Finance houses back auctions of carbon permits | WWF

Finance houses back auctions of carbon permits

Posted on 15 September 2008
The Kyoto Protocol is the world's only international agreement to reduce CO2 emissions, the main greenhouse gas responsible for climate change and global warming.
© WWF / Tanya Petersen
Brussels, Belgium - Auctioning of emissions allowances is needed to provide a clear signal for investors and shareholders looking to secure future investments in an increasingly carbon-constrained world, a group of leading financiers told a virtual - and virtually emission-free - conference today.

BOS Bank (Poland), CA Chevreux (France), Climate Change Capital (UK) and Natixis E&I (France) acknowledge at a WWF round-table conference that auctioning permits allocated under the EU Emissions Trading Scheme - the world’s largest - was the most effective way to include climate costs in company balance sheets and have them into account in investment decisions.

“Auctioning emission allowances will ensure that the cost of carbon is recycled into the economy and not just directed to utility shareholders”, explains Adrien Assous, Carbon Chief Economist of Natixis E&I.

Therefore the EU climate package, currently under discussion, is a very important step forward in providing a clear sign post as to where business should be heading in the future.

Rupert Edwards, managing director, carbon finance of Climate Change Capital says: “This autumn, European policy-makers face a major credibility test on climate change. Lack of ambition would be the kiss of death to an exciting new business sector, undermining the potential for both technological innovation and long-term employment opportunities within Europe. The low carbon economy is in sight, but private investors need strong, long-term regulatory signals.”

“WWF's discussions with the financial sector consistently show that addressing the problem of climate change is in our economic interests,” said Keith Allott, WWF UK’s Head of Climate Change.

“Forward-thinking financiers recognise the risks for failing to take action and the opportunities that a new, low-carbon world presents.”

Allot said the EU needed to recall some basic economics in strengthening its climate package and providing the regulatory framework to tackle climate change and direct future investments.

“For years auctioning in capital markets and exchanges has been applied as the economically most suitable and least distorting allocation process,” Allott said.

“It makes those activities transparent and prevents secret agreements of market participants; it will not only be in the interest of the world’s climate but also of the clients and shareholders of European companies.”

The round table discussion was hosted by the World Wide Fund for Nature (WWF) and WWF Climate Savers member Hewlett Packard, using high-tech video-conferencing technology.

Notes to the editors:
• Climate Change Capital is a leading investment banking group and fund management business specialising in the investment opportunities created by the low carbon economy. It advises and invests in companies who recognise that combating global warming is both a necessity and an economic opportunity. Its activities, which also include investment management and financing emission reductions, aim to make the world's environment cleaner while delivering attractive financial returns.
• Natixis E&I is an alternative asset management firm and a subsidiary of the investment bank Natixis. The firm manages the European Carbon Fund and the newly launched European Kyoto Fund, as well as other funds specialised in infrastructure and renewable energy investment.

For further information:
Keith Allott, Head of the Climate Change Unit at WWF-UK
Mobile: +44 790 988 3002
E-mail: kallott@wwf.org.uk

Claudia Delpero, Communications Manager at WWF European Policy Office
Tel: +32 2 740 09 25
E-mail: cdelpero@wwfepo.org
The Kyoto Protocol is the world's only international agreement to reduce CO2 emissions, the main greenhouse gas responsible for climate change and global warming.
© WWF / Tanya Petersen Enlarge

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