News September 2008

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

Huge US renewables projects defy credit crunch

Gigantic renewable energy projects are being developed in the US and Canada despite the credit crunch, but the looming expiration of the federal tax credit threatens to derail some projects.

Large-scale wind energy projects proposed recently would dwarf the size of current wind facilities in the US. Denver-based Anschutz Corporation is developing a 2,000MW wind-generation project in Carbon County, Wyoming, and a $3 billion, 3,000MW transmission line to transport wind energy from Wyoming to California, Nevada and Arizona. More...  

Clean-tech listings get done – at a trickle

A handful of clean technology initial public offerings (IPOs) are “getting out the door”, but market observers say investors remain skittish, amid mixed post-IPO performance.

Out of a total of 43 listings on US stock exchanges so far in 2008, five were in the clean-tech segment, according to Renaissance Capital, which runs a ‘green’ IPO index. Last year, 15 clean-tech companies listed, out of a total of 171 IPOs. More...  

Carbon fund assets reach $12.9bn, up 63%

Assets managed by carbon funds have grown to $12.87 billion, up from $7.9 billion one year ago, according to research by Environmental Finance Publications, with 80 private-sector carbon funds, government procurement vehicles and buyers’ pools either operational, raising money or fully invested.

However, growth in the sector – up 33% year-on-year in terms of the number of funds, and 63% in assets under management – is lagging growth in the wider carbon markets. Looming uncertainty over the shape of the global carbon markets after 2012, the effects of the credit crunch, and the success of first-movers in raising investment into this new asset class have all contributed to a slow-down of new capital joining the carbon market. More...

Malua BioBank sells first biodiversity credits

The first credits from a novel biodiversity biobank have been sold, following a $10 million private equity investment and the establishment of what is claimed to be the first registry of its kind to track credit trades.

In mid-August, the Malua Wildlife Habitat Conservation Bank was launched in Sabah, Malaysia, to sell Biodiversity Conservation Certificates, with the proceeds used to protect 34,000 hectares of formerly logged forest and repay investors and the regional government. The bank – financed by the $100 million Eco Products Fund – plans to sell 3.4 million credits. More...  

US renewables industry looks to new energy bill

The latest effort to renew the production tax credit (PTC) for the renewable energy industry stalled in the US Senate on 30 July, when supporters fell short of the 60 votes needed to stop debate. However, an extension to the PTC is to be incorporated into a compromise energy bill likely to be introduced in September.

By a 51:43 vote, the Senate failed to proceed to a vote on the bill, which would extend tax credits for producing electricity from renewable energy sources and provide funding for energy bonds to finance production from certain renewable energy sources. More...  

EU to link to UN emissions trading system in October

A long-delayed connection between the EU and the UN’s two carbon credit tracking systems will be made in October, the European Commission announced last month – providing a much-needed boost to project developers and carbon traders.

The link between the EU’s Community Independent Transaction Log and the UN’s International Transaction Log is crucial for the import of certified emission reductions (CERs) into the EU Emissions Trading Scheme. CERs are credits generated by emission-reducing projects in developing countries under the Kyoto Protocol’s Clean Development Mechanism. More...  

Prince and pension funds join to fight climate change

Ten of the world’s largest public pension funds and the Prince of Wales plan to launch the ‘P8’ initiative on climate change later this year, in time for the next round of climate change negotiations in Poznan.

No details of specific commitments were available at press time in mid-August, but under the aegis of Prince Charles, who helped bring the funds to the table, the P8 initiative will focus on what the pension sector can do to tackle climate change through investment, and will feed the views of institutional investors into the Poznan talks. More...  

Investors favour ‘ESG’ in battle of vocabulary

Environment, social and governance (ESG) has won out in an effort to hack through the thicket of vocabulary surrounding socially responsible or sustainable investment.

AXA Investment Managers in London surveyed more than 350 investment professionals globally before crowning ESG the most popular phrase to describe factors that are not traditionally incorporated in financial decision- making, but nonetheless influence an investment’s performance, such as labour issues or greenhouse gas emissions. More...  

Exchanges vie for US carbon business

Two US exchanges are listing contracts for the country’s first mandatory cap-and-trade programme targeting carbon dioxide emissions, ahead of the inaugural allowance auction on 25 September by six of the 10 states involved.

Both the New York Mercantile Exchange and the Chicago Climate Futures Exchange are listing Regional Greenhouse Gas Initiative allowances from August. More...  

CDM Board looks to tighten rules

The Clean Development Mechanism (CDM) Executive Board is moving to address concerns over the environmental integrity of the Kyoto Protocol mechanism it oversees with an array of reforms and reviews, designed to weed out projects where the emission reductions are not ‘additional’ to business as usual.

The CDM allows developers to earn tradable carbon credits from emission-reducing projects in developing countries. But the mechanism has been plagued by criticism over the past 18 months, including accusations that many of the projects would have gone ahead regardless of the CDM – meaning that so-called ‘non additional’ credits are entering the system. More...  

US cities sign up to carbon disclosure

Dozens of US cities will measure and disclose their greenhouse gas emissions in a new carbon disclosure initiative designed to replicate the benefits similar projects have created in the corporate sector.

In a “first of its kind” project for public entities, the Carbon Disclosure Project and the International Council for Local Environmental Initiatives – Local Governments for Sustainability will help 30 US cities voluntarily report emissions and other climate change-related data. More...  

Wheb Ventures beats $100 million for new fund

Wheb Ventures has bucked tough market conditions to hit a £57 million ($106 million) first close for its second clean technology venture capital fund. The London-based fund manager is aiming for £150 million on subsequent closes, which would make it one of the largest VC funds raised in Europe to invest in early- and growth stage clean-tech companies.

“There’s certainly less liquidity out there, especially from banking groups,” Rob Wylie,a partner at Wheb Ventures, told Environmental Finance. “But we’ve got a good story to tell ...And, from a VC investing point of view, it’s a healthy environment. The credit crunch has taken the froth off valuations.” More...  

go to Features September 2008