Carbon Credits market in turmoil

Monday, 5th April 2010 22:43 - by Resident IFA

I had a visit from the ‘National Sales Manager’ of a Carbon Credit investment company on Thursday last. The lady was personable, enthusiastic, and possessed a foundation level of knowledge in direct relation to her month or thereabouts in the job. I think a polite way to put it is that the company has a way to go in terms of satisfying an IFA’s curiosity. I see my key responsibility to my Clients as to ‘interrogate’ a product (& provider) to the extent of irritation experienced by the poor soul marketing the investment. In other words, treat it as though it is my money. My mind-set aside, the Carbon Credit investment ‘opportunity’ seemed to have quite a few holes in it...most especially the lack of paperwork detailing the key features of the product i.e. total costs, risks to capital, etc. Albeit obviously a growing market borne of social, environmental, and governmental responsibility, it still is an artificially built market that could disappear as quickly as it came. The trading market for Carbon Credits, known as ’Certified Emission Reductions’ (CER), is United Nations-backed, however. Since the aforementioned meeting, a colleague has sent me the article link below, showing the effect of the lack of clear regulation and potential for mishaps/fraud in the fledgling Carbon Credit trading market. This currently manifests itself in the re-cycling or re-using of Carbon Credits – whether by accident or design. For more comment on the CER price slump, open a new Tab and paste... http://www.businessgreen.com/business-green/news/2259761/recycled-carbon-credit-scandal Hmmm...I’ll wait a while longer before recommending this ‘investment’ to my Clients.