The Problem – "Climate Change"
The Stern Review on the Economics of Climate Change (Stern Review) reported in 2006 that human-induced climate change is a serious global threat and demands an urgent global response. Scientists globally have echoed these sentiments. The Stern Review stated that hundreds of millions of people would be adversely affected by climate change.
The Solution – "Prompt and Strong Action"
The Stern review concluded that the most effective method to reduce the emission of GHGs was an emissions trading scheme that operated under a cap and trade model. This involves Government setting a legally binding cap on the amount of CO2 emissions produced by selected industry participants. These participants would have the ability to trade their excess emission allocations. As national emissions markets develop, the hope is to gradually integrate each market with that of neighbouring regions and ultimately the entire world.
Environmental commodities markets are becoming established in Australia and internationally. Both major Australian political parties have committed to having a federal carbon trading system in place by 2011. Significant market opportunities exist for specialised operators.
Green Invest is a leading Australian environmental services and commodities trading company with an expanding portfolio of integrated businesses in the emerging environmental services and commodities industries. Initially comprising of Nextgen and Green Plumbers, Green Invest is a profitable company at the forefront of the emerging Australian environmental industry, with strong future growth prospects.
Green Invest has an ‘early-mover’ advantage in the rapidly growing Australian environmental commodity market. Nextgen is currently a market leader in environmental commodities broking and Green Plumbers is a market leader in the installation of water saving and energy efficiency plumbing products.
Business plans are in place for the organic growth of existing businesses. Green Invest also has a mandate to execute complementary acquisitions with an option to acquire patented renewable energy technology
Green Invest is a Pooled Development Fund offering investors income tax free dividends. Further, any capital gains are Capital Gains Tax exempt.
The New Carbon Industry – A New Asset Class
The emergence of emissions trading schemes throughout the world has created a new asset class – environmental commodities. These are tradeable instruments derived from government regulatory systems for specified emissions, whether in practical application today, or under design.
The main types of instruments are Carbon Credits each represeting a reduction of atmospheric CO2 and Renewable Energy Certificates (RECs) created by generating electricity from mandated renewable sources (solar, wind, hydro etc)
According to the World Bank’s “State and Trends of the Carbon Market 2007” May 2007 report, the global carbon market was worth US$30 billion in 2006, three times greater than the previous year. Included in this was the NSW emissions market, which was valued at US$225 million in 2006. In addition, over 11 million RECs were traded in Australia during 2006, with an estimated market value of $350 million1.
1Assuming an average price of $31.50 per REC, which is based on the midpoint between the Office of Renewable Energy’s identified trading range of $23 to $40 in the market.