HSBC questions the future of carbon trading

by Search Gate staff. Published Mon 29 Mar 2010 21:11
Carbon trading has dropped by more than a quarter

Following a disappointing Copenhagen summit, where no legally binding treaty on carbon emissions was delivered, the Climate Change sector has underperformed Global Equities according to the latest quarterly review of the HSBC Global Climate Change Index.

The lack of a global agreement on emissions reduction has led its authors to question the validity of Carbon Trading as an investable theme.

Despite a failure to deliver an ambitious legally binding agreement at Copenhagen, regional and country specific policies are shaping the pace and nature of investments, leading to pockets of both over and under performance in the Climate Change space.

Among the winners is the Energy Efficiency & Energy Management sector to which governments have pledged over 50% of global climate stimulus.

Joaquim de Lima, Global Head of Quant Research for Equities at HSBC, commented: “This is an area many countries wish to take a lead in and as a ‘no - regret’ option Energy Efficiency & Energy Management represents a win-win situation for everyone.

“It is one of the most effective means by which countries can protect and make the best use of resources while also representing the cheapest and fastest way to cut greenhouse gas emissions”.

The major loser has been the expected growth in Carbon Trading. Vijay Sumon, an index specialist at HSBC Global Research said: "A global agreement with specific hard targets would have allowed the carbon market to thrive; with none in place the general downward trend of carbon trading seen last year has accelerated. Post Copenhagen it has fallen over 28%".

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Comments about HSBC questions the future of carbon trading

Is carbon trading a viable option for private investors and if so do UK based banks get involved in dealing with such individuals in this ma
Ed Gaskill, UK around 3 years, 4 months ago

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