News February 2008

The following are summaries of news stories from the February 2008 print edition of Environmental Finance magazine

EU faces tough deadline on climate package

Industry and environmental groups have warned that the European Commission faces an uphill battle to reach agreement on its comprehensive energy and climate proposals – and failure to do so before the European Parliament is dissolved ahead of elections in June 2009 could see the whole deal unravel.

“We have a real concern that if the package is not sorted out by 2009, there’s a risk that we’ll have to start again with the whole thing,” said John Scowcroft, head of the sustainable development unit at Eurelectric, the federation of EU electricity generators. More...  

Commission sets out vision for EU ETS

The European Commission has set out its vision for the evolution of the EU Emissions Trading Scheme beyond 2012, including significant reforms to harmonise its operation across Europe.

But it has also proposed limiting the use of carbon credits from outside the EU, if agreement is not reached on a new international climate agreement, threatening to chill the market for Clean Development Mechanism projects. More...  

Europe eyes limited renewables trading

The European Commission has set out country-by-country targets for renewable energy and opened the door to limited certificate trading between member states, as part of its energy and climate change proposals.

Each member state has been allocated a binding target – which, if adopted, would see renewables meet 49% of Sweden’s energy demand, at the top of the scale, and 10% of Malta’s at the bottom. The targets take into account early efforts to boost renewables in some member states and GDP per capita.

Biofuels must cut GHGs – Commission

Biofuels in the EU will have to provide a minimum 35% greenhouse gas saving over fossil fuels for them to count towards a new target for biofuels use, the European Commission has announced.

In its energy and climate change package, unveiled on 23 January, the Commission held fast to its target for biofuels to form 10% of transportation fuels used in the EU by 2020 – despite growing pressure from environmental groups to water down the proposal. More...  

2007 strong year for renewables, clean-tech, carbon

Although investors may be looking nervously to the year ahead, a raft of figures from 2007 show it was a banner year for renewables, clean technology venture investing and trading in the carbon markets.

New investment in clean energy companies and assets hit $117 billion, up 35% on 2006’s $86.5 billion, according to analyst New Energy Finance (NEF). The figure was $20 billion ahead of the company’s predictions, despite tighter conditions in the credit markets in the second half of the year – and NEF is predicting strong growth for 2008. More...  

Nymex, Evolution launch environmental exchange

The New York Mercantile Exchange and US-based brokerage Evolution Markets have teamed up with a number of investment banks to launch an environmental commodities exchange.

The Green Exchange will offer futures, options and swaps for a range of environmental products, including EU Emissions Trading Scheme allowances, Kyoto Protocol certified emission reductions, voluntary emission reductions, US sulphur dioxide and nitrous oxide allowances, and US renewable energy certificates. It is also considering Regional Greenhouse Gas Initiative allowances. More...  

US passes energy bill

A US energy bill signed into law in December will raise vehicle fuel economy standards, and promises a big boost for biofuels, but was stripped of some key renewable energy provisions.

The Energy Independence and Security Act of 2007 will raise fuel economy standards by about 40% to around 35 miles per gallon – the first revision in almost 30 years. It also dramatically increases the target for biofuel use under a new Renewable Fuel Standard, to 9 billion gallons (34 billion litres) of biofuels in 2008, up from the current 2008 mandate of 5.4 billion gallons. The requirement grows to 36 billion gallons by 2022, including 21 billion gallons of “advanced” (non-maize starch) biofuels. More...  

Masdar announces $15bn green investment push

The government of Abu Dhabi is to pump $15 billion into its Masdar Initiative, it announced last month, in an effort to position the emirate as “the global centre for clean energy”.

Masdar is also in “advanced discussions with strategic partners” to launch a successor to its $250 million clean-technology venture capital fund, Ziad Tassabehji, director of innovation and investment, told Environmental Finance. More...  

Catastrophes wreak $75 billion of havoc in ’07

Natural catastrophes caused $75 billion of economic losses in 2007 and killed 15,000 people, according to Munich Re, which blamed climate change for at least part of the damage. Insurers were left with a bill of just under $30 billion.

Although there were no “mega-catastrophes” on the scale of Hurricane Katrina in 2005 or the Boxing Day tsunami of 2004, the absolute number of disasters increased from 850 in 2006 to 950 in 2007, meaning that last year saw the most natural catastrophes since the reinsurer began keeping systematic records in 1974. More...  

Lloyd’s insurers back ForestRe

Four Lloyd’s syndicates are to provide insurance capacity for ForestRe, a company formed to underwrite forestry plantations. The company – which is aimed at the growing volumes of institutional investment moving into forestry – will focus on conventional timber revenues. However, it is also eyeing the environmental benefits provided by the world’s forests, its managing director said.

“Global forest investment is growing by about $9 billion a year,” said chairman and environmental markets pioneer John Forgach.“With Lloyd’s syndicates, we can provide new insurance capacity to protect these investors from risk of fire and other perils.” More...  

WeatherBill pays out on Canadian snow deal

Online weather risk management service WeatherBill has paid for thousands of holidays booked by customers of Canadian tour operator itravel2000.com after an unusually heavy fall of snow in Montreal triggered a weather deal signed last year.

More than five inches of snow fell on Montreal on 1 January, meaning that itravel2000 customers located in Quebec qualified to have their holiday bill refunded, under the terms of a promotional offer launched last summer (see Environmental Finance, July– August 2007, page 14). The three other locations cited in the deal – Calgary,Toronto and Halifax – escaped the huge snowfall. More...

China launches first environmental stock index

China’s Shenzhen Stock Exchange and stateowned TEDA Holding Company have jointly launched China’s first environmental and social responsibility stock index, on 2 January.

The TEDA Environmental Protection Index is listed alongside other indexes on the Shenzhen Stock Exchange. It is composed of 40 “A-list” companies listed on the exchange, across 10 industries, which are deemed to be leaders in terms of environmental or social performance. More...

go to Features February 2008