Green Market Opportunities View acknowledge that investing into Carbon Credits or VERs (Verified Emission Reductions) is fast becoming the new alternative asset for private investors, with some much good press in the public domain about the need to become Carbon Neutral and Clean & Green, it’s easy to misunderstand this complex market, equally it’s easy to be duped into a poor investment decision by clever scammers, known in the market as Boiler Rooms, especially if you don’t understand the market, this brief guide will serve as a starting point for any investor considering this lucrative market.
About us: Green Market Opportunities aims to help investors understand the market points, the process and more importantly what to avoid. This particular article is on how to avoid being scammed. It’s important to have a easy reference guide on what to watch out for, no matter who you buy or invest through, we recommend the following 8 points to be considered.
DUE DILLIGENCE
All approved VER projects are on the VCS registry http://www.v-c-s.org/ and Markit Registry http://www.markit.com/ this means you can and indeed should review the project documents prior to investing. If you are presented with a project ask, are the credits visible on a public registry? If not, then why not?
STANDARDS
What standard are they? For investment purposes Gold Standard (GS) and Verified Carbon Standard (VCS) are the best options in the voluntary market.
VERIFIED
We do not advise buying into projects that have not been fully verified and validated, future promise of credits to be awarded on a new project are too speculative and should be avoided. (In our opinion).
SPOT vs. FORWARDs
Are you forward buying? If so beware of pricing and delivery risk and importantly, when forward buying credits the company you purchase from should be FSA regulated to deal in forward purchasing deals as they become a derivative. At GMO we only deal in Spot Trades and never Forward deals.
PAYING FOR YOUR CREDITS
To whom are you making your payment? It should go DIRECT to the provider / seller of the credits and NOT a third party escrow company, agent or similar, we always recommend dealing with a UK based company and UK bank account.
GUARENTEED RETURNS
What, if any, returns have you been promised? Remember carbon credits are spot trades and there are no fixed of guaranteed returns.
EXIT STRATEGY
Ask about the exit strategy, how and when can your credits be sold? Are there any additional costs? What is the timescale to dispose of your credits.
REMEMBER
Investing into carbon credits is not a get rich quick scheme and it should be viewed as a medium to long-term investment, most importantly, if it sounds to good to be true… it usually is.
These 8 points should keep you in good stead, you can download more information and a free guide on How to profit from Carbon Credits via our (GMO) Green Market Opportunities main website at http://www.gmouk.com/
B Williams
GMO
