Features, December 1999/January 2000 WEATHER FORECASTING THE APPLIANCE OF SCIENCE Researchers at University College London have pushed the envelope of long-range weather forecasting out to 12 months - and as scientists better understand climate and the atmosphere, further advances are sure to follow. Sumit Paul-Choudhury finds out why the insurance industry is funding this research, and paying close attention to the results. More... EMISSIONS TRADING CO2 PERMITS PREPARE FOR TAKE OFF As big-emitting sectors, such as the oil and gas industry and power utilities, begin to get to grips with emissions reductions and trading, the aviation industry will account for a growing percentage of greenhouse gas emissions. Some of the more forward-looking managers are beginning to consider how the aviation industry can play its part. Graham Cooper reports. More... WEATHER DERIVATIVES INSURERS PLAY NEW WEATHER GAMES The search for liquidity remains a preoccupation of US weather derivatives dealers. Signs are that the insurance sector is increasingly trading its exposures, rather than simply buying and holding positions. And Mark Nicholls finds some insurers looking to hedge weather, as well as taking on clients' risk. HOW I SEE IT SEEING THE WOOD FOR THE TREES The role of carbon sequestration in mitigating climate change is one of the more ill-defined aspects of the Kyoto Protocol. But Richard Sandor argues that there are good reasons why forestry will be a vital element in countries' efforts to meet their Kyoto commitments - and that now is the time to undertake pilot schemes. ECO RATING CITY WELCOMES NEW RISK RATING SERM, a UK environmental risk rating agency, has rolled out its rating methodology to more than 100 UK companies. Mark Nicholls analyses SERM's approach, and finds that fund managers welcome this new risk measurement tool. But other eco-rating companies have reservations about SERM's methods of analysis. MARKET VIEW TRADING NOx IN THE NORTH-EAST USA Dan Chartier, treasurer of the Emissions Marketing Association, and emissions marketing manager at PG&E Generating, examines the difficult question of controlling ozone in the North-east USA. ACID RAIN CONFUSION REIGNS AS SO2 MARKET EXPANDS The US Environmental Protection Agency has brought a slew of lawsuits against a number of utility companies for violations of the Clean Air Act. Graham Cooper reports on the subsequent collapse of prices of SO2 permits, and an increase in price volatility. OPINION BY JOHN GUMMER CUTTING THE COST OF DOING GOOD The UK's ex-environment minister says that financial markets are powerful tools for bringing about positive environmental ends. While banks and insurance companies are paying close attention to the environmental performance of their clients, pension funds are lagging behind. RECYLING MUDDLED MARKET RECYCLES CONFUSION The use of economic instruments to deal with environmental problems has an increasingly impressive pedigree. But Mark Nicholls ask whether a UK market in 'recycling notes' is a market too far, as users complain of complex and cumbersome regulations. CAPITAL MARKETS WAKING THE MARKET TO ENVIRONMENTAL RISK Investors are not sufficiently considering environmental issues in their investment decisions, says Forum for the Future's Marta Suranyi. She explains why this is the case, and what must be done to change investor's behaviour. FOR THE FULL STORY EVERY MONTH, SUBSCRIBE TO ENVIRONMENTAL FINANCE, OR CONTACT info@environmental-finance.com FOR OUR BACK ISSUES SERVICE