the cost of going green , page-7

Polski,
Dr Clive McAlpine released some research last year that correlated the removal of vegetation in the Murray Darling Basin with a 2 degree rise in surface temperatures within the basin. Whilst Peter Andrews has some interesting ideas and has shown some success his "natural sequence farming" is not new and is hard to describe as natural when he a predisposition to use weeds as his plant stock. If I was a neighbour I would be concerned about his activities and the effect of his weed seed bank. In short it could be done with native species that have far greater biodiversity outcomes. But the bloke has got a lot of people thinking and his contribution can not be underestimated.

I reckon the ETS is going to happen in Aus and it will not be long. The challenge for investors will be to pick the winners and understand the risks that each business model exposes investors to. Tree planting for carbon sequestration is fraught with problems from problems with calculations, to price, to delivery to international fungibility, international market process and most of all policy changes. The Carbon Planet model is to develop credits that can be used in a variety of markets either voluntary or mandatory and is focused on developing VCS credits out of PNG and operations in Bangladesh and the middle east. These credits should be usable on the international voluntary market and at this stage look like being utilised in the American compliance market. Carbon Planet also runs a strong and well recognised auditing division which services the other end of the market, working out what your compliance issue is and what you can do to reduce your exposure to increasing energy and carbon prices. This part of the industry has many competitors and is very competitive and fast evolving producing many unique risks. There are also a lot of small businesses operating that will either fold, remain boutique or look to merge, this will also create a lot of opportunities for investors. This is a very exciting market space but also very risky. I am not sure what is driving prices at the moment for groups like CO2 and Carbon Conscience as the rules for forestry are not full sorted, we have no ETS and they face risks that I do not think have been fully flushed out. One such risk is the method the groups use to calculate the carbon return and what the final rules will dictate they have to use. There is currently a big difference between what CO2 say their carbon sequestration rates are and what the government says the returns are, I have a feeling the government will prevail. this may ( and I stress may) mean that the predictions some of these groups are making about their sequestration rates may not live up to expectations. The query I have is who faces the risk, the company (CO2 etc) or their customers, C the management groups may still be paid their management fees etc but those that bought a delivery at a time and certain volume for a determined price may be paying a lot more per tonne. Forestry offers a great opportunity for investors and compliance buyers to get a firm and set price for long term delivery of carbon permits.

I have done thousands of property assessments and very few pay good returns based on government data and modelling when you purchase the property and establish trees.

Look to aggregators like Australian Carbon Traders, large landholders and companies that own and manage land that can provide a whole suit of services.