As we get into structured carbon finance (carbon notes, carbon backed securities) really slicing and dicing the cash flows, there will be room for all kinds of shenanigans. The key difference is that whereas Mortgage Backed Securities had real estate (even if overvalued) backing them, CBS's will be built on the absence of an invisible gas. Is it any wonder that GS is interested?
From VentureBeat:
APX, a Silicon Valley company that certifies carbon and emissions offset certificates, and which is well-placed to support carbon-trading markets when they emerge, has gotten backing from Goldman Sachs in a $14 million investment, VentureBeat has learned.
Carbon trading is a growing business that could someday come to resemble the world’s largest financial markets.
Today’s emissions markets are generally small and fragmented. In regional U.S. energy markets, utilities are already required to buy electricity from alternative energy sources like geothermal, solar or wind. To prove their use of alternative energy, they’re required to file a certificate tracking their acquisition of the energy units. So this is the beginning of a “transfer” regime that could grow into more....MORE
