The Survival Podcast Forum

Finance and Economics => The Money Board => Investing and Saving => Topic started by: iam4liberty on December 28, 2018, 11:40:43 AM

Title: Carbon Credit Price Collapse
Post by: iam4liberty on December 28, 2018, 11:40:43 AM
Buying opportunity or dissapearance of an asset class? Al Gore, who owns one of the companies, pushed Millenials to invest heavily in these: ( Imagine if these lost hundreds of millions were invested in permaculture instead. (
Climate Change Bet Loses Air

Eleven years ago Dharsono Hartono, a former JPMorgan Chase & Co. banker, spotted what he thought was a new way to make a fortune: climate change.

The plan was to snap up rain forest in Borneo, preserve it from logging and sell carbon credits to big polluting companies in the developed world. The earth’s temperature was rising, and this was a way to profit by confronting the problem.

“From an investor perspective, from a real-estate perspective, this is a new asset class,” Mr. Hartono said, describing his thinking at the time.

Investors around the world have poured money into assets like once-frozen farmland in Canada and groundwater basins in California, betting that warming temperatures will raise their value.

Another bet has been on what some investors hope will be the most profitable outcome of a warming climate: government regulation of carbon emissions.
But the carbon windfall never arrived.

Mr. Hartono has sold just 20% of his credits to environmentally conscious corporations voluntarily buying credits, and has lost around $20 million, burning through $5 million to $10 million a year in recent years. Other investors in Indonesia and Latin America who made similar bets, including one backed by Australian bank Macquarie Group , failed to sell credits and abandoned their rain-forest projects.

Graph in article shows total value of market-wide voluntary carbon offset transactions dropped from $800 million to less than $200 million between 2008 to 2016.  It may reach 0 early this year as few remaining companies pull out.
Title: Re: Carbon Credit Price Collapse
Post by: David in MN on December 28, 2018, 04:18:42 PM
I recall the time. Professional investors marveled (I wasn't at the time) that Al Gore was basically creating a currency. And a currency that became worthless once one Chinese smelter said "go f yourself."

Carbon credits, cap and tax, and cap and trade were never anything but schemes to prevent upstart companies. It would make traders rich (and the guy who created them richest) and let legacy business run roughshod over startups. It was ust another barrier to entry. And we all saw it for what it was.