13 August 2006, The Independent on Sunday

Worlds apart, but the future is balanced between them

All of a sudden Governments and companies want to finance environmentally friendly initiatives in developing countries. Either business leaders have turned green campaigners, or we are seeing the rise of the next major global commodity - carbon.

James Cameron, Vice-Chairman and co-founder of the specialist merchant bank Climate Change Capital, estimates that about €5bn (£3.4bn) is currently being invested in carbon reduction programmes globally. He reckons about three-quarters of this comes from governments and the public sector, and a quarter from the private sector. "But in 10 years' time, carbon will be a major globally traded commodity like oil, " he argues.

Since the European Union emissions trading scheme was introduced last year, more and more companies have been investing in renewable projects overseas that can be offset against their own emissions. Mr Cameron says that many are taking this option because it is cheaper than cutting their own emissions. Climate Change Capital has over $100m of clients' money invested in these projects.

Mr Cameron rejects the criticism that carbon offsetting is cheating - cutting other people's emissions rather than your own. "It doesn't matter where you take out the emissions. A ton of carbon is a ton of carbon wherever it is."

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