“Carbon will be the world’s biggest commodity market, and it could become the world’s biggest market over all” – Barclays Capital
The above quote pretty much sums up why I think that carbon offset investing is the hottest thing to look at in the field of investments, green or otherwise. We believe that this commodity will always be valuable and will always keep rising in value because of several important factors. What are these factors?
First, this is a brand new market. You’ve heard of getting in on the ground floor. Well, this industry is very close to that. Expectations for this market are high, and estimates of the potential size of a U.S. cap and trade market (the term used in the U.S. to refer to carbon credits) alone range from $300 billion to $2 trillion in the near future. And it will not stop there. Carbon trading is expected to dwarf the global foreign exchange market soon and forex already dwarfs the global stock market. We’re talking big. And just as importantly this will be a growth market for years to come.
Second, many investment banks such as JP Morgan Chase, Morgan Stanley, Barclays and Goldman Sachs have all entered the market place. Nearly every investment bank has set up an environmental markets division and there are now a host of funds that are dedicated to the sector. You know when the big boys get interested that there has to be a lot of money involved.
And what advantage do carbon credits themselves possess? Unlike other green investments, carbon offsets don’t depend on any particular technology or company to be successful. Carbon offsets themselves are going to increase in value and are already tradable the same as any other commodity or security – stocks, bonds, etc. Why invest in a particular technology or company that may prove to be unsuccessful when you can invest in a commodity that will always have value – carbon offsets.
The hardest thing that you’ll encounter when you attempt to get involved in green investing of any kind, and this goes for carbon offsets too, is the sheer number of projects that are available, the different types of technologies that are being developed and the unsubstantiated claims that many companies are making about their products. It’s not easy to sift through and find the right projects for investment.
So what should you do? We suggest you do some basic research about carbon credit investing. You’ll get plenty of information if you Google “carbon registry websites.” These are sites that are generally run by organizations that monitor the market and provide carbon offset investors with a lace to store the records of their various purchases. These sites also contain lots of basic information about carbon offsets and are an excellent place to start gathering facts.
I hope that this article has helped you to clarify some of the issues involving carbon offset investing and that this will help you to become a successful green investor for your own financial good and the good of the entire planet.