From Markets With Love

The carbon super market may just get another goodie

At the Carbon Expo, carbon traders are discussing the launch of the Green Bond or International Carbon Bond.
Like the Clean Development Mechanism (CDM)  that pays developing countries to reduce GHG emissions , the Green Bond will do just the same.

To the uninitiated, the CDM is the principal tool for engaging with developing countries on mitigation policy. This allows developed country governments and companies to meet emissions reduction targets in part by purchasing certified emissions reduction credits (CERs) which they receive in return for financing projects in developing countries which reduce emissions. This is also known as “offsetting”.

India and China are the leading countries in CDM projects but recently China has over taken India. While India entered the CDM market in 2003, the size of projects is small – largely driven by  mid-sized companies. However this could change, should some of the Indian Public Sector Units chose to enter the carbon markets.

 Like some  bonds, including Daniel Craig, this is also hot .And here is why.
                                   

Unlike the CDM process where there is a lengthy review process, with the Green Bond, the money is paid up front by investors and the returns guaranteed to the investor. The Investor then would be free to trade the bonds in international market. And governments will earmark funds exclusively for carbon abatement programmes.


And here is the sweet spot.It would be like a sovereign debt.So if the project fails and there is no reduction in emissions,the investor is protected as the bond is backed by the World Bank or some such financial institution.


So if you want to make some quick bucks, watch this space and keep in touch with your investment banker - he is very likely to sell you the bond and not the sun.

 

Of banana peels and popcorn

About two weeks ago, I met Peo and Satoko Ekberg.

Peo is from Sweden - a country that is fueling ahead to be the world's first oil-free country by 2020.This is without increasing its nuclear energy capabilities.I would call this ambition, to a point of being far fetched.,but Sweden seems to be on its way. From 70% energy from oil in 1975, today only 30% of its energy comes from oil.

So are the 9 million Swedes committed to this idea. Is it really possible to break the oil dependency and still run a first world country efficiently? From what Peo tells me, yes.

 Buses run on banana peels and kitchen waste, elevators are solar powered, taxis ferry you on coffee wastes collected from coffee shops. The capital, Stockholm, has reduced its household wastes by 97% - a big part of the garbage is  recycled into energy to power homes and transport. Public  transport in Stockholm now runs  a 100 % on bio-energy. The list goes on.

So I asked Peo, what does the city smell like with all this garbage in buses, taxis and cars?  "Oh ! Fresh popcorn".

So next time you get a whiff of fresh pop corn, remind yourself that you may not be  in a cinema house  having your favourite  popcorn,  but you are probably in Sweden, on a bus, going to  watch Bergman’s “Autumn Sonata”

Here Comes Christiana

About 24 hours ago, Christiana Figueres was named the new Executive Secretary of the United Nations Climate Change Secretariat.


In my mind this could have been breaking news.

Christiana is from Costa Rica, a developing country, and is a woman. A great combo. And if you did not know, Costa Rica is well on its way to becoming the first carbon neutral country by 2020. We finally have a woman who will head a traditional old boys club. So there. She is not your usual suspect in the least. She has the perfect CV to qualify for the job and having been around and part of the international negotiations since 1995 she knows the climate politics machinery all too well. She is a well recognised International leader on strategies to address global climate change .Nothing really could have denied her the job .

There is hope by the South that she will from time to time where the hat of the LDCs, the OASIS, the developing countries .Something that her predecessor was accused of not doing enough of. The voice of the most vulnerable will at last be heard and there will be action!

But this is what I am thinking.

Carbon trading, Clean Development Mechanisms, REDD,REDD Plus, Carbon Tax, Kyoto Protocol, COP 15 and even COP16 ,Bali Action Plan, Emission trading, Carbon pricing, will not solve the problem . And sadly neither will Christiana.