News October 2007

The following are summaries of news stories from the October 2007 print edition of Environmental Finance magazine

Climate meetings set stage for Bali

High-level meetings held by the United Nations and the White House have helped build political will for a new global agreement to tackle climate change, according to observers. But, despite warm words from US President George Bush, the US remains opposed to mandatory limits on greenhouse gas emissions.

At a UN-convened event, held in New York on 24 September, more than 80 heads of states discussed action on climate change – a meeting that many described as “historic” – and focused attention on the forthcoming UN Framework Convention on Climate Change conference in Bali in December, where negotiations are expected to be launched on a framework for a post-2012 agreement on climate change. More...

Merrill Lynch unveils environmental framework

Merrill Lynch has become the latest US investment bank to unveil an environmental strategy. However, unlike several of its peers, it has eschewed environmental investment targets, and campaign group Rainforest Action Network has dismissed its Environmental Sustainability Framework as ‘business as usual’.

President and COO Greg Fleming presented the strategy to bank employees in New York on 17 September. A recording of this was posted on the bank’s website, but the bank chose not to announce the framework with a press release or broader announcement. More...

Virgin steps back from biofuels focus

Richard Branson’s foray into biofuels investment appears to be under pressure, after the company set up by Virgin Group to invest in ‘green fuel’ start-ups has been re-branded.

Virgin Fuels launched only a year ago, with plans to invest up to $400 million of the group’s money. It has already made six investments, all but one in bioethanol and biodiesel companies. More...

VCs strike gold on European clean energy bets

Venture capitalists are set to make annualised returns of 55% on investments in clean energy start-ups in Europe, according to new figures from New Energy Finance.

Michael Liebreich, chairman and CEO of NEF, said:“We have seen a number of good trade exits and subsequent rounds at higher valuations during the past year, although there have not been many eye-catching IPOs [initial public offerings] as in previous periods. The industry has created substantial value. We would expect to see further impressive exits over the coming year as investors lock in their gains.” More...

Climate policies risk market distortions – Lehman

Cost must be placed at the centre of climate change policy if market distortion is to be avoided, said John Llewellyn, London-based senior economic policy adviser for Lehman Brothers, in a report published last month.

The second Business of Climate Change report by the US investment bank suggested low energy light bulbs were a much more cost-effective way of reducing carbon emissions than investment in wind or solar power or the planned European legislation on car emissions. More...

US state wins vehicle emissions battle

Car manufacturers in the US are facing renewed pressure to reduce the greenhouse gas emissions (GHGs) from the vehicles they produce.

On 12 September, a federal judge ruled that the state of Vermont can set limits on GHG emissions from cars and trucks, rejecting arguments from carmakers that regulating emissions is effectively imposing fuel economy rules – a power that only the federal government has. More...

Uranium mining enters FTSE4Good

Rio Tinto has become the first company involved in uranium mining to be included in the FTSE4Good index since restrictions were lifted over a year ago.

All companies that engaged in uranium mining used to be banned from the index of listed firms that meet corporate responsibility standards. But this restriction was lifted in April 2006, when FTSE4Good produced a set of criteria to single out the best performers in the industry More...

China sets out renewables spend

A leading Chinese energy planner announced last month that the country will achieve its ambitious renewable energy targets through $2 trillion yuan ($266 billion) in investment by 2020. While much of the money will come from industry, analysts say it is a sign China is getting serious about its energy goals.

China’s renewable energy law, which requires that 15% of energy be from renewable sources by 2020 – up from the current 8% – took effect in January 2006.The law sets targets of 300 million kilowatts (kW) in hydropower capacity, 30 million kW in wind power and biomass, and 1.8 million kW in solar power generation. The National Development and Reform Commission, which oversees energy policy for China, is starting to make clear how the country will reach those objectives. More...

CDP and Wal-Mart to target supply chain emissions

The Carbon Disclosure Project (CDP) will join with Wal-Mart to reduce greenhouse gas emissions in the giant retailer’s supply chain.

The plan was unveiled on 24 September in New York, when the CDP released its fifth annual report on GHG emissions by the world’s largest publicly-owned companies. The London-based CDP is a collaboration of 315 institutional investors with $41 trillion in assets under management. Each year it asks companies to disclose “investment-relevant” climate change information. More...

‘OECD’ report stokes fear and confusion over biofuels

Forests, wetlands and pastureland are being put at risk by the growing demand for biofuels, while the use of food crops to power the transport system is likely to push up food prices for at least a decade, according to a damning report prepared for the OECD.

“The conclusion must be that the potential of the current technologies of choice – ethanol and biodiesel – to deliver a major contribution to the energy demands of the transport sector without compromising food prices and the environment is very limited,” the report says. More...

Weather deal to save African farmers from famine

Swiss Re has sold a series of weather derivative contracts to protect African farmers from poverty and famine in event of drought ruining their harvest.

Millennium Promise Alliance, a New York-based non-profit organisation whose aim is to end extreme poverty, paid an undisclosed premium to provide up to $2 million of cover to smallholder farmers in three African locations. More...

EU energy package to boost renewables – Commission

Renewable energy developers will benefit from proposals to simplify and make more competitive Europe’s energy market, according to the European Commission.

The Commission adopted plans on 19 September that will subject European energy markets to greater competition and force the main players to separate power generation businesses from their transmission networks. More...

Real estate investor buys up conservation fund

MuniMae Mortgage & Equity has moved into the ecosystems services business, with the acquisition of the Sustainable Land Fund for an undisclosed sum.

The Sustainable Land Fund, which will operate as MMA Sustainable Land Investments, was set up in 2006 to use money from private and institutional investors to buy up land in the US with ‘conservation opportunities’ – such as degraded wetlands and the habitat of endangered species – and exploit a raft of market-based incentives to patch up the damage. More...

go to Features September 2007