Isramart : Point Carbon and S&P to offer credit ratings for carbon trading

Isramart news:
Carbon market analysis group Point Carbon and ratings agency Standard & Poors are looking at setting up a joint venture to investigate carbon offset project risk assessment products and services.

By signing a memorandum of understanding (MOU) the two parties hope to give more transparency to markets and improve investor confidence by providing in-depth analysis of each project and trade.

"Demand for independent evaluation of the risk of carbon offset projects is growing rapidly around the world," says Vickie Tillman, senior vice-president of sustainability business development at McGraw-Hill, S&P's parent company.

The move is likely to be welcomed by participants of the carbon market, where counterparty credit is a huge issue.

"Credit ratings can make a huge difference to the carbon trading market," says Jim Benson, an emissions and power trader at BP. "The emergence of the dominant exchange-traded carbon market reflects how, with transparency, newcomers can access the entire market with ease. We have and will continue to see more liquidity and less volatility, which is worlds apart from three years ago."