(Reuters) - Uncertainty over what will happen to the carbon market after the current round of the Kyoto Protocol ends in 2012 may lead some financiers to hold off on green projects in Southeast Asia, investors said on Wednesday.

Such investment is needed to shore up supply of carbon offsets for emissions trading schemes in Europe and other countries which have agreed carbon caps meant to slow climate change.

Singapore's third largest lender United Overseas Bank is adopting a wait-and-see attitude before investing in projects that aim to earn carbon credits under the UN-backed clean development mechanism (CDM), its executive director said at a green investment conference in Jakarta.

"We are keeping our options open. We don't need to rush in," said Mark Yeo Wee Tiong, adding that UOB had not yet backed any CDM projects.

Carbon offsets are meant to ease the cost of meeting such caps, by supplementing domestic carbon cuts with reductions paid for overseas.

But while Europe's trading scheme will continue beyond 2020, the international agreement that sets the framework for the world's carbon credit market, the Kyoto Protocol, runs out in 2012. Global climate talks in Copenhagen last year failed to produce a new deal.

Frederic Crampe, managing director of ReEx Capital Asia -- which arranges financing for green projects -- told Reuters there was huge potential for CDM projects in Southeast Asia.

"But we are so close to 2012 that we are in a very bad period," he said. "By the time you have built your project and got your approvals, 2012 is already here."

POLICY UNCERTAINTY

China and India have been the biggest source of carbon offsets. Now investors are eyeing projects such as mini-hydro power, waste water and geothermal in Indonesia, but policy uncertainty and a lack of incentives are holding back deals.

However, Moe Moe Oo, managing director for Swedish carbon credit trader Tricorona AB -- which sources financing for greenhouse gas reduction projects and trades the offsets -- said it was business-as-usual for his firm.

"But because there's no post-2012 agreement in place, those investors that might have invested a few years ago are not willing to take the risk," he said, adding the 2012 uncertainty added an extra risk to green investments in countries with unpredictable regulatory regimes, like Indonesia.

Globally, the number of CDM projects entering the pipeline rose by 130 in June, the highest monthly increase since October 2008, according to the United Nations Environment Program.

A recent poll showed that nearly 70 percent of clean energy project developers in India believed there would be a post-2012 successor to the Kyoto protocol and the World Bank has said carbon markets would outlast the Kyoto Protocol.

Rahul Kar, a director at KPMG Singapore, said he thought the carbon credit market was actually quite bullish, adding that some market players may be "spreading rumors to drive down the prices."

"But there is a strong signal of continuation in the market. The world doesn't stop at 2012."

* Malaysia CO2 project aims to preserve 100,000 ha of forest

* Deal with tribes aims to boost livelihoods, incomes

* But threat remains from illegal loggers

By David Fogarty, Climate Change Correspondent, Asia

SINGAPORE, Aug 6 (Reuters) - An Australian carbon services company has signed a deal with nine Malaysian tribal leaders to certify carbon offsets from a project aimed at preserving more than 100,000 hectares of tropical forest.

The deal allows the tribes in Sarawak state on the island of Borneo to earn a share of the proceeds from the sale of carbon offsets to help them manage and protect the forest over a period of 20 years, payments potentially worth millions of dollars.

Forests soak up large amounts of carbon dioxide, the main greenhouse gas blamed for global warming, and preserving the remaining tropical forests in developing countries is seen as a key part of the fight against climate change.

The project aims to improve the livelihoods of at least 10,000 people in 24 villages and is part of a U.N.-backed scheme called reduced emissions from deforestation and degradation.

The United Nations hopes REDD will lead to a multi-billion dollar trade in forest carbon credits and the Malaysian project is one of several pioneering investments aimed at building up the REDD sector.

REDD seeks to reward developing nations and indigenous forest owners with carbon credit payments to save their forests. There are about a dozen REDD projects in neighbouring Indonesia. The firm, Shift2Neutral, said it will work with the tribes and a local NGO to help manage the forest, survey the area and access the carbon stored in the trees and soil. The project would be certified under an enhanced form of REDD that also aims to reward any enhancement to a forest's carbon stock.

A long-term management plan would also be created and a committee of comprising tribal leaders, investors and local and company officials would guide how the money is spent with the aim of improving livelihoods and curbing incentives for logging.

"It's a 50-50 deal. We ensure they get their funding and they use that funding as per an economic development committee that is established," said Brett Goldsworthy, chairman of Shift2Neutral, adding the aim was to make sure the money wasn't squandered.

The tribes are the customary owners of the land and the legal owners of the carbon but many still have subsistence livelihoods.

"You've got tribal people who have barely got any money and they are desperate for money for things like medical aid," Goldsworthy said on Friday.

"What we will do with our funding is to start instigating other programmes along the lines of medical, food aid, schooling, clothing to make sure there is a sustainable future," he said.

PROTECTION

Besides boosting incomes, better monitoring of the forest was also crucial.

"The main threat they face is illegal loggers," he said.

"It is key to get more forestry people involved for the protection of the forest and having checks and measures on their boundary borders to ensure that people aren't getting through."

Goldsworthy said he hoped the carbon survey and management plan for the area would be finished by next year, followed by the issuance of the first batch of carbon offsets called VERs, or voluntary emissions reductions, to be sold to investors.

It was too early to provide an accurate estimate of the number of VERs per hectare from the Sarawak site, he said.

"As the land is first-growth vegetation one could expect 50 per hectare but again we have not provided anything at this point."

Avoided deforestation VERs fetch anything from $10 to $30 each depending on the project, country and risk.

He said the company is developing similar projects in the Philippines, Indonesia and South Africa with VER buyers being governments, large corporates and wealthy individuals.

(Reuters) - A carbon accounting technique aimed at saving tropical forests has passed a key hurdle, strengthening chances it could underpin development of a potential multi-billion dollar market for forest carbon offsets.

U.S. firm Terra Global Capital said the method had passed the first of two formal audits the benchmark Voluntary Carbon Standard (VCS) requires. When fully verified, it could be used in a U.N.-backed carbon-cutting scheme known as reduced emissions from deforestation and degradation (REDD).

Read the full article here

Visa has appealed to an increasingly environmentally concerned public by launching their first ever truly ‘green’ European credit card. The card promises to offset the carbon emissions generated by the products purchased with it.
Visa launches carbon offset credit card Each time a charge is made to the card, the carbon footprint left by that product or service is researched and then offset by the ClimaCount compensation program.”

The similar Visa GreenCard was launched in the Netherlands in 2004 but this is the first card by the company which is available to UK consumers.

The company has joined forces with the organisation RePay International which is in charge of the international ClimaCount compensation program. This program hopes to make the items bought by European cardholders carbon neutral by investing in the planting of trees and sustainable energy.

The ClimaCount scheme has the backing of the Dutch Applied Science Institute and is also backed by NGO Conservation International. According to Visa the program will be supported by other businesses and various EU governments and is a vital step toward how we think about improving the environment.

How it works
In the scheme, each time that a charge is made to a Visa card, the carbon footprint left by that product or service is researched and this amount of emission is then offset by the ClimaCount compensation program. The information on emissions is monitored via a website and the program invests in schemes such as forestry and alternative, more renewable sources of energy.

Speaking about the new card, Luc Janssen, head of Visa Commercial said: "This new partnership means that we can offer members a 'green' payment capability across Europe that addresses the increasing demand for sustainable initiatives.

"It is also easy for member banks to get involved as they won't need to invest heavily in special back office functionality, as ClimaCount has that already in place."

Greener all round
The CEO of Repay International said the scheme would have real benefits for the environment. He described the new card as "One of the next steps in broadening ClimaCount".

He went on to say that "RePay is fully committed and equipped to deliver our plug and play solution to Visa members all over Europe," which will mean that people can access real figures on their carbon footprint and by using the card automatically make some progress in repaying that emission-debt.

More and more credit card providers are starting to think ‘green’ with Barclaycard’s carbon-offset corporate charge card being launched last year and the Co-operative Bank also releasing a card which claimed to be greener by offering a lower rate of interest on purchases with certain ethical partners.

In the UK we’re slow on the take up, however! As long ago at 2006 Dutch company Rabobank launched a climate credit card which also gave funds to environmental projects. These funds were only accrued on purchases made on products and services which consumed energy during production, much like this new

Visa card and the Rabobank card was a success.
Experts predict the new Visa card will be equally popular.