Carbon offsetting allows countries and companies to fight climate change by paying for others to cut planet warming gases on their behalf, and is catching on among the public wanting to offset emissions voluntarily.
Investment banks including Citigroup
"We have a very healthy (offsets) pipeline both from the build-out of our own team and from ClimateCare, sufficient to match what we want to do in the next 12 to 18 months," said Bruce Tozer, global head of environmental markets.
JPMorgan declined to comment on the value of the deal or the amount of carbon offsets ClimateCare had developed.
Investment banks like carbon markets both to trade in these often volatile markets and to sell emissions permits and offsets to corporate clients facing voluntary or legally binding emissions targets.
BOOMING
Global carbon markets are booming, growing 80 percent to 40 billion euros ($62.94 billion) last year according to researchers Point Carbon, and that may continue because all remaining U.S. presidential candidates support a U.S. federal carbon trading market to match a European scheme.
But the European Union has said its demand for carbon offsets from developing countries, through a U.N.-run scheme under the Kyoto Protocol, depends on all countries agreeing a post-2012 successor to Kyoto in talks scheduled to end next year.
"(The EU) did increase uncertainty regarding post-2012 demand. It does potentially increase the risks on demand for CERs and ERUs," Tozer said, referring to U.N. jargon for offsets traded under the Kyoto scheme.
"The EU does strongly support purchases from less developed countries, and ClimateCare's presence in Africa plays into that," he added, referring to an EU proposal that new offset projects are only accepted from least developed countries after 2012.
ClimateCare has an office in Kenya and has been active in the unregulated voluntary carbon market worth about $400 million last year, and which has had its own critics because it operates outside rules under official government and U.N.-led schemes.
"We and ClimateCare have been actively involved in bringing greater transparency," said Tozer, referring to new voluntary carbon market standards.
JPMorgan said it had made the acquisition through its investment bank and that its environmental markets group would initially operate under the JPMorgan and ClimateCare brands.
In 2007, JPMorgan hired more than 50 new marketing, sales and trading professionals in commodities and would hire at least as many in 2008, the bank said. ClimateCare has 40 staff.
(Reporting by the New York Equities Desk and Gerard Wynn in London; editing by James Jukwey)
((gerard.wynn@reuters.com; +44 207 542 2302)) ($1=.6355 Euro)
Keywords: CARBON/JPMORGAN
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