insto - Australian financial markets

Fitch Ratings says in its report entitled "Australian Power & Utilities 2010 Credit Outlook: Carbon, Capex and Capital", that the credit outlook for the sector is broadly stable, though greenhouse gas reduction policy and the scale of investment required in both generation and network infrastructure could potentially damage the credit profile of some participants.

Some finance professionals are developing ways to fund the massive costs that will be incurred if the shift to a low carbon economy is to be achieved, writes Bernard Kellerman.

Climate bonds, which are essentially infrastructure bonds tailored specifically for financing climate solutions, can help fund the transition to a lowcarbon economy. This is the view of an increasingly large number of capital markets practitioners and academics.

While many companies are reluctant to admit their potential greenhouse gas costs, the number of institutional investors seeking this information has spiked, repots Bernard Kellerman.

The Carbon Disclosure Project has evolved as the pre-eminent mechanism for communication between companies and investors on climate change and carbon exposure issues. It has been run globally for 7 years, but for the fourth year has been expanded to cover the top 200 Australian and top 50 New Zealand companies.

With yet another summit on climate change looming in December, activists are turning up the heat on Corporate Australia, as Jane Lee reports.

Climate change may become as popular as asbestos or tobacco in Australian courts as individuals start to feel its effects, says the Environmental Defender’s Office.

Kirsty Ruddock, a principal lawyer of EDO, warns that climate litigation is evolving as people become more aware of climate change.

ASX100 companies ranked fifth globally for their disclosure on emissions and climate change strategy, according to the results of the Carbon Disclosure Project 2009 Australia and New Zealand. Seventy-three per cent of ASX100 and 96 per cent of ASX50 companies responded to this year’s CDP survey, compared to an overall global response rate of 55 per cent.

Following election of the National Party in November 2008, the New Zealand Climate Change Response (Emissions Trading) Amendment Bill was placed under review. An Emissions Trading Scheme Review Committee was established in December 2008. Four minority reports were released on 31 August 2009. These were in addition to the majority report, which clarifies the views of the committee on NZ’s response to climate change.

One interested observer is ArkX Carbon Fund’s Lisa Wade. She expects major fund inflow back into OECD economies once institutional investors understand the long-term upside within the renewable energy space. Wade says first signals of this can be seen in numerous local projects, notably Investec’s funding for wave technology hopeful, Carnegie Corporation (CNM).

The Australian Securities Exchange will list its thermal coal (FOB Newcastle) futures and options on 7 July, New Zealand electricity futures and options on 14 July and Victorian gas futures on 21 July 2009. ASX has received full regulatory clearance of the Operating Rules of Sydney Futures Exchange to support the contracts.

Until now, the impact of spam - those unwanted, unsolicited nuisance e-mails - has been measured in time, money, and aggravation. It turns out there is a massive environmental impact as well.