Carbon funds - Here come the funds

While government-run procurement funds were the first to establish themselves in the carbon market, more and more private sector funds are now bringing investment capital into the sector. Oliver Holtaway reports

A real mobilisation of private capital in the carbon sector will be seen throughout 2006. Funds that trade carbon credits to make money - rather than to meet compliance targets - could bring up to EUR2 billion of capital into the carbon market, say market participants. With more and more carbon-related companies floating on stock exchanges such as AIM, a whole new investor base is being tapped.

The earliest days of the carbon market were dominated by government-led procurement funds, such as the