Carbon Fund Assets Up 25 Percent To $16 Billion In 2009

Carbon fund assets have grown by a quarter to $16.1 billion since last year, despite several funds having failed due to the economic downturn, research by Environmental Finance Publications showed on Thursday.

The growth of carbon fund assets has slowed compared to the previous year, when they swelled by 65 percent to $13 billion.

Carbon funds either buy carbon credits to sell for profit to investors, or supply them to emitters which are subject to mandatory caps on their emissions.

Since last August, 16 new carbon funds have appeared on the market, but eight were subsequently put on hold or closed down.

Most of the new funds listed this year are still in the fundraising stage and face an uphill struggle as they try to raise cash, the research found.

Given that the economic downturn has reduced industrial output, companies facing carbon cut targets have less need to buy credits to cover reduced carbon dioxide emissions.

Added to that, the future of the global carbon market after 2012 remains unclear and hopes are diminishing that U.N. climate talks in Copenhagen in December can provide much clarity.

Source : REUTERS