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Sovereign Wealth Funds May Buy Carbon Asset Companies, S&P Says
2010-10-27 10:22:22.906 GMT
By Dinakar Sethuraman
Oct. 27 (Bloomberg) -- Sovereign wealth funds may join
JPMorgan Chase & Co. and Barclays Plc in buying smaller carbon-
asset developers, said Michael Wilkins, managing director of
global carbon markets at Standard & Poor's.
JPMorgan bought EcoSecurities, the carbon-emissions company
for $206 million last year and Barclays Plc acquired Tricorona
AB, a Stockholm-based carbon credit developer, in June.
"Consolidation will continue as the smaller players find
it difficult to be profitable," Wilkins, based in London, said
at the Carbon Asia Forum 2010 in Singapore. "Sovereign funds
are going to be big players."
The market for emission credits may quadruple to as much
$500 billion by 2015 if the offset market is embraced by
emitters including Japan, Australia and the U.S., Wilkins said.
Proposed restrictions on certain types of carbon offsets by
the European Union has thrown the carbon market into a "period
of uncertainty and paralysis," Wilkins said. Investors aren't
willing to take risks beyond 2012 when the Kyoto Protocol ends,
he said.
The European Commission, regulator of the EU market, plans
to publish an "impact assessment" on offset restrictions by
November. The commission is seeking to limit the use of credits
from projects deemed improperly regulated or yielding excessive
profits for developers. It may propose a ban on credits from
hydrofluorocarbon-cutting projects and others that reduce
nitrous oxide gas at industrial plants, according to the
European Commission.
For Related News and Information:
Emissions-trading stories: NI ECREDITS BN <GO>
Emission offset prices: WCER <GO>
--Editors: Jane Lee, Alexander Kwiatkowski
To contact the reporter on this story:
Dinakar Sethuraman in Singapore at +65-6212-1590 or
dinakar@bloomberg.net
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or crussell7@bloomberg.net
