GTP 0.00% 12.0¢ great southern limited

Forestry Stocks just keep growing

  1. 10,605 Posts.
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    Whilst Rene's offsiders are taking some profit on the recent GTP run I thought I might post an article from todays Financial Review that gives a hint to the big potential bluesky in the Plantation Management industry.

    Take some time to have a look through the prospectus of the major companies GTP, TIM etc and you will find formulae that have been put in place should carbon credit trading take off.

    Its easy to think that these planatation managers are merely some sort of boring funds managers but they have IMO incredibly safe (and now government legislated) income flows courtesy of tax breaks embedded in legislation, the have assets that continue to quite literally grow regardless of market conditions and most excitingly they are one of the few types of industries that produce a product that produces carbon credits that can be sold to carbon dioxide producing producers (whoi shortly may be forced to buy credits to balance their production of CO2)

    I cannot provide the numbers because no one has any idea just how big this could be....but its very real, so read the article.


    Carbon credit testing ground 30/08/02

    AFR News - 30.08.02 03:42

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    Julie Macken

    Rothschild Australia has launched a scheme aimed at introducing business to the sharp end of the global trade in carbon credits, despite the confusion surrounding the validity of carbon credits accumulated by Australian companies and states.

    Rothschild's Carbon Ring Consortium - the first of its kind - will provide Australian and Asian companies, particularly those with a future carbon liability, with "an innovative way of learning about and understanding their risks" in this emerging market, it says.

    The Kyoto Protocol is expected to come into force by early 2003, and analysts estimate the global market in carbon credits could be worth more than $US150billion ($271 billion) by 2012.

    But Rothschild assistant director of treasury Simon Games-Thomas believes Australian companies are not equipped to deal with the risks in the new market.

    "Irrespective of whether Australia ratifies the protocol or not, companies will have to prepare ... for operating in a carbon-constrained future," he said.

    "This will create both risks and opportunities which we need to learn about and manage. The CRC is aimed at providing participants with this knowledge."

    Operating as an unregistered, managed investment scheme, the CRC asks companies to invest $US100,000. More than 100 companies in Australia and Asia have expressed interest.

    During the scheme's life, which is expected to be less than 12 months, the CRC will buy a range of carbon credits, in various jurisdictions and from different sources.

    Carbon credits are a financial product created by the Kyoto Protocol. The protocol asks countries to limit or offset their carbon emissions, so carbon credits were created to measure this activity.

    By becoming a player, the consortium hopes to provide investors with exposure to the most pressing issues that businesses will have to address if they are to participate in the emerging market.

    These risks are becoming apparent to investors in the UK, EU and US. Three months ago, pension and investment funds with assets of more than $US4 trillion launched the Carbon Disclosure Project.

    The project has asked 500 major companies what they will do to manage their greenhouse gas emissions, with a view to advising them on the material risks the funds' investment portfolios will face.

    Martijn Wilder, a climate change specialist with Baker & McKenzie and consultant to the Carbon Disclosure Project, said whatever pace the Australian Government moved on Kyoto, "both the insurance and the investment community are already reassessing investments in view of the risks high carbon-polluting companies may pose. The Carbon Disclosure Project could not be greater evidence of this need to manage and be aware of these new risks."

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