News February 2009

The following are summaries of news stories from the February 2009 print edition of Environmental Finance magazine

Wall Street cautious on Obama’s green new deal

President Barack Obama’s pledges to ramp up clean energy generation in the US, and stimulus packages proposed by the House of Representatives and Senate have provided encouragement to the renewable energy lobby – but investors remain to be convinced that renewable energy stocks will see much short-term benefit.

As part of his plan to rebuild the US economy, Obama has called for a doubling of renewable energy generation in the US over the next three years, and his $825 billion stimulus package contains a raft of spending commitments aimed at improving US energy efficiency and modernising the electricity grid. But investors have been cautious in their embrace of stocks that might be expected to benefit from an environmental boost. More...  

Stimulus packages to direct $432bn to environment

Governments have earmarked $432 billion to boost environmental infrastructure and technologies as they attempt to ward off economic meltdown, according to research from HSBC.

The UK-based bank estimates that as much as 50% of this money will be available in 2009, predominantly for energy efficiency, and research and development, but with substantial sums for waste water and pollution control, and smaller amounts for low-carbon power. More...  

Goldman Sachs launches first ‘sustainability’ fund

Goldman Sachs is marketing its first equity fund that explicitly integrates environmental, social and governance (ESG) research into its investment approach. GS Sustain, which is being marketed to retail and institutional customers in the UK and continental Europe, is designed to invest in companies set to profit from climate change, population growth and natural resource constraints.

However, the investment bank stresses that the fund is distinct from “traditional socially responsible investment funds”, as it focuses on companies’ return on capital, as well as their ESG performance. It is marketing the vehicle as “a mainstream equity fund”, said Nick Phillips, a managing director in Goldman Sachs Asset Management. More...

Catastrophes hit hard in 2008

Natural and man-made catastrophes killed at least 220,000 people in 2008 and caused more than $200 billion in damages, making it one of the worst years on record in economic terms.

Reinsurer Swiss Re estimates total losses at $225 billion for 2008, of which $50 billion was insured. Preliminary figures from rival Munich Re put the losses slightly lower, at around $200 billion, with insurers expected to be hit with a bill for $45 billion. More...  

Mixed outlook for clean-tech VC in ‘09

Clean-tech companies are set to escape a predicted slow-down in venture capital funding in 2009, according to a survey by the US National Venture Capital Association (NVCA).

But the Cleantech Group – a US-based analysis company – is predicting a drop in investments from a record $8.4 billion in 2008 to $7 billion in 2009 as a result of the economic downturn. An overwhelming majority of 92% of venture capitalists surveyed by the NVCA said that 2009 will see a slowing down of venture investments compared with 2008, when the NVCA estimates $29 billion–30 billion was invested, and 61% expect the decline to be greater than 10%. More...  

Collapsing carbon price bodes ill for emissions, CDM

The slump in carbon prices as Europe’s economy cools will delay investment in emission reductions and is threatening Clean Development Mechanism (CDM) projects across the developing world, analysts say.

Prices for allowances in the EU Emissions Trading Scheme (ETS) have fallen heavily since October, as industrial companies have aggressively sold off allowances, either to raise capital, or simply because declining production means they are likely to emit less carbon dioxide. More...  

CAIR reinstatement revives emissions markets

US emission markets were brought back to life after judges agreed to a limited reprieve of the Clean Air Interstate Rule (CAIR). Allowance prices jumped as speculators and utilities entered the market, but bearish fundamentals have since brought them back down to earth.

The DC Court of Appeals on 23 December agreed to keep the rule in place while the Environmental Protection Agency develops an alternative mechanism. The court had previously voiced strong objections and had ordered an immediate end to CAIR, which set limits on emissions of sulphur dioxide and nitrogen oxides across 28 eastern states and the District of Columbia. More...  

USDA office to promote ecosystem markets

The US Department of Agriculture (USDA) has set up an office to streamline information about ecosystems services and foster the growth of these markets.

The agency announced in December it would establish the Office of Ecosystem Services and Markets to help the Secretary of Agriculture develop technical guidelines and science-based methods to assess environmental service benefits. The goal is to promote markets for ecosystem services, including carbon trading to mitigate climate change. More...  

Carbon market volumes up 80%

The carbon market was worth more than $100 billion last year, up more than 80% year-on-year, according to analysts New Carbon Finance (NCF) and Point Carbon.

But the growth rate this year is set to be slower, with London-based NCF predicting that the market’s value will be $150 billion in 2009, up just 27% on 2008. NCF valued the market at $118 billion last year, while Oslo-based Point Carbon estimated that it was worth $125 billion. More...  

Lawyers to launch association for climate change officers

Aprofessional association of senior executives responsible for climate change and energy is to launch in the US.

A founding meeting for the Association of Climate Change Officers took place in Wshington, DC on 12 January, although a full public launch is not expected until January 2010, said Daniel Kreeger, one of the organisation’s founders. More...  

Export credit agencies force Ilisu suspension

The German, Swiss and Austrian export credit agencies have suspended guarantees for the controversial Ilisu dam project in Turkey.

Schweizerische Exportrisik-oversicherung, Oesterreichische Kontrollbank and Euler Hermes Kreditversicherungs issued a joint statement, saying that the project has failed to meet the World Bank’s minimum standards. More...  

go to Features February 2009