Is all the fuss about EcoSecurities, a carbon trader and carbon offset developer, a sign of confidence that more countries will introduce cap-and-trade schemes?
Bids from an EDF subsidiary was rejected in June and Swedish company Tricorona dropped out of the running in September. Another offer from Guanabara, a vehicle set up by EcoSecurities’ co-founder Pedro Moura Costa, at 90p a share gained support from shareholders with 25.5 per cent of shares, JP Morgan yesterday announced its 100p bid would be recommended by the company’s directors.
The investment bank already owns Climate Care, which deals mainly in voluntary offsets, although they say their projects are carried out to the same standards required by the UN’s carbon development mechanism, under the Kyoto protocol. EcoSecurities, by contrast, invests in projects that are officially accredited under the Kyoto protocol, which are sold into carbon trading markets.
The US is considering legislation that could see it allow 1bn tonnes worth of international carbon offsets to be used each year. But there are two big potential sticking points: the Waxman-Markey bill, as it’s called, may not even get through the Senate. Then, that UN accreditation process will certainly be up for discussion in Copenhagen in December, and it’s not certain that whatever standards are agreed there will be adopted by the US anyway.
As the FT notes, most analysts think the company is worth more than any of those bids, with one suggesting in June it could be valued at 121p a share, based on its cash position and existing carbon portfolio. But the market seems far from getting excited about the outlook for the future of carbon trading just yet.