Investment analysts publish free research on climate change

London, 21 December: Investment banks, research institutes and the City of London authority have collaborated to release a public collection of investment research relating to climate change, to help inform investors about the issue.

Investors can browse 25 reports and around 780 pages of free research produced by the London Accord on topics including carbon markets, renewable energy and forestry.

Michael Snyder, the City of London Corporation’s policy and resources chairman, said: “The London Accord project helps unleash the resources of the market to solve the carbon dioxide problem by raising the quality of investment thinking and establishing sign-posts for the general investment community."

Key points from the research are:

• Investors should invest now if they believe carbon markets are here to stay. If prices per tonne of carbon dioxide rise to €30–40, investment portfolios could be constructed that produce both attractive financial and carbon returns.

• Energy investment is going to become much riskier – due to greater
  uncertainty over the pace of technological development, higher and more volatile prices for oil and gas, and uncertainty about the pricing of greenhouse gas emissions.

• Forestry is a big unknown – there is a need to narrow the range of credible estimates for the extent of abatement possible and the real costs of forestry projects which mitigate greenhouse gas emissions, as well as solidifying carbon offset markets for forestry.

• Energy efficiency gains continue to show great potential for financial and carbon returns but behavioural incentives such as regulation are required.

• Carbon capture and storage seems an unrealistic investment at prices for greenhouse gas emission allowances below $45 per tonne (approximately €32/tonne).

The institutions contributing reseach include ABN Amro, Bank Sarasin, Barclays, Canaccord Adams, Cheuvreux, Credit Suisse, Forum for the Future, Herbert Smith, JPMorgan Chase, Merrill Lynch, Morgan Stanley, Société Générale and WestLB.