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Forest carbon offsets a sensible option
23/04/2010
According to the US Department of Energy, demand in the US alone for forest carbon offsets could increase 100-fold by 2020.
Experts point out that although the global carbon market increased to $136 billion in 2009, with 8.3 billion tons of carbon dioxide traded, less than 0.1 per cent of this trade was based on taking existing carbon dioxide out of our atmosphere using photosynthesis.
Therefore, analysts warn that while it is crucial to develop a low-carbon economy, it is also fundamentally important to take steps to remove existing CO2 from the atmosphere. This is the key when attempting to mitigate climate change issues.
Experts in the field claim forest carbon projects have a number of unique factors that make investment very attractive for companies– and by forest carbon projects we mean planting trees, improving existing harvesting techniques or protecting forests against deforestation.
Investors can place debt and equity investments in forest carbon offset firms and can also invest in spot and forward transactions of the mtCO2e created by these offset projects.
According to Gabriel Thoumi, a consultant and lecturer on impact investing and forest carbon business strategy at the University of Michigan's Ross School of Business, "forest carbon offsets are emerging as a new alternative investment asset class."
Experts point out that although the global carbon market increased to $136 billion in 2009, with 8.3 billion tons of carbon dioxide traded, less than 0.1 per cent of this trade was based on taking existing carbon dioxide out of our atmosphere using photosynthesis.
Therefore, analysts warn that while it is crucial to develop a low-carbon economy, it is also fundamentally important to take steps to remove existing CO2 from the atmosphere. This is the key when attempting to mitigate climate change issues.
Experts in the field claim forest carbon projects have a number of unique factors that make investment very attractive for companies– and by forest carbon projects we mean planting trees, improving existing harvesting techniques or protecting forests against deforestation.
Investors can place debt and equity investments in forest carbon offset firms and can also invest in spot and forward transactions of the mtCO2e created by these offset projects.
According to Gabriel Thoumi, a consultant and lecturer on impact investing and forest carbon business strategy at the University of Michigan's Ross School of Business, "forest carbon offsets are emerging as a new alternative investment asset class."
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