I take back every bad thing I've said about the CDM and JPM's derivative book. Well the derivatives anyway.
By distributing energy-efficient stoves in Africa, JPMorgan Chase aims to reduce greenhouse gases - and increase profits.
By any measure, it is a long way from the Park Avenue headquarters of JPMorgan Chase, the global investment bank that generated revenues of $100 billion last year, to the dusty streets of Kampala, Uganda, where a poor woman can buy a new cook stove for about $6.
What connects the big bank to that small transaction is the business of carbon trading.
JPMorgan (JPM, Fortune 500) is quietly pushing the boundaries of the carbon market - a sprawling international experiment to reduce the greenhouse gases that cause global warming - by subsidizing the distribution of efficient cooking stoves in poor countries. Because the new, improved stoves save fuel and produce less carbon dioxide than traditional stoves, they generate so-called carbon credits that can be sold to companies or individuals who want to offset their own emissions.
The business is complicated, controversial and potentially very profitable.
How profitable? If all goes according to plan, JPMorgan will expand its support for cook stoves from Uganda into Kenya, Ghana, Cambodia and beyond. Each stove is estimated to reduce carbon dioxide emissions by two to three tons a year; each ton generates a credit worth $10 or $15 a year, and potentially more, for the bank....MORE