A carbon credit insurance product developed by Parhelion Underwriting was underwritten by Kiln for a major international bank last week.
Carbon credits developed under the Kyoto Protocol, which are also known as Certified Emission Reductions, are financial assets that can be generated by companies when they remove harmful carbon dioxide emissions or greenhouse gases from the environment through adopting ‘greener' practices.
... Banks can purchase ‘options' to buy carbon credits at a fixed, pre-determined price for ‘green' projects (such as renewable energy or emission reduction activities) that have been approved by the Clean Development Mechanism Executive Board, under the Kyoto Protocol.
These credits can then be traded at a later date, when the current market price is higher than the option price, generating a profit for the bank.
However, as demonstrated by the recent change in regulation by the EU regarding the eligibility of CERs from HFC23 and adipic acid projects, there is a significant risk that credits may become ineligible as a result of decisions made by the EU, which can have a substantial impact on their value.
Labels: Carbon Cult
Polistra was named after the original townsite of Manhattan (the one in Kansas). When I was growing up in Manhattan, I spent a lot of time exploring by foot, bike, and car. I discovered the ruins of an old mill along Wildcat Creek, and decided (inaccurately) that it was the remains of the original site of Polistra. Accurate or not, I've always liked the name, with its echoes of Poland (an under-appreciated friend of freedom) and stars. ==== The title icon is explained here. ==== Switchover: This 2007 entry marks a sharp change in worldview from neocon to pure populist. ===== The long illustrated story of Polistra's Dream is a time-travel fable, attempting to answer the dangerous revision of New Deal history propagated by Amity Shlaes. The Dream has 8 episodes, linked in a chain from the first. This entry explains the Shlaes connection.