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Johannesburg - The carbon credit market, according to asset manager Sterling Waterford Securities, is the world's fastest growing financial market, and from yesterday South Africans - both individuals and institution - have been able to invest in a carbon credit note on the JSE.
Sterling Waterford yesterday listed the note which expires in December 2012.
Sterling Waterford director Greg Paterson-Jones said the previous note - which had been listed in 2005 and had expired in the middle of this year - had delivered initial investors a near-250% yield.
Paterson-Jones says the carbon credit market has not been affected by the worldwide economic downturn or the subprime crisis because it was not related to stocks and shares.
He says that all indications are that the second note will also perform well. Expectations are that, by 2020, the carbon credit market will be worth more than $20bn.
The new carbon credit note can be traded on the JSE like a share. It is a possible rand hedge, says Paterson-Jones. Retail investors, companies and trusts can invest in it in rand without needing to use their offshore investment allowance.
The note is underpinned by a portfolio of projects that are owned and managed by the French bank BNP Paribas.
The carbon credit market began, in 1997, as part of the Kyoto Protocol, which promotes the reduction of greenhouse gas emissions.
Countries in developed countries that are not able to reach their greenhouse gas-emission reduction targets, can buy carbon credits from projects in developing countries that have earned credits through the reduction of greenhouse gases.
- Fin24.com