Zurich Financial Services Australia is set to provide political risk insurance (PRI) for carbon credit projects in emerging markets — part of a wider initiative to help combat climate change.
The policy will help protect investors in carbon credit projects against the risk of host governments attempting to deny benefits they are entitled too under the Kyoto Protocol — the international treaty created to help reduce greenhouse gas emissions associated with global warming.
Zurich Financial Services Group president of surety, credit and political risk Daniel Riordan said PRI should make carbon credit projects more attractive to investors concerned about political risk and market volatility.
Zurich Australia head of emerging markets David Anderson said he expects the carbon credit market, worth an estimated US$60 billion, to continue to boom.
“As financial incentives for carbon products become more common in the advent of emissions trading, we anticipate seeing more investments in emerging markets,” he said.
Zurich’s global group already offers PRI for carbon credit projects in other regions.
