Financial Giants Fund Site to Track ‘Ecosystem Marketplace’

GreenBiz.com, 1 April 2005 – The world’s first online information platform for the growing international trade in ecosystem services has been launched with the backing of financial institutions ABN AMRO and Citigroup.

The Ecosystem Marketplace, developed by the non-profit conservation group Forest Trends, will provide much-needed transparency for emerging ecosystem markets, including the burgeoning carbon market.

The Web site was launched at an ecosystems marketplace conference in London, addressed by Sir Win Bischoff, chairman of Citigroup Europe and Herman Mulder, senior executive vice president and co-head of Group Risk Management at ABN AMRO.

Carbon market transactions have doubled in volume every year from 2001 to 2003, from nearly 13 million tons to more than 70 million tons of CO2 equivalent. Since January this year, the first month of the newly launched European Union Emissions Trading Scheme (EU ETS), 25 million EU allowances have already been traded with an average price of EUR 10 per ton.

ABN AMRO estimates that the total value of the carbon market in Europe alone will be EUR 45 billion by 2012. That includes both market turnover in the EU ETS and the Kyoto Protocol “flexible mechanisms.” ABN AMRO plans to launch new environmental financial products related to the EU ETS and the climate markets related to the Kyoto Protocol.

Richard Burrett, managing director of Sustainable Development at ABN AMRO, said:

“The rapid growth we’ve seen in carbon markets shows that markets for ecosystem services are viable and have great potential, given the right regulatory environment. In the near future we expect new legislation — both national and global — which will create efficient markets for ecosystem services; our support of the Ecosystem Marketplace demonstrates our commitment to being at the forefront of these exciting developments.”

Other ecosystem markets have the potential to expand rapidly in the next decade, including biodiversity, water, and other conservation markets. In the U.S., wetlands mitigation banking has more than quadrupled in the last decade, with nearly 400 established mitigation banks in 40 states today. Although there are no reliable numbers on the size of the U.S. wetland mitigation market, industry insiders estimate that the market is worth $1 billion per year and is poised for rapid growth.

Ecosystem markets, which have emerged over the last decade, recognize the necessary “services” ecosystems provide — clean air, clean water, climate control, rich soil etc. — and attach an economic value to them.

Today, the world has lost almost 3 billion hectares, nearly half, of the forests that once covered the earth. There are 150 permanent or recurring coastal dead zones in seas worldwide. And at current rates of habitat loss, as many as 10% of the world’s species could be lost over the next 25 years.

Pamela P. Flaherty, senior vice president of Global Community Relations at Citigroup, said: “We have no doubt that ecosystem services markets will play an important role in addressing global environmental concerns and will provide significant financial opportunities in the coming decade — for large and small businesses globally and for low-income entrepreneurs. Our support of the Ecosystem Marketplace is in line with our commitment to sustainable development and our long-standing support of micro-enterprises throughout developing countries.”

Further demonstrating the growing importance of ecosystems marketplaces to major financial services institutions, Sir John Bond, chairman of HSBC, will address the significance of these new markets for the environment in a speech at the launch event in London.

“Financial-community backing is critical to the success of ecosystem markets and we applaud the leadership shown today by ABN AMRO, Citigroup and HSBC,” said Michael Jenkins, president of Forest Trends. “The Ecosystem Marketplace will provide much-needed information and transparency that the finance and business community needs in order to understand and take full advantage of ecosystem market opportunities.”

The Ecosystem Marketplace contains comprehensive news, regulatory information, market analysis and price tracking online. The Ecosystem Marketplace harvests the knowledge and ingenuity of over 150 worldwide business and environmental experts that comprise the Katoomba Group.

Author GreenBiz.com
Publication Date 01.04.2005
Document Type News articles
Issue/Topic Ecosystems
Energy & Climate
Financial Sector
Company ABN AMRO Bank N.V.

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