invezz.com: California's Cap-and-Trade Can Boost Cleantech Investments

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California’s newly approved cap-and-trade system can open up new possibilities for investments in clean technology, giving a boost to the sluggish market, claims UK carbon credits portal (http://www.invezz.com/). Corporations and venture capitalists alike can take advantage of investing in research and development, cleantech installation and offset projects.

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DEZZ

The timing of California’s cap-and-trade system cannot be more perfect. As the demand for energy efficiency and GHG reductions rises next year, so will interest in carbon-reducing technologies.

California announced last week the official approval of its long-awaited cap-and-trade scheme, which will place greenhouse gas (GHG) emissions limits on over 600 companies in the utility and industrial sector. The new program, claims invezz.com, will draw investments into clean technology – a market, which has been on a downward trend lately.

The cap-and-trade scheme is one of 70 initiatives under the Global Warming Solutions Act of 2006. According to the environmental law, California has pledged to reduce its GHG emissions to their 1990 levels by the year 2020.

“The timing of California’s cap-and-trade system cannot be more perfect, says Tonka Dobreva of Dezz, the digital media company operating invezz.com. “As the demand for energy efficiency and GHG reductions rises next year, so will interest in carbon-reducing technologies. Venture capitalists will have to take notice.”

iNVEZZ.com cites a report by Ernst and Young, which estimates that in the second quarter of 2011, venture capital in clean technology companies in the U.S. has dropped by 44 per cent, reaching $1.1 billion. Solyndra’s bankruptcy last month, the website claims, is an indication of the downward direction of the market. The California-based company, which produces solar panels, had to close operations and cut over 1,000 jobs even after taking in $535 million in federal loans by the Department of Energy.

The new cap-and-trade scheme will allow the state’s biggest polluters to compensate for their emissions by either investing in clean in-house installations and processes, by paying for emission allowances, or by purchasing carbon credits from verified offset projects. iNVEZZ.com explains that the emerging market will draw increased attention to the development of green projects in California, giving as an example Bank of America’s recent deal with TerraPass Inc. Under the new deal, the financial corporation will purchase offsets from TerraPass and, thus, will strive to become a leader on young market.

iNVEZZ.com further suggests three primary strategies for companies and venture capitalists to enter the untapped carbon market in California. The first venue is investments in clean technology research and development, where companies put money into projects that seek to achieve innovation and efficiency. The second strategy is cleantech installations. As some compliance-bound corporations will seek to install technologies in-house to limit their GHG emissions, investors can take advantage of the demand for these services. And the third venue is investing in carbon offset projects, which produce carbon credits. As some of California’s polluting companies will be looking to offset their carbon footprint by purchasing and retiring carbon credits, directing capital into offset projects, which produce these verified emission reductions, can be a very profitable economic vehicle.

California’s carbon market is yet to develop and reach maturity, according to carbon-investments.co.uk. Therefore, investments in the area of clean technology have to be viewed as more of a medium- to long-term commitment. As the market expands, and potentially becomes integrated with other international markets, the business opportunities can only grow, opening along the way new doors for investment revenues.

To read the full article and to get more information about carbon credits, visit http://invezz.com/analysis/alternative-investments/what-are-carbon-credits-and-why-they-are-not-a-retail-investment-product

About Dezz ( dezz.com )
Dezz is a UK-based boutique digital media company providing original and reliable up-to-date information in the area of carbon credit trading and sustainable investments to large investment company decision makers, NGOs and to eco-minded individuals.

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John Adam
Dezz Limited
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