Carbon markets call for private investment

Published: March 8, 2011

Investor says changes are needed to encourage private sector support.

The chief executive of a carbon markets investor has outlined plans to encourage more private sector investment in the industry.

Guido Schmidt-Traub of CDC Climat Asset Management said there is an “indisputable need” for private-sector financing for emission reduction plans and energy efficiency projects. “In all the energy efficiency projects that we are looking at, it’s a capex game,” he says. “It’s about mobilising capital at the outset.”

Speaking at the Carbon Insights conference in Amsterdam, Schmidt-Traub said his firm aims to buy portfolios and projects in the Clean Development Mechanism (CDM) project market. So far, however, it has met with limited success and is now considering new ways to support development in the industry. 

Schmidt-Traub’s ideas include playing a consultancy role in the development of new projects as well as establishing public-private partnerships. He also calls for the private sector to support the industry by insuring projects: “We’ll take some of the companies’ risk as investors into the future.”

He adds that for CDM projects to be attractive to private investors they have to be scalable and move beyond the current project-by-project assessment. They also have to be transparent and credible: “We would not be interested in doing anything that does not have environmental integrity and we must take this issue seriously if we are to turn this into a long-living market.”