop there. Carbon trading is expected to dwarf the global foreign exchange market soon and forex already dwarfs the global stock market. We’re talking big. And just as importantly this will be a growth market for years to come.
Second, many investment banks such as JP Morgan Chase, Morgan Stanley, Barclays and Goldman Sachs have all entered the market place. Nearly every investment bank has set up an environmental markets division and there are now a host of funds that are dedicated to the sector. You know when the big boys get interested that there has to be a lot of money involved.
And what advantage do carbon credits themselves possess? Unlike other green investments, carbon offsets don’t depend on any particular technology or company to be successful. Carbon offsets themselves are going to increase in value and are already tradable the same as any other commodity or security – stocks, bonds, etc. Why invest in a particular technology or company that may prove to be unsuccessful when you can invest in a commodity that will always have value – carbon offsets.
The hardest thing that you’ll encounter when you attempt to get involved in green investing of any kind, and this goes for carbon offsets too, is the sheer number of projects that are available, the different types of technologies that are being developed and the unsubstantiated claims that many companies are making about their products. It’s not easy to sift through and find the right projects for investment.
So what should you do? We suggest you do some basic research about carbon credit investing. You’ll get plenty of information if you Google “carbon registry websites.” These are sites that are generally run by organizations that monitor the market and provide carbon offset investors with a lace to store the records of their various purchases. These sites also contain lots of basic information about carbon offsets and are an excellent place to start gathering facts.
I hope that this article has helped you to clarify some of the issues involving carbon offset investing and that this will help you to become a successful green investor for your own financial good and the good of the entire planet.

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Carbon Offset Investing, Part 1 - By: Tom Aikins


One of the fastest growing fields of investment these days is green investing. Since everyone is always looking for the next big thing this article will focus on what I think is going to be one of the best investment opportunities to look at in a long time: carbon offset credits.
It can be very confusing and certainly requires a good deal of time to sift through the various information that you can readily collect on the internet in regard to carbon offset investments. Do you have either the time or desire to do this? The question to one or both of these questions is probably no. But if you don’t do research, like you would with any other investment, then you’re taking a gamble. So what do you do? Let’s take a quick look at what the whole field is about.
What are carbon credits? That takes a bit of explaining but we’ll make it brief. Carbon credits are what many companies throughout the world are buying to offset their own carbon emissions. These are companies that are in countries that signed the Kyoto protocol a number of years ago. Countries that did not sign the protocol include the U.S., China and India although the Obama administration does want to require U.S. companies to abide by the protocol’s requirements soon. For now, in the U.S. there are voluntary requirements.
A unit of carbon credit is basically a unit of some type of project that consumes one ton of carbon dioxide most typically, although there are other greenhouse gases which are included, and in doing so creates oxygen. The most common way that this happens in nature is when plants and trees take in carbon dioxide and expel oxygen. So nature does this on its own and there are also a number of ways that man has devised to offset carbon admissions as well.
So what is a simple example of utilizing a carbon credit? You can buy the rights to the oxygen that is emitted by a certain amount of land in a rainforest and use this credit to offset the carbon that your company or even your household is emitting. There are simple ways to calculate the amount of carbon you or your company are responsible for emitting each year and once you calculate the amount you then know how much you have to purchase in the way of carbon credits to make your “carbon footprint” neutral.
How does all this work? This is quite easy, actually. There are many organizations, private and government, that have created many projects around the world that sustain rain forests and other natural areas that create oxygen and consume carbon dioxide. For the most part these projects are regulated by a number of organizations including the World Bank and various carbon exchanges. Do not deal with any project that is not regulated and/or endorsed by a respected international organization.
So all you have to do is purchase carbon credits from a regulated and approved project and your company or household can then become carbon neutral. You have paid to help control global warming and the general welfare of the planet on a very basic level. In many countries this is mandatory but in the countries mentioned above it is not. Still, even in these countries, many individuals and companies are purchasing carbon credits – companies, to proclaim their commitment to helping the environment, among other things, and individuals out of a sense of responsibility to help the environment. What is in the process of being created, therefore, is a huge market for carbon credit purchasing and trading.
And if there is a trading market there is a way to make money. Ever heard of ”buy low, sell high.” In the second part of this article we’ll talk more specifically about why this market is taking off and who some of the major players are.
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